Subaru's unexciting road to success

So what is it about Subaru?

Their cars don’t get eye-popping fuel economy. They’re an also-ran in California, the nation’s biggest car market. They don’t sell hybrids, super-hot sports cars or other attention-grabbing metal. And good luck wringing a rebate out of the dealer.

"It’s not an exciting brand," said Todd Turner, president of Car Concepts, a Thousand Oaks consulting firm. Subaru owners "get a reliable, albeit not very flashy, mode of transportation. The people who drive Subarus don’t really care what you think about what they drive."

All of which makes it surprising that Subaru managed to achieve sales growth in 2008 in a U.S. new-car market that was, literally, a car wreck. It wasn’t much of a gain — just 0.3% compared with 2007. But it was a stellar performance when compared to the double-digit declines racked up by almost every other automaker. (Rolls Royce and Mini were the only other marques that saw an increase in U.S. sales last year, with gains of 28% and 27%, respectively.)

And Subaru did it while offering the lowest incentives of any major car maker — an average of $889 per vehicle versus an industry average of $2,566, according to Edmunds.com.

Subaru, a product of Tokyo-based Fuji Heavy Industries, did it by focusing on a small lineup that includes the Impreza and Legacy sedans, the Forester and Tribeca SUVs and the Outback, which is sort of a station wagon with a bit of SUV thrown in. All feature all-wheel-drive.

The vehicles tend to be mid-priced with sedate styling, high safety ratings, EPA city/highway mileage ratings in the low 20s and high reliability ratings from Consumer Reports.

It’s a package that attracts a high-income demographic of college-educated professionals (lots of medical folks, who apparently appreciate the all-weather capability), more than a few lesbians (About.com’s Lesbian Life ranked the Forester as the No. 1 vehicle for gay women) and impressive loyalty among owners.

"We attract well-educated people who buy a vehicle that does what they need it to do and are comfortable in their own skin," said Michael McHale, a spokesman for Subaru of America Inc.

Subaru’s retention rate, at 50.5%, is only slightly better than the industry average of 48% recorded by data tracker J.D. Power and Associates. But Turner contends that many Subaru owners sell their old cars to friends or family and pay cash for their new Subarus, and thus don’t show up in surveys as repeat buyers who do trade-ins.

Turner said Subaru owners tend not to shop other brands when looking for a new vehicle. "That gives the company a continuity that’s a little bit unique in a down market," he said.

A major driver of Subaru’s sales last year was the redesigned Forester, which helped boost the model’s sales by almost 37% compared to 2007. The sporty WRX version of the Impreza also helped lure a younger generation of buyers to the Subaru clan.

Subaru also has worked hard to cultivate a green image. Its manufacturing plant in Indiana, for instance, is engineered to produce zero landfill waste.

Despite these successes, Subaru, unlike other Japanese carmakers, hasn’t conquered California. Its all-wheel-drive vehicles are more popular in New England and the Rocky Mountain states than in the Sunbelt, and its market share in California is less than its U.S. market share, which hit a high of 1.9% in December. For the full year, Subaru sold 187,699 vehicles in the U.S. 

Despite predictions of continued tough sledding in the new-car market this year, Subaru hopes to maintain its current sales level, McHale said.

—Martin Zimmerman

Photo: 2009 Subaru Forester

Credit: Subaru of America

Comments

[Kyle]

Subaru unexciting? Umm... Ever heard of the World Rally Championship? In the WRC, Subaru has three manufactrer titles and three drivers titles as well. Subaru dose sell a super hot sports car, it's called the Impreza WRX STi. The WRX STi is famous for beating cars that are thought to be far faster than it. There are videos of WRX STi 's keeping up with, if not beating Porshe and Lambo's in quarter mile runs. Subaru is very active in the motor sports scene. If you have not figured it out yet I am indeed a disgruntled Subaru fan. All in all I thought this was a good artical. At least Subaru is getting some kind of recognition.

[oni]

I'm a heterosexual grandmother who drives the Forester, 2008, a svelte and safe car with a classy understated look. It handles snow, ice and dirt roads beautifully and there's plenty of room for my big dog to ride in the back
even when I buy groceries.

[Earth Ling]

Sorry Kyle, but even for a WRC car the Subaru Impreza was rather boring in comparison to its predecessors: Audi Quattro, Lancia Delta, etc. Most AWD turbo cars can impress in certain situations against expensive RWD supercars. That is great if that helps your ego. :)

[Jeff]

Oni, as opposed to a homosexual grandmother? Bizarre.

[Willa]

Not so bizarre, Jeff. There are many lesbians who have children. When their children have children, they become homosexual grandmothers. But let's focus on the point of the article - Suburus are great.

[dreia]

I love my Outback -- it's a '98 and I keep waiting for it to die so I have an excuse to get a new one, but the guy at my auto shop told me "Subarus never die -- these things last forever." And the article is right -- I couldn't care less what people think about what I drive. I'm happy.
BTW, to Jeff -- I was just at a wedding a couple months ago that was two grandmothers. Of course there are homosexual grandmas!

