By on June 8, 2015

2015-Subaru-Outback-01

Subaru has a problem, though it’s a problem many other automakers would love to have. The small Japanese automaker is growing at a rapid rate and it’s fully expected to run out of capacity to fulfill demand sooner rather than later. Most automakers would simply expand and flood the market with more units to feed the sales rush, but for Subaru it might mean becoming the opposite of the market position and perception they’ve taken years to cultivate.

As Bloomberg‘s Kyle Stock puts it, “Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be.”

The article, published today, paints Subaru between a rock and a hard place with two options: stay small and negate future growth or expand and possibly alienate all those customers who bought into the brand under the promise “Love. It’s what makes a Subaru, a Subaru.”

Subaru’s recent growth isn’t driven purely by marketing, but also because the small manufacturer was positioned in the right place at the right time with the Outback and Forester, both of which sit squarely in the currently hot crossover segment. In fact, even the lowest selling crossover in Subaru’s lineup, the Impreza-based XV Crosstrek, outsold their top selling passenger car, the Impreza, by over 14,000 units in 2014.

That makes what Subaru doesn’t do right now of particular interest. From Bloomberg:

It doesn’t have a luxury brand like Honda’s Acura or Toyota’s Lexus. It still doesn’t make a giant SUV, or a truck, or a super-expensive “halo car” designed to drum up interest from teenagers and the Top Gear crowd. Its sedans aren’t particularly popular and the company doesn’t make much of an effort to sell cars in Europe, the Middle East, or South America, like Nissan or Ford does. Kansas is the closest thing it has to an emerging market. Subaru still can’t meet demand. By the end of next year, Subaru’s factories in the U.S. and Japan won’t be able to produce more vehicles.

Currently, Subaru is enjoying a sky high 9 percent profit. However, if it does choose to expand and the crossover boom goes bust, it could leave Subaru vulnerable as it will need to discount their way into driveways to keep operations afloat. With incentives comes lower resale values, in turn driving consumers to competitors – the same customers that appreciate Subaru’s smallness.

What will Subaru do? We’ll see. But, mass market is not what has made Subaru a successful Subaru to date.

 

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102 Comments on “Bloomberg: Subaru “has to decide what kind of company it wants to be”...”


  • avatar
    28-Cars-Later

    I’ll take a profitable one for 400, Alex.

  • avatar
    TW5

    Stop building the Impreza sedan. Convert all Impreza hatchback capacity to XV Crosstreks and WRX’s. Scrap the BRZ.

    Subaru can’t invest in capacity because they have no chance of meeting CAFE standards with their current products. Subaru will necessarily invest in powertrain technology, whether they want to or not.

    • 0 avatar
      Sigivald

      Why would they stop building the Impreza?

      According to GCBC, of the 50k cars they sold in May, 8500 were Imprezas (and that doesn’t include the WRx).

      Why kill a line that’s 1/6 of your sales?

      Now, the BRZ, that you can EOL tomorrow.

      (And if you’re worried about CAFE, why would you kill the Impreza?

      It’s Subaru’s *most fuel efficient* line, at up to 37/28, just like my Corolla.)

      • 0 avatar
        TW5

        They need capacity for high-margin CUVs. How do you expect them to get it? By canceling production of a low-volume product?

        CAFE is based on footprint. It doesn’t matter what the Impreza makes. It matters how close/far it is from the economy requirement, and the cost-benefit of spending money on Impreza cars. Most importantly, I suppose, they need to get the XV classified as a light-duty truck.

    • 0 avatar
      djsyndrome

      Oh look, someone calling for the death of the BRZ for no reason whatsoever. Never seen that before.

      You’re Subaru, and Toyota has (mostly) bankrolled the production of your sports car. Said car isn’t cannibalizing any of your other products, all of which are selling just fine on your own. The R&D work is done and you can safely move 15k of these things a year (plus whatever Toyota is paying you to build). Why would you kill it? Ride it into the sunset, and then either put out a second generation or walk away. But axing a car three years into its product cycle is asinine.

