What Does Subaru Know That Others Don't?

Mr_Shiftright · February 2009

Can anyone make any sense out of this?

(AP) (excerpt)

"DETROIT  General Motors' U.S. vehicle sales plunged 49 percent in January while Ford's sales dropped 40 percent, starting 2009 at an abysmal pace for the auto whole industry as lower sales to fleet buyers like rental car companies weighed down the U.S. automakers' results.

Japanese rival Toyota's sales dropped 32 percent for the month, and Honda's sales fell 28 percent. Subaru bucked the trend of declines for a second month in a row, posting an 8 percent sales increase..."

dtownfb · February 2009

Considering that Subaru's sales goal is somewhere around 200k units, that 8% increase is not all that great. They do have an impressive lineup of cars with the worst being the Legacy sedan, which is a pretty good car. I think it's a small company that is marketing itself properly.

The key question is, how much money are they making?

Mr_Shiftright · February 2009

Well that's a good point you made, so I did check on current "incentives and rebates" on the Edmunds site and Subaru isn't running any right rebates or deals right now. So apparently they aren't giving the cars away, no.

And true they are a small player....but still, how are they staying SO FAR above the others?

anythngbutgm · February 2009

As an owner of not one, but 2 Subarus I can confidently say that they are some fine vehicles for the money. And especially up here in NewEngland where the last 2 winters have been brutal, I think there are a lot of people who are buying them based on their all-weather capability. They're a safe choice as far as quality and reliability go too and the safety on them is excellent. I'd buy another one in a heartbeat. :shades:

nippononly · February 2009

Fuji Heavy of Japan, is running a deficit though. Despite the great sales in the U.S., what with exchange rate problems and all they expect to post a loss for the year, I believe.

And as noted, a single month 8% increase when monthly sales are less than 17K nationwide is not all that many actual vehicles.

But they had the right product for the right time last year with the updated Forester. Its sales were through the roof for the first half of the year, and it's still very popular.

After only one year they totally updated the WRX to address every WRX fan's complaints about the redesigned '08, and they began selling the redesigned-again WRX as an '09 last fall. I bet WRX sales are way up as a result, and it is possible that most of their single-month increase in sales is from that model. There were a lot of forlorn '08 WRXs still sitting around long after the '09s were being sold, so I know the '08 didn't sell well.

Mr_Shiftright · February 2009

I wonder how we can check that interesting hypothesis---that the 09 Forester and 09 WRX models are driving sales up rather than the regular Impreza, Legacy and Outback.

In other words is it overall reputation or just lucky product placement that is helping Subaru right now?

nippononly · February 2009

I also think it is probably likely, although I don't know how I would confirm it, that downsizing out of large SUVs continues out there despite the currently low gas prices. And folks coming out of SUVs might be attracted to the AWD-only, "rugged" message of Subaru, which along with the mostly 4-cylinder engines saves them some gas money while providing them something similar to the type of vehicle they are accustomed to.

Doubtless crossovers of all makes are benefitting from those customers, but again Subaru doesn't need much of a sales bump to post a moderately large increase as a percentage.

As for 09 Forester and WRX, I know that the only model that was up for calendar 2008 was the Forester, up a whopping 28% IIRC. And the 09 WRX was bound to be more popular than the soft, low-powered, less-thrilling '08. Also, I notice that for the first time I can recall, Subaru is (or was in January at least) running a promo lease on a WRX. Usually it's just the base models that get the promo leases.

ateixeira · February 2009

* Subaru owners are loyal (Forester has won that Polk award numerous times)
* Subaru owners can afford more expensive cars so they're more recession-proof (not at their financial limits)
* People are downsizing from big SUVs but still want AWD
* The new Forester is just a hit, and it only came out in March 2008

The amazing part is that the new Forester has been a hit even without incentives. A year ago they had up to $2000 cash back IIRC.

Also, their long-term cash cow, the Outback, is very old, in its last model year.

Not bad, but they still need a nice update for the Outback to show growth. Forester has traditionally been their #2. They need for the 2010 Outback to be a hit as well.

dtownfb · February 2009

Below is an article from today's Philadelphia Business Journal detailing the individual model sales (based on percentages):

In sharp contrast to the industrywide trend, Subaru of America said Tuesday its vehicle sales rose by 8 percent last month over January 2008.