[Greg]

As a five year Resident of Croton on Hudson New York after living in Los Angeles the previous 45 years, we decided to trade our 2002 Mustang convertible for a 2007 Outback.

We were visited by a snow storm two days later while traveling a New York Interstate. At one moment a car ahead of ours began to slide...motorists following behind hit their brakes and they too lost traction.

That little Outback had the traction and control we needed at that precarious moment. AWD may not seem important if you're in the sun belt, but even then you may find yourself on a snow or ice laden pass such as the Tejon or a ski resort road.

Then you'll know the appeal of a Subaru, especially so if you see yours or other cars sliding uncontrollably .

[Joe Pattone]

Huh? Has the writer even taken a look at the cars Subaru is offering? Is the WRX not a perfiormance car? How about the 300 horsepower WRX STI?
How abut the Legacy GT and Legacy GT Spec B?

This article sounds like it was written in 1988.

[Renato Piereck]

Won, I thought this article was going to address how Subaru's current look-like-a-Toyota styling on the new Impreza and Forester is actually selling... instead it addresses brand loyalty but misses a few points: no super-hot sports car? As Joe Pattone mentioned, the STi and the Spec B are hardly unexciting... and Earth Ling, sure the Audi Quattro and Lancia Delta sure were very exciting cars in their days, but nowadays they are not made anymore. The STi is. This article misses a few points on brand loyalty. Subaru is a very strong brand in the snow belt. Anyone who ever drove a Subaru in the snow knows how capable the symmetrical all wheel drive system is. Add some snow tires and you have a road going snow machine. I live in Fairbanks, Alaska where our winters are six month long icy hells. The cars of choice here are pick up trucks and Subarus. Go to any snowy place like Salt Lake City, Washington, New England, Winsconsin, etc, and you will see a lot of Subarus too.

[ryan mccoy]

as a 25 year old heterosexual welding supply worker in nashville, i am quite pleased with the performance of my "lesbian wagon" 04 forester xt. it will keep up (and embarass) many perfomance cars, yet haul whatever i need, get decent gas mileage, received fantastic crash test ratings, go offroad and is more reliable than most anything out now. THAT is why i bought a subaru, and will again. no mystery, you just have to drive one to understand. subaru owners buy into practicality, not pomp.

[Dave Chang]

This blogger needs to do more research.. even a quick Wikipedia read would've revealed Subaru's motorsports heritage and hugely active internet forums. And I wonder why the annual Subiefest event is held in Rosamond, California?

[Kyle S.]

You are kidding me, right?

As a journalist you should do more research. The Subaru main office is in Cherry Hill New Jersey, pretty good distance from being supposedly ran in California. A 30 second look at their homepage would confirm this.

"Don't sell attention-grabbing metal" How about taking a look at the current and previous STi lineup. World rally blue with gold wheels, and a monster hood scoop is not attention grabbing?

I think your argument is irrelevant and think that you should stick to stock evaluations instead of car brand critiquing.

[Gregory Smith]

Obviously this writer is another one of the "Buy American" biased writers who thinks the only "super hot sports cars" have the word "Hemi", a "horse" logo, or possibly a Corvette badge on them.
I promise you, if he were to venture out of the safe environs of Southern California, where there is no such thing as winter, to other parts of the country, he couldn't swing a dead cat without hitting a Subaru. Brand loyalty? Who posted sales GAINS in this economic environment?? Oh, that would be SUBARU!!

If he comes up here, we'll be happy to give him a ride around Infineon Raceway at a track event, where we'll happily demonstrate how a simple little Forester can put the smackdown on some major players in his "sports car" genre. Yup, an automatic transmission equipped Forester.

[ssnerd]

I guess the author is WAY out of touch with the reality of the automotive world.
This piece is lame, and totally misses the entire WRX/STi, Forester XT, and Legacy GT/Spec B performance part of Subarus line up of vehicles.

This article just restores my faith that the meida is uninformed and intends to stay that way at all costs or just reports what it is told to.

Oh yeah.....There is a video of Ken Block on youtube that the author may wish to view and THEN tell us that Subaru has nothing about performance to offer.
http://www.youtube.com/watch?v=rs-jAImScms

[J. White]

I think it's pretty obvious that the "Journalist" that wrote this article didn't really do much research into the Subaru's legacy of motorsports participation.

It's somewhat understandable though, since Subaru doesn't make cars that a layman would identify as being high-performance. Which is one of the main reasons that Subaru has such a devoted following, unlike other manufactures that produce low-slung sports cars that only come out on sunny days and then quickly get whisked back to their heated garages Subarus maintain their practicality even while offering absurd levels of performance.

For example, my 300hp STi still has 4-doors, 5-seats, and AWD. So I can use it as both my commuter car and my fun weekend car all year long, even in the depths of a New England winter... lets see a Mustang do that.