      • 0 avatar

        A space on a transporter, dealer lot, or floorplan occupied by a BRZ instead of an Outback, Forester, or XV is an absolute waste of money. Period.

        • 0 avatar
          See 7 up

          Based on this, Subaru should only sell one car – their best selling model.
          Why waste the room…

          I’ve been to many Subaru dealerships. Nobody is left wanting for a OB, Forester or XV due to the 1 or 2 BRZ’s on the lot.
          Yeah is “uses” floor space but to be honest I don’t see any dealership with a mountain of them as to make that claim.

      • 0 avatar
        Willyam

        Question: Is Subaru responsible for engines for both BRZ and the Scion? I got the impression it was a Subie motor…but I may be wrong on assembly. Are they sacrificing capacity in any way by building motors for Scions?

        Sorry, total neophyte question, but I really like these cars.

        • 0 avatar
          See 7 up

          Willyam – its the same engine, and I am guessing Subaru is building them. As for sacrificing capacity, can’t say. The powertrain assembly may not be the bottelneck.

    • 0 avatar
      28-Cars-Later

      Sigvald went and got data and I applaud him, but I was going to say you need Impreza because it is the entry level model. Crosstrek is sold I think at a 3K premium to Impreza and can be done so because it is not the entry level model. If it becomes the entry level model so be it, but there were still 8500 customers who 1. could not afford the price premium or 2. did not want the Crosstrek vs Impreza. You risk alienating that group with such a plan, and risk alienating a percentage of that 8500 who don’t want Crosstrek even if you drop the price 3K then give up profit on the Crosstreks you are already selling.

      • 0 avatar
        TW5

        Clearly, the crux of the issue is limited capacity. In a limited capacity situation, the problem with low-margin products is you’re neglecting high-margin customers for the sake of the low-margin bargain hunters.

        One of the worst scenarios in business is a stock-out. Much worse than alienating the bargain shoppers on your lot. Besides, they can still build some Impreza hatchbacks without the lift kit, if they are really worried about the fuel-conscious bargain-hunter.

        • 0 avatar
          28-Cars-Later

          I see your point but I see it as if 1/2-2/3rds of capacity are in the higher margin product vs the lower margin one, overall platform production is still profitable which is the ultimate goal of the mfg. You still need the lower margin product in order to help justify the existence of the higher margin clone while also still giving dealers a cheaper product to sell for those who $3K (or whatever the markup is vs Impreza) is a deal breaker. Not to mention preference of the Impreza to Crosstrek for a percentage of Impreza buyers.

          The other factor unique to Subaru is the fact the WRX halo car is based on Impreza. You can’t lose Impreza as a model if only for this reason. Even if you did lose Impreza and future WRX models become some kind of one off, the WRX no longer becomes a profitable halo car. So do you drop your trendy boy racer halo car in order to increase production of Crosstrek? Tough call.

          • 0 avatar
            TW5

            If Subaru have the XV, they have the Impreza platform; therefore, they have the WRX in hatchback form. They are losing the Impreza sedan and cutting back Impreza production to make more high-margin XVs and WRXs. I’m sure they will keep a few i-trim Impreza manuals for the diehards, but for all intents and purposes, Impreza volume plummets to make way for more WRX and XV.

            The Impreza sedan must achieve roughly 40mpg combined in 10 years. I’m not sure WRX will survive the cull, regardless of what they do now, and I’m not sure Impreza can make 40mpg combined. Best bet is to get XV into light truck territory and work on the hybrid powertrain. Either that or spend all profits lobbying for an end to CAFE.

          • 0 avatar
            28-Cars-Later

            I like your last point. I think we’ve reached the mileage limits of the conventional gas ICE with current emissions controls.

            Additional: You make a point about a five door WRX. I’m not a fan so if WRX people would like it then you’re right.

  • avatar
    Advance_92

    “It still doesn’t make … a super-expensive “halo car” designed to drum up interest from teenagers and the Top Gear crowd.”

    This writer didn’t watch much Top Gear until a few years ago, and neglected to read any kind of performance-oriented car magazines since 2001. I worry they didn’t do much research and relied on ‘business sense’ to carry the article through.