The car maker, whose U.S. headquarters is in Cherry Hill, N.J., was bolstered by sales of its redesigned Forester, a five-passenger SUV. Forester sales totaled 5,162 vehicles, more than double January 2008s tally of 2,402. That compensated for declines throughout the rest of Subarus product lines.

Sales of a larger SUV, the seven-passenger Tribeca, fell by 54 percent, from 910 to 415 vehicles. Sales were also down for the Outback station wagon, down 27 percent; the Legacy sedan, down 20 percent; and the compact Impreza line, down 5 percent.

Overall, Subaru sold 12,194 vehicles in January, compared to 11,289 in the same month last year. The major automakers on Tuesday were reporting steep decreases in January sales, with Ford's sales falling 40 percent drop and Toyota's by 34 percent.

Subaru of America is a wholly owned subsidiary of Fuji Heavy Industries Ltd. of Japan.

ateixeira · February 2009

Wow, Impreza was actually down, though I bet the WRX model was up.

Forester more than double, wow. I think that's the biggest increase since it came out.

dtownfb · February 2009

I finally saw a new Forester up close at the auto show. I think Subaru finally has it at the right size. Plus there is much more room in the back seat than the original.

nippononly · February 2009

Tribeca is way under 10K per year now. Why do they continue to plug away at selling that model? It has become the next Baja. What was its peak sales year, and how many did they sell? I can't recall it EVER having a really good year.

The new Legacy and (more importantly) Outback come out late summer this year, right?

I will bet alongside you: WRX was significantly UP, to compensate for low-end Impreza sales falling. WRX sales are traditionally more than half of all Impreza sales, aren't they (2008 excepted)?

ateixeira · February 2009

I agree, that's why we own a 2009 ourselves. I had a 1998 prior and the improvements you mention stand out.

The Forester is shorter in length than a Cobalt but offers as much room as an Equinox. Great packaging.

ateixeira · February 2009

Well, Tribeca was the key to their whole upscale march, which simply didn't work.

Subaru was a car for affluent people who didn't want to show off, and suddenly they launch a car that is flashy and upscale. It clashed with their whole philosophy.

Plus - the market went big and the Tribeca is too small for that class. Successful competitors are at least a bit bigger.

They need to stretch the wheelbase another 4-5", at least, and offer a real 3rd row to make it stand apart from the Outback. Otherwise don't even bother with a 2nd generation.

Mr_Shiftright · February 2009

that's very interesting. Aside from the Forester, which is obviously a hit, then as the Subaru cars gets smaller, the sales decline also gets smaller in relation to the car's size.

ateixeira · February 2009

Unlike Honda and Toyota, Subaru has (until now) built cars small enough to avoid tax penalties in other markets. In other words, they've had a one-size fits all, global car stategy.

The US Accord is bigger than the Accord the rest of the world gets.

That may change, the 2010 Legacy should be bigger than the current model, though I'm not sure if they will produce a smaller one for Japan.

One weird consideration is that Subaru traditionally has sold more cars in Japan than in the USA. The US is their 2nd biggest market.

Until they commit and make bigger cars for American tastest, at least.

Mr_Shiftright · February 2009

Hyundai sales are also up but they are literally giving the cars away under their new buy-back/return policy within 12 months, if you lose your job. So that sales increase is pretty skewed.

ateixeira · February 2009

Yeah, and I'm seeing ads for new Genesis models for $27k already.

I thought they would try to avoid that.

They spent millions during the Super Bowl, so they won't make a profit selling them at that price.

Mr_Shiftright · February 2009

I didn't drive one but I drove in one (Genesis I mean) and I was pretty UN-impressed. It's a car standing strictly on price. Driver thought it was rather gutless for the rated HP as well. Worth the money? Probably. Is it a Lexus or BMW? No, no, no.

Haven't driven the 2009 Forester but I'm anxious to try it out.

ateixeira · February 2009

It handles well for a class that isn't particularly known for handling well. Try the XT.

Mr_Shiftright · February 2009

I think it needs work from the ground up.

I don't think "value for the money" is going to cut it in this atrocious car market. There has to be emotional appeal in there, especially on a car with ZERO heritage.

Subaru has rally heritage, street creds and people do seem to love them.

Interestingly, Hyundai didn't even put their badge on the front of the car!!!

Now that's pride.

rsholland · February 2009

I think Subaru finally got the Forester recipe pretty much nailed this time around. It's sized right. It looks good. It's contented right. It's priced right.