[S. Marshall]

Kyle S.:
"As a journalist you should do more research. The Subaru main office is in Cherry Hill New Jersey, pretty good distance from being supposedly ran in California. A 30 second look at their homepage would confirm this."

First off, reading comprehension owns you... The author never stated in the article that Subaru headquarters was in California. He said Subaru was an "also ran" in CA, which means that sales are supposedly marginal in CA as opposed to snow belt states.

That being said, the author obviously has never traveled in the northern parts of the state, including the Bay Area and Lake Tahoe, where Subaru vehicles have a very strong presence. I'll forgive him for that, though, because we all know the world revolves around Los Angeles after all.

And there is no super-hot sports car in Subaru's line-up? The WRX STI can lay the smack down on many so-called super cars, but maybe this is about semantics. Okay, so maybe it is a sports sedan that can comfortably seat 4 people and their stuff, and no wedge-shaped, impractical 2-seater with no trunk space. Nonetheless, the performance number speak for themselves. Even the first generation of the Forester XT (MY04) posted 0-30 mph acceleration numbers that embarrassed Ferraris, Vipers, and a few other "sports cars."

[Billy Boy]

The article was written for Subaru's CURRENT lineup. Why do some of you keep referring to the old STi? The Ken Block video posted is in the old model STi. And posters have mentioned their 04-05 Forester XT's? The new '09 Forester XT only comes in automatic, which is unexciting.

Yes, the STI was an exciting car, and then the '08 model came along. The new version is boring, softened up, and a sellout to all the "affluent man-childs" (as SOA puts it) out there. Subaru has also pulled out of the WRC. So someone please tell me; what is Subaru doing exciting currently?

[Renato Piereck]

Billy Boy, if you are right, then why is the writer quoting things that happened to Subaru in the past? Like the Forester being named the car of the year by About.com Lesbian Life?

[Jim Andrews]

I love my 2006 WRX sport wagon, but I was APPALLED by the 2008 redesign of the WRX and WRX STI. The Impreza WRX used to look aggressive and purposeful, now it looks like a Korean economy car. Very disappointing. However, Subaru will unveil their Legacy concept at the Detroit auto show this month and it looks promising. Hopefully, Subaru will win me back as a fan.

[Jes]

No Offend intended, but the one that written this, seems like he Really Doesn`t Know deeply about Subaru, nor have driven / owned one.

People should not talk / write about things they Don`t Know...

Kind Regards!

[Peter Hong]

I'm a Times reporter and occasional contributor to this blog. I drive a Legacy GT modified with Eibach springs, Koni adjustable dampers and the SPT lower chasis brace.
I think some of you are nit-picking. The bulk of Subaru's customers --and those driving sales up last year, especially with the screwed up 2008 WRX-- are not the performance tuners like us. That's the basic point of this blog post.
Even for us hot-rodders, there's some appeal in Subies featuring "sedate styling." I think that's why some of us choose Legacys and Foresters (those in the know understand Foresters can take most Sti upgrades) for performance driving -- we like the all go and no show approach.

[Jason]

As for the MPG. My 26 year old GL 4WD wagon gets 35mpg on the hwy. I drive regularly to a state forest where I take it out on some of the OHV trails (yes I have a permit, and yes it does well, but it's modified for it) I top up when I leave, drive 70 miles there, top up before heading into the woods. (always a good idea) And every time it's only used up 2 gallons. And I have to drive through downtown Portland, OR to get there. I love it. The Jeep guys I go with get envious when they are almost empty and need to head out I still have 3/4 tank left. Yes the new AWD systems tend to be a drag on fuel economy. But you'll always get there. :)

[Billy Bob]

Peter, you make a good point. The article is about Subaru's unexciting road to success. It has not been successful mainly because of it's turbo Impreza cars, rather its success is based on the "unexciting" cars that non enthusiasts purchase and drive. The Outback, the base Impreza, Forester, etc.

[Joe the plumber]

I think you missed on a few points.....

Subaru does cater to a performance driven enthusiast. They boast a number of turbo cars as well as 2 marquee cars in the Impreza STI and the Legacy Spec B.

But I will give you this, the company is going bland, they are trying to appeal to the mass market instead of the loyal customer, this in turn will produce great numbers for the first few years, but what happens when toyota or honda comes out with something appealing, all those little subaru's will get traded in and since there is no passion in an everyday person, as there is in an enthusiast, subaru will be left in the dust.

As a subaru owner, not a crazy psycho one, i can say that there are other cars out there that are offering much more than the current subaru lineup, save for the STI, unless you can afford a Lancer Evolution.

But I would GLADLY trade in my 2.5i for a mini cooper S, a mazda RX8, a VW GTI

the AWD isnt that high on my priority list.

[Joe Shlabotnick]

Too bad this columnist is a functional illiterate: "... a U.S. new-car market that was, literally, a car wreck"? Unless the car market was actually involved in a car wreck (which of course it wasn't - markets don't get in car wrecks; cars do), then it can't "literally" be a car wreck. Figuratively, sure, but literally, no.