    • 0 avatar

      Agreed.

      When I was in the pharma world, I used to marvel at the amount the WSJ got wrong. I quickly concluded that most “business” columnists just make shit up and expect us to believe it because it arranges electrons a certain way.

  • avatar
    Sigivald

    “It still doesn’t make a giant SUV, or a truck, or a super-expensive “halo car” designed to drum up interest from teenagers and the Top Gear crowd.”

    Teenagers want a WRX STi already, don’t they? As do the sort of Top Gear Crowd people that Subaru would ever have any hope of attracting in the first place.

  • avatar
    George B

    Maybe Subaru can build a joint venture plant with Toyota.

  • avatar
    Car-los

    For a car manufacture growth is a particular dangerous step that should be taken with a lot of caution as it requires a lot of investment and therefore a lot of debt, look at Fiat group, around 10 billions in debt.

    As Mark points out, Subaru was at the right place at the right time with their Suv’s but if when the market trends change again Subaru won’t have the necessary flexibility to adapt if it is carrying a huge debt.

    Subaru has a lot of room for growth, and that is great for them, but I hope they approach it in a measured and cautious way.

  • avatar
    GranMarkeez

    Subaru proves you don’t need a halo car or a truck or a giant SUV in order to succeed.

    Sticking with what has worked for them has paid off handsomely for them.

    Why fix what isn’t broken?

  • avatar
    gtemnykh

    Perhaps re-invigorate some of the long-time Subaru fanbase by offering the Levorg stateside, all while adding production capacity in the US for more Outbacks and Foresters and XVs. Oh and use a bit of that massive profit to figure out a few basics: headgaskets, wheel bearings, and CV axle boots.

    • 0 avatar
      Steve Biro

      They may have figured out the head gasket issue. I can’t swear to the wheel bearings and CV boots. But your general point is well taken.

      Meanwhile, I have a 2010 Impreza Outback Sport and I’m now in the market for a replacement. I’d like an XV Crosstrek but I’m still not sure I can reconcile myself with the 148hp two-liter engine.

      • 0 avatar
        djsyndrome

        You can’t. When it came time to replace our ’08 Impreza the Crosstrek was crossed off the list due to the 2.0L. We went to a Forester instead.

    • 0 avatar

      Hmmm. 2006 Spec. B. 190,000 on the odometer. Replaced the wheel bearings for only the second time last year – they seem to have that figured out. Never have had a problem with CV joints – or boots. Head gasket? Not my engine.

      There, I’ve probably cursed myself now.

  • avatar
    Quentin

    Does this article take into account that Subaru is increasing capacity? The Camry will be out of SIA in the next year or so and they are expanding the plant further. I get the distinct feeling that this isn’t being considered in their ‘peak Subaru by the end of 2016’ claim.

    • 0 avatar

      It is in the original Bloomberg article. Even with Subaru kicking Toyota Camry production out of Alabama and the improvements being made to SIA, there’s only so much Subaru can do before building a whole new line.

      • 0 avatar
        SpinnyD

        I think you meant Indiana, The camry is only made in Indiana and Kentucky in the US. And that’s why they are stopping camry production, to free up plant space.

        • 0 avatar

          This is what happens when you comment on a Subaru article just after finishing a Hyundai piece. Thanks for the correction.

        • 0 avatar
          spw

          They are stopping Camry production because Toyota decided to not renew the contract.

          Article is pretty shortsighted, Subaru is not… they are enjoying huge growth based on good product and current trends and are not in hurry to spend crazy amount of money on new factories. They might be doing what Toyota did as well – building new platform that will be built in new factories that cost 40% less to build for instance.

          Also – Subaru did plan to expand more, they applied for factories in China but were denied since Chinese government considers them Toyota owned company and Toyota already has maximum amount of partnerships in China.

          • 0 avatar
            SpinnyD

            Toyota would be more than happy to renew the contract, but Subaru is the one that didn’t want to renew. Subaru needs the capacity for their cars. This has been in play for a few years now. We have already been planning for the extra Camry production to come back down here, believe me, it would have been much easier and cheaper on Toyiota to keep SIA building those extra Camrys. Good for us though.