It's not perfect, however. It's still got an "old" 4-speed automatic, the gas mileage is so-so, there's no manual option for the turbo model, and the turbo requires premium gas. I suspect some of these issues will be addressed in the next few years. I know a CVT is coming, probably for MY 2012, which would be when the mid-life refresh will likely occur. I also expect a US-spec boxer diesel by then, if not sooner.

The "tweaked" '09 WRX (which I have) certainly didn't hurt either.

I saw the Legacy concept yesterday at the Philly auto show, and it looks good in the flesh. I think this too will be a successif the economy doesn't further implode. It's a bigger (taller, wider, longer = much roomier!) car than the outgoing model, so it should better compete with those buyers who are cross-shopping Accords, Altmas, etc.

Bob

rsholland · February 2009

Shifty, as you probably know; once a Subie owner, always a Subie owner (well, almost always...). Subaru has very high owner retention. I've heard more than one Subie sales person say that current Subie owners are a very easy sell, as they usually love their cars.

Bob

fezo · February 2009

True. Most Subaru owners I know are on at least their third one.

Don't suppose there is a chance to bring back the Legacy wagon? THAT is a car I'd lie. Tried one back in 99 and would have bought it but it was just a touch too small.

Mr_Shiftright · February 2009

Subarus were never particularly strong on MPG. I feel very fortunate to average 26--most people don't.

You know I don't think I've ever seen a boxer diesel. Can you think of one in a mainstream production car....like EVER?

Surely the French did this once.... :P

morin2 · February 2009

The subaru boxer diesel is available in Europe. Nothing definitive for US availability.

My wife gets 26 mpg in her 07 Forester & I average 30 driving it. Have done as well as 31.5 on the hwy - but I coast, accelerate slowly, keep it about 59 and rarely use brakes...

Mr_Shiftright · February 2009

Ah... I don't do any of those things :P

rsholland · February 2009

Here you go Shifty.

Impreza boxer diesel sold in Europe. It comes with a 6-speed manual; same with the diesel Forester. The diesel Legacy and Outback get 5-speed manuals. It's not yet offered with an automatic, as Subaru doesn't have one strong enough to handle the torque, which is more than found on the 3.6L H-6 Tribeca.

http://www.subaru-global.com/special/impreza_20d/index.html

http://www.subaru-global.com/special/forester_20d/index.html

http://www.subaru-global.com/special/boxerdiesel_lgc_obk/index.html

Rumor has it we may get the diesel here in a couple of years. Here are a couple of road tests:

http://www.edmunds.com/apps/vdpcontainers/do/vdp/articleId=124553/pageNumber=1

http://www.edmunds.com/insideline/do/Drives/FirstDrives/articleId=131970

Bob

Mr_Shiftright · February 2009

Very interesting. The boxer diesel seems a bit pokey for American tastes but it's about the same as a Prius, so livable. And 60 mpg! Is that for real? Gee, that's 20 miles less per gallon than the 80 mpg I get on my Hummer after ordering my HHO kit from eBay and drilling holes into those mayonnaise jars. :P

anythngbutgm · February 2009

I'm currently getting about 27-28mpg in my Impreza and the wife is getting about 23-24 in the Outback. When the weather warms up, mine usually jumps to 30-31. The wifes car just turned 10k miles so I'm not sure what we'll see out it this spring.

rsholland · February 2009

I suspect 60 mpg is "Imperial" gallons; even so, that's pretty impressive.

There are even rumors that a high-output WRX diesel may be in the works!

Bob

rsholland · February 2009

I'm getting ~ 21 - 22 mpg with my '09 WRX, which is mostly a mix of country and highway driving. I just recently took a trip up to the Philly car show and behaved myself on the highway (keeping speeds close to the speed limit), and got a tad over 27 mpg.

Still, this car gets about .5 mpg - 1 mpg less than my '06 WRX driving under similar conditions.

Bob

anythngbutgm · February 2009

But it's the new one right? So it probably still needs to be broken in.

I still need to drive a WRX sometime...

rsholland · February 2009

I've 3,700 miles on it. I expect the gas mileage to improve a little once the weather warms up.

Coming back from Philly on Monday, I let it rip through the gears after stopping for a toll on I-95. It really scoots right on up to redline.

Bob

ateixeira · February 2009

Surely the French did this once....

