Subaru’s Plans for US Growth in 2013 and Beyond

Posted by Stephen On Friday, February 22nd, 2013

For the past five years, Subaru has maintained itself as a classic example of The Little Engine That Could. “I think I can, I think I can, I think I can” perfectly sums up Subaru’s mindset, but it’s not necessarily a bad mindset to have. As one of the smaller Japanese auto makers, Subaru sold just 50K more units in the US during 2012 (336K units) than Toyota sold Corollas. Unlike Toyota, however, Subaru has managed to maintain consistent growth for 5 consecutive years, even through the recession. Not many auto makers – Japanese or otherwise – can make that claim.

For 2013, Subaru is looking to continue pushing its US sales up 8% to 365K. But, now that the recession is receding and other automakers are getting back in the game, how will Subaru continue their growth?

Ward’s Auto had the same question, and they were kind enough to publish an interview with Ken Lin, Subaru’s US Director of Product Management. Apparently, Subaru still has several untapped resources, along with some new offerings, to continue their growth through 2013 and beyond.

First and foremost, Subaru knows that the Forester is a crucial part of their line-up. You don’t have to be a math-whiz to see that with 76K out of 336K units sold during 2012 being Foresters, it’s an important vehicle to get right. The new Forester should continue to be competitive, though, thanks to a completely revamped design for both the interior and the exterior, along with a new 250hp turbocharged engine option for performance oriented buyers. Mr. Lin even believes that surpassing their 2013 goal is possible “if the market is strong and the Forester launches strong”.

As for the rest of their lineup, that’s where things get a little more muddled.

The Subaru BRZ, which was jointly developed with Toyota, seems like the car with the most potential. Even though some sources claim that only one BRZ is manufactured for every nine Scion FR-S (Toyota 86) units, the BRZ is selling at a ratio of about 1:2.5 (Subaru’s sold 4,144 while Toyota/Scion sold 11,417). This is a testament to how well Subaru’s version has been received. Ken Lin comments that “the plan was for Toyota to outsell us… This wasn’t a car that we desperately needed. But it was a great engineering exercise”.

Lin also says that although there are no current plans for further joint-projects with Toyota, it’s not totally out of the picture.

As for the rest of Subaru’s lineup, Lin acknowledges that there are a couple holes that need to be filled. For example, the Tribeca is performing poorly. Sales have continued to dwindle, and the car may get the ax before too long. Lin speculates that the Forester is cannibalizing sales from the Tribeca. The solution, he says, may be to completely overhaul the vehicle and bring it back bigger and more luxurious in order to appeal to a completely different class of buyers.

Subaru also doesn’t have a single entry-level vehicle in their lineup. There’s nothing cheap and appealing to younger buyers. But Lin isn’t so sure that’s where they want to be. “We see a lot of brands that go down-market to the entry buyer, but we’re smaller and have to be very strategic on where we focus our resources. (Entry-level) cars themselves don’t cost that much less to build, but you have to charge thousands less to be competitive so it doesn’t make a lot of sense for us at this point.”

Good thinking, Lin – He makes a sound argument.

All in all, I expect we will see Subaru hitting their sales goals in 2013. They’re definitely not the most popular Japanese car maker, but they know what they’re doing and they know where they need to go. Self-awareness is a powerful tool to have, and it sounds like Subaru has it in spades. I’ll definitely be most excited to see what Subaru does with the BRZ, but the new Forester looks pretty good too.

What do you think? Is Subaru moving in the right direction? Is their marketing strategy sound? Let us know in the comments below:

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