          • 0 avatar
            spw

            SpinnyD – thats not true… in the media Subaru said that they are awaiting for Toyota decision on renewal and then that Toyota decided not to renew… obviously it is not cost efficient for Toyota to build their cars somewhere else either.

          • 0 avatar
            SpinnyD

            That may be what the media said, that isn’t what Toyota told us in our daily info meeting at work (TMMK) bottom line, I trust my source more than yours.

          • 0 avatar
            spw

            Actually, it is what Subaru said to the media in official statement. So I dont know what your managers told you, they obviously had no real information. Subaru even moved to assure their workers that they wont be any layoffs after that since they would be moving Impreza there.

            “”Based on changes in Toyota’s production plans, they have decided that the award-winning Camry production contract will not be renewed,” the Journal & Courier’s jconline.com quoted Easterday as saying.”

            http://www.autonews.com/article/20131114/OEM01/131119949/subaru-to-stop-building-camrys-for-toyota-in-indiana-reports-say

          • 0 avatar
            SpinnyD

            My source is Toyota, yours is a online newspaper. I’ll stick with mine, thanks. It’s not like it’s important anyway. Have a nice day.

          • 0 avatar
            spw

            your source is some unknown low level manager, while their source is official statement from Subaru Indiana vice executive that was published on Subaru website as official PR piece.

            But maybe Subaru is officially lying about it, who knows.

          • 0 avatar
            brenschluss

            Since when are press releases expected to be honest or accurate?

          • 0 avatar
            Pch101

            April 2013: “Toyota offered $147 mln tax break to build new model in Kentucky”

            http://www.reuters.com/article/2013/04/18/toyota-kentucky-lexus-idUSL3N0D52XO20130418

            November 2013: “Toyota pulling Camry from Subaru’s Indiana plant”

            http://www.usatoday.com/story/money/cars/2013/11/14/toyota-subaru-indiana/3523917/

            The Lexus ES will be built in Kentucky. It shares a platform with the Avalon, which has a platform that is related to the Camry.

            All of the facts point to TMC wanting to make the move. Flex production means that the inventories of all three models can be better managed if they are built on the same line.

          • 0 avatar
            SpinnyD

            the ES is being built on a separate line. one car only line. the Avalon may be on the same platform ( the next Camry goes to it as well) but it is being built in plant 1, with the Camry. The Venza is currently being built in plant 2 along with, the Camry. When it leaves all of it’s production gap will be taken up by more Camrys. Three lines, two running Camrys, One that has to share production with the Camry. Toyota really didn’t want to have to take 100K camrys back to Kentucky because we are close to max now. Subaru was saying they needed more North American capacity for the last few years. The ES line will only build ES cars, no help there. It doesn’t matter what you want to believe, the bottom line is Subaru needs the capacity, Toyota needs the Camrys built and is running Kentucky almost at capacity now. I just know what the memo from Toyota NA said, but who am I? Right?

  • avatar
    Alfisti

    They have also seen gains from VW’s decision to go downmarket, Saab’s demise and Volvo’s absolutely absurd pricing.

    Subaru needs to sort out it’s engines fast though, this is going to bite them sooner or later.

    • 0 avatar
      Steve Biro

      “Subaru needs to sort out its engines fast though, this is going to bite them sooner rather than later.”

      Exactly.

      • 0 avatar
        bullnuke

        The Impreza engine is a 2.0-l with 148hp. One of its competitors, the Toyota Carolla, uses a 1.8-l 132hp/optional 140hp engine. The Impreza weighs a bit more (approx. 200 lbm) which cancels the horsepower difference. Same mpg for both. This Subaru engine is probably correct at this vehicle/price point. The Forester engine is a 2.5-l with 170hp. One of its competitors, the Toyota RAV4, uses a 2.5-l 176hp engine which is not available with a manual transmission; AWD is also optional at an extra $1400. The Forester weighs 200-300 lbm less which cancels the 1hp difference. Same mpg for Forester w/6-spd man; better mpg for Forester w/CVT. This Subaru engine (FB25 new in 2013) is also probably correct for this vehicle/price point. Of course there’s also a 250hp turbo available on the Forester at a higher price. I’d compare the Outback engines with the Toyota Venza but it’s going out of production along with the other Outback-killer Honda Crosstour. Subaru should consider turbocharging the Outbacks/Legacy’s for those who want “MO PWRRR”; that optional Forester engine would swap right in. As for the Subaru 6-cylinder, its time is long past and should disappear along with the V6’s of other manufacturers of similar-sized vehicles.