Hyundai actually had a good January for sales. But...they are also offering steep discounts, so I dunno about profits.

For Subaru, though, I agree with Bob - for the most part they nailed the Forester update. Despite the 4EAT sales doubled vs. Jan 08, and they had $2000 cash back then and zero cash back now.

We got snow yesterday so I parked the Miata and drove my wife's Forester (our 3rd Subaru). It's a very user-friendly vehicle, easy to drive, no blind spots, perfect seat height. I drop down in to my Miata, climb up in to my Sienna, but you just slide right in to a Forester.

Note to self: get heated seats on my next Miata. :shades:

nippononly · February 2009

So the Miata will have an encore as well? Those must be such fun cars, I only wish I could fit in it better....

Mr_Shiftright · February 2009

One reason I bought the Subaru is that I could fit in it. As Americans grow larger and larger, Japanese cars had better follow suit.

ateixeira · February 2009

I have to squeeze in to the Miata. I'd say I'm right at the limit. More than an hour behind the wheel and I start to feel fatigue.

The new one is a little roomier so that's one reason for the upgrade.

To be honest I've been shopping casually for a newer one since 1999 or so. LOL

Maybe this decade, maybe next...

rsholland · February 2009

What year/model Subie do you have Shify? How do you like it?

Bob

Mr_Shiftright · February 2009

I have a '97 but I went through it stem to stern just last year...new radiator, catalytic, brakes, head gaskets, water pump, power steering pump, repaired the AC, new dash light bulbs, fixed the cruise control, new headlight and foglight bulbs, new clutch, re-sealed the engine top to bottom, new belts and hoses, new battery, wiper blades, rear tires.

That was 15,000 miles ago (I drive a lot) and nary a burp out of it. Totally reliable.

I'm in the car total about $5,000 bucks at this point. It now has 142K on it.

I bet I could sell it for that, too.

ateixeira · February 2009

If you kept receipts, yes.

rsholland · February 2009

'97 Outback? Legacy? Impreza? Wagon? Sedan?

Bob

Mr_Shiftright · February 2009

Outback 5 speed wagon, green/gray. A little bit of California battle damage, but still looks good. It gets very good care.

rsholland · February 2009

Which leads to the next question: What other vehicles reside in Shifty's garage? Is the Outback your daily driver, so to speak?

Bob

Mr_Shiftright · February 2009

Yeah I picked the Subaru for versatility, AWD in bad weather and reliability. Presently the garage is pretty empty. I have a Norton Commando and a pretty nice Porsche 914 project going on, in storage (body is done, motor is built, but no interior, etc). I'd like to add maybe a BMW Z3. (ugly as sin but prices are getting down there for the 6 cylinder cars). I can't fit in a Miata without use of a welding torch.

oregonboy · February 2009

I'd like to add maybe a BMW Z3. (ugly as sin but prices are getting down there for the 6 cylinder cars). I can't fit in a Miata without use of a welding torch.

So can you fit into a Honda S2000?

C&D Comparison Test

Mr_Shiftright · February 2009

Don't think so, and really Subaru doesn't make a sports car (by my definition) and I'm not going to drive something with a huge wing on it, so forget that.

Actually not trying to please everyone might be part of Subaru's current survival.

nippononly · February 2009

Yeah, it can be good to be niche, as long as the buyers in your niche weather economic downturns better than the average Joe Schmoe out there. In Subaru's case, I think they do, and that has been key.

stever · February 2009

Are all HUMMER buyers broke then? That niche fell through the floorboards. Subarus aren't known for being mpg kings, so fuel economy can't be the story either. Owners are pretty loyal and they aren't shy about bragging on their rides.

Mr_Shiftright · February 2009

The problem is that most people bought a HUMMER for the wrong reason. A HUMMER is in fact a fantastic off-road monster if you happen to be logging in Oregon or wolf-hunting with Sarah Palin. But if you live in a condo in Miami Beach, the vehicle is utterly ridiculous given the cost to buy, drive and maintain it.

But people buy Subarus as efficient AWD utility wagons/sedans and don't suddenly find themselves caught in some absurd lifestyle statement. You aren't going to impreza anyone in a Subaru :P

stever · February 2009

You're such a brat about cars Shifty. :shades:

Subaru owners do enjoy a good pun eh?

What Does Subaru Know That Others Don't?

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