        • 0 avatar
          Mandalorian

          Amen.

          Subaru DESPERATELY needs to put a 2.5 Turbo in the Outback. Especially given how popular they are in Mountainous regions, I don’t see why this hasn’t happened yet. 2.5 Turbo has been offered in previous-gen Outbacks.

          Heck, even sticking a Toyota 3.5L into stuff would be a good idea. No one would fault Subaru for using a Toyota engine, they’re some of the best in the world.

          • 0 avatar
            gtemnykh

            If Subaru stuck a Toyota engine in their cars, as well as had Toyota engineers look over the rest of their vehicles mechanically, oh and changed the seats to something larger, I’d be the first in line for my new Toyota-fied Subaru.

          • 0 avatar
            Willyam

            Oooooooh. A collective gasp just rose.

            An Outback with a 3.5 Toyo seems like an excellent idea.

          • 0 avatar
            vtnoah

            What about the 3.6 H6? Provides a solid bump in HP and Torque and is quite the bulletproof engine. What would be awesome is if they turbocharged that engine, reverse Porsche anyone?

        • 0 avatar
          Skink

          Bullnuke. The 2.5 na engine in the Forester is 175 HP.

          • 0 avatar
            See 7 up

            Nope. Its 170 hp and 174 ft-lbs torque.

            I am not sure if its the parasitic losses, but Subaru hp never seem as “free” as someone like Honda’s

  • avatar
    honda_lawn_art

    It’s short sided to think that Subaru’s “smallness” as a company is a major factor in someone’s decision to buy a Subaru.

    Toyota owns 16.5% of FHI, which should be enough to ensure that Subaru does not become a company that competes heavily with Toyota.
    Should be noted that Camry’s are no longer produced at SIA.

  • avatar
    87 Morgan

    WRX STI is not a Halo car? Ugh, I disagree. Young men start with them and work their way ‘up’ to an outback.

    They just do the Halo deal backwards. GM lures you in in a cheap car and hopes you buy a vette when you hit 50.

    Fuji would do well to increase or amend their dealer bonus structure as making any sort of money in selling a Subaru is a tough deal. The customer base will travel far and wide for the cheapest unit they can find.

  • avatar
    See 7 up

    Subaru got lucky with the AWD and CUV boom, while admittedly making its products more refined so that people stepping out of 10 year old cars think the NVH is acceptable.

    What it needs to do to maintain this drive, is to be able to pull people from manufacturers like Honda and Toyota, whose AWD systems will improve to the point that 99% of people won’t care or even know (basically as long as the car goes when the throttle is pressed and they don’t slide around a curve, they will be happy).
    To do this, they need to up their interior quality without increasing price.

    Me? Keep the interior. I just want the new Forester XT with the 6MT (and yes, I’ve driven the very good CVT). I’m buying the 2.5i purely because its a 6MT.
    Is anyone buying manuals these days to be cheap? Note to OEM – put the manual on your top of the line model! Make those luddites spend their money!

  • avatar
    genuineleather

    The biggest issue for future growth is that Subaru can’t really build any more models using its existing platforms/powertrains. They stick that mediocre 2.5 in everything they sell and offer the equally mediocre 3.6 on one expensive Outback trim level if you really, really want it. A three-row SUV would require an entirely new platform and a modern six, a huge investment for a small automaker with limited upper-mid market experience. The most cost-effective solution would be a Subaru version of the Highlander, though I wouldn’t hold my breath for that in the short term.

    One thing they could easily do is take a page out of Honda’s book and start offering big-money top trim levels (Touring and now Elite). I could easily see a certain Outback customer stepping up from a $35k Limited (already the most in-demand trim) to a $40k version with a leather dash, pano roof, and cooled seats.

  • avatar
    See 7 up

    Maybe the genius of Subaru is convincing people that the XV Crosstrek is a bigger, more practical car than the Impreza hatchback. And convincing them that weak engine is adequate.

    • 0 avatar
      Skink

      No. Same body. They’re not doing that.

      • 0 avatar
        See 7 up

        Yes. Same body.
        Talk to a dealer and if you say you need “practical” they point you to XV instead of the Impreza next to it. Happened to me over 3 times at different dealers.
        Maybe they are just told to chase the profit margin of that $3K lift kit.

  • avatar
    rockets

    Does Subaru have any suitors? Would Mazda make any sense, ie for drivetrains and interiors? Is Toyota just wanting to corral them through its partial ownership of FHI?

    • 0 avatar
      Quentin

      Subaru’s longitudinal drivetrain makes them a poor fit for anyone except for Audi. Audi is moving their low end to transverse mount modular platforms with VW, so Subaru’s only suitor is already hitched and they are staying together for the kids.

  • avatar
    65corvair

    They could merge with Fiat!!!!

  • avatar
    Big Al from Oz

    Let Sergio in! He’s looking for a car company.

    Subaru could be FCA’s prestige vehicle and that would leave Chrysler/Jeep/Fiat as the hacks.

    Only kidding.

    Subaru, doesn’t need a prestige brand name as Toyota, Nissan, Honda do. Why not just make Subaru’s in all forms of trim?

    Subaru could design some more expensive and prestigious vehicles as well and move away from price is based on CAFE footprint, you know the car must be better if it is bigger for the same price. Sort of like BMW, MB, Audi. They could turn that 9% in more by value adding.

    Subaru could expand, but do it slowly, with new prestigious and sports sedans/coupes/CUVs.

  • avatar
    ccode81

    Very bloomberg-ish investor point of view article, demanding for expansion and growth to raise the stock price.
    All it has to do to make investors happy is to buy back own stocks with earned cash, to raise value of each shares.
    “The right time” is not only about market trend of SUV, but the favourable currency rate of last 3 years.

  • avatar
    SCE to AUX

    Subaru – the brand built upon the fear of dying in a car without AWD.

    They have to start moving away from the boxer engine – it buys them nothing but trouble at this point. The argument for lower center of gravity is meaningless, and the unreliability of the 2.5 is one of several reasons I wouldn’t buy a Subaru.

    • 0 avatar

      I am on Subaru #5 and have never had an issue with engine reliability. My current ‘Ru has 190,000 on the odometer and the prior one (an H6) had 127,000 when I sold it.

      Why would I want a Subaru with some stupid, heavy, tall I-4 or I-6? I agree with a previous comment…that H-6, updated and blown would be an awesome backwards Porsche lump.

    • 0 avatar
      05lgt

      lower CG is meaningless? I banish you to CUV hell.

    • 0 avatar
      05lgt

      Pch101 and wmba pretty much already covered it, but the answer is the question is wrong. Maybe someone at Bloomberg wants to buy FHI at a discount?

  • avatar
    Dave M.

    They obviously need to add another plant; that said, all their line-up needs is a minivan and a Baja-type normal looking midi-pickup. They already have the chassis for both….

  • avatar
    udman

    I don’t see any excess capacity at any North American Toyota Plant for Subaru to use either, since Toyota owns a small part of the company anyway. There should be some assembly plant available at a bargain price somewhere in the states… the former Mazda/Ford Flat Rock plant? The former Suzuki CAMI Plant? The all set to shutdown GM Plant in Windsor Ontario?

    As far as the Subaru Product Line, I’m not sure where the BRZ is currently built, but the Impreza and Legacy Sedans could be offloaded to mother Toyota…

  • avatar
    an innocent man

    OT: I haven’t seen Pch101 lately? Has another of the B&B disappeared or been disappeared? Haven’t seen HDC in weeks or more. Anyone know?

  • avatar
    runs_on_h8raide

    The BRZ is an absolute anchor. Most Subaru dealerships in SDC refuse BRZs from the district managers. There’s still brand new 2013s out there.

  • avatar
    wmba

    Well, Bloomberg could have gone to FHI’s web page and read the President’s report as of May 15:

    “4th year in a row and the operating margin is planned to record 16.6%.
    With the continuous strong sales momentum especially in North American markets, we are facing an inventory shortage issues. In order to deliver our products to customers as early as possible, we have decided to move up our plan to increase the production capacity in SIA that was originally planned in fiscal year ending March 2021 to the end of calendar year 2016.
    In addition to such capital investments, we have decided to increase R&D expenses especially to improve the environmentally friendliness as well as to enhance advanced safety technology with the aim of accelerating the preparation for the further growth. Thus, we have revised our 3-year investment plan (FYE2015-FYE2017) that was announced in our mid-term management vision “Prominence 2020″ as below.”

    Bloomberg’s reporting reads like a high school project. As a professional article it skims mere highlights and offers zero analysis, plus missed the above statement. So besides getting back the space used at SIA to turn out Camry, it looks as though the factory is going to be expanded in Lafayette in the next 18 months or so.

  • avatar
    STRATOS

    Subaru all wheel drive is what sells these vehicles and the fact that boxy and ugly is in fashion in today’s automotive world.There is nothing wrong with their slow growth strategy and it allows them to charge premium prices.

    • 0 avatar
      RideHeight

      “Boxy” is an ergonomic and safety benificence and “ugly” is a subjective judgement evidently not shared by those lining up to buy Subarus. Both are independent of “fashion”.

      Subies sell a ton. Like the song I’m listening to right now, Nothing Else Matters.

  • avatar
    Pch101

    Headline: “Bloomberg Columnist Invents Problem That Does Not Exist”

    The answer is pretty simple: Sell as many units as possible while maintaining a lineup that is consistent with the branding message and without reducing prices. When more units can’t be sold without branding mission creep or discounting, then the limit has been hit.

  • avatar
    gottacook

    “However, if it does choose to expand and the crossover boom goes bust, it could leave Subaru vulnerable…”

    I don’t know whether it will ever “go bust,” for two reasons: People seem to like vehicles with tailgates, and in addition more of us are getting old enough to want to avoid a car with a too-low driver’s seat.

    Subaru’s several AWD systems remain well respected, and the boxer engine offers a lower center of gravity relative to competitors. As a result of both these characteristics, our Foresters (’06 and ’07) are fun to drive even on dry roads, although the stick more so than the auto.

  • avatar
    mcs

    Tesla would make an interesting partner for Subaru. Think about it. Re-branded Model S,X, and 3 would would fit well with their base. It would give them something to help with CAFE and some high end vehicles for the dealers to sell. For Tesla, they could gain a dealer network overnight.

    • 0 avatar
      RideHeight

      “For Tesla, they could gain a dealer network overnight.”

      In my quadrant of he state that would be as attractive as gaining the Mazda network.

  • avatar
    danio3834

    Expand capacity. With their growth rates, they’ve set themselves up with a good foothold in the U.S. With SAAR forecasts remaining positive, they should be able to justify an expansion to their existing facility in the U.S., or if they really want to be competitive and expand market share, build a new plant in Mexico.

  • avatar
    CB1000R

    Well, they’ve decided to become the company to not sell me a new Outback, since they deleted the MT in the U.S.

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  • AK: Not much of a review and even less of a photo shoot. Since the comments are carrying this post, I guess...
  • Turbo Is Black Magic: Can confirm the two best all season tires currently on sale are not on this list. Continental...
  • redapple: No. NO F ing way will i take the 16 inch center screen. I want the real knobs. No sale. I May need to get a...
  • Daniel J: I just don’t see the interior being 14k more than my Mazda 6 grand touring reserve.
  • ToolGuy: @Dan, The GMT400 vs. GMT800 question has always been interesting to me. I recently did some work on my...

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