By on June 8, 2017

2017 Subaru Impreza 5-door Sport - Image: SubaruSubaru of America set an all-time annual sales record in 2009.

You remember 2009, though you’d likely prefer to forget it.

The auto industry all but collapsed as the global economy went into meltdown. After total U.S. new vehicle sales volume fell to a 25-year low in 2008, sales tumbled a further 21 percent in 2009, the worst year for auto sales since 1982.

And yet Subaru of America set a sales record in 2009.

2017 is no 2009. But after surging to record levels in 2016, the U.S. auto industry’s sales volume is once again shrinking, albeit modestly. But Subaru of America president Tom Doll told Automotive News, “We certainly think we’re going to have our ninth consecutive year of record sales.”

No doubt.

Subaru followed up 2009’s record output with annual sales records in each of the next seven years. Subaru’s volume in the U.S., by far the brand’s most important market, nearly tripled between 2009 and 2016.

2012 marked the first year with more than 300,000 sales. A year later, Subaru topped the 400K marker. Two years after that, Subaru sold more than 600,000 new vehicles for the first time.

Assume continuation of the brand’s 9-percent growth rate achieved through 2017’s first five months, plus growth not even half that strong in 2018, and the brand will top the 700,000-unit barrier.

This isn’t Double A ball. Subaru is mainstream.

The launch of a new Impreza is certainly helping right now. As consumers increasingly reject passenger cars, the new Impreza reported a 42-percent year-over-year improvement through the end of May. Next, count on the new Impreza-based Crosstrek to provide a sales boost. Speaking of the second-generation Crosstrek’s launch, Subaru’s Doll says, “I think that Crosstrek is going to be spectacular.”

That won’t end the new product surge. Subaru is freshening the Legacy and Outback — the latter is off-and-on Subaru’s top seller — for the 2018 model year.2017 Subaru Ascent Concept - Image: Subaru2018 also brings about the 2019 Subaru Ascent, Subaru’s long-awaited successor to the failed Tribeca. It remains to be seen whether the Ascent will bring new buyers into the fold or simply migrate current Subaru loyalists north from the Outback and Forester.

If there are problems for Subaru of America, demand clearly isn’t one of them. While often constrained in the past, capacity at the automaker’s Indiana assembly plant (where the Legacy, Outback, and Impreza are built) is unlikely to be an issue for the next half-decade, according to Doll. And even if it was, Subaru would much rather be moderately short on supply than be the holder of excessive inventory.

The shrinking market won’t pose too much of a difficulty for Subaru, either, especially if the automaker is willing to ramp up incentives, even mildly, for some of its older models.

No, it’s at the dealer level where service capacity is the automaker’s big issue.

“With all the vehicles that we’ve sold over the last five to seven years, the retailers need to invest their profits in expansion,” Doll says.

Subaru has a Fixed Operations Expansion program to aid in the process, but there’s no overnight remedy. Rapid growth generates a unique set of problems for a formerly small automaker. A dealer network responsible for 16,000 monthly sales a decade ago — and the consequent service responsibilities — sold more than 51,000 new vehicles per month in 2016.

And this year? Likely 55,000 vehicles per month. And next year? Likely more than 58,000 vehicles per month. And the year after that?

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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42 Comments on “Subaru Is Inoculated Against a U.S. Auto Industry Slowdown – Expect 2017 to Be Another Record Year...”


  • avatar
    thelaine

    Outstanding all-wheel drive system is a real draw for this brand in crappy weather regions. Outdoor activity types also love it.

    • 0 avatar
      SCE to AUX

      Everybody demands AWD now, because you might die without it.

      There is sharp criticism for CUVs without it (Niro, C-HR).

    • 0 avatar
      jh26036

      Crappy weather was originally their biggest sell but it’s their squeaky clean, active lifestyle, pet friendly, environment conscious, high value, image that is driving their cars off the showroom floor.

      The marketing team deserves all the praise.

      • 0 avatar
        Wheatridger

        Subaru’s ads about the teen/college student leaving home make me cry, and I don’t even like their cars very much. But when my own college student asked for a used Subaru, I dug in my heels. “You can’t afford that,” I said. “Let’s go look at a used BMW.” There was a 2004 Forester for sale, just like the one I sold five years ago, with similar mileage, selling for the very same price I got in 2012. Really?

        Fittingly, considering its flat-four architecture, Subaru has stepped into the niche carved for the VW Beetle. It’s the favorite cars of people of who don’t like cars. That’s a very comfortable place for a carmaker, where you’re too busy counting profits to worry about engineering excellence.

        • 0 avatar
          28-Cars-Later

          You haven’t been able to buy a used ‘Ru for probably the last decade. This despite the head gasket issues.

          Stay leasing my friends.

        • 0 avatar
          gtemnykh

          “But when my own college student asked for a used Subaru, I dug in my heels. “You can’t afford that,” I said. “Let’s go look at a used BMW.””

          This was sarcastic, right?

        • 0 avatar
          Pete Zaitcev

          Head gasket issues? Sounds like missile striking TWA 800. I know a guy who’s commutes in Subaru Loyale with 315k miles. Although, to be perfectly honest, I cannot be sure he never changed a head gasket on that thing. Still, I changed a head gasket on Neon. It was fairly painless and only costed me $816. The car ran for another 100k after that.

          • 0 avatar
            gtemnykh

            Pete the HG issue is absolutely infamous on the EJ25 engine series (particularly bad on earlier DOHC, but a serious issue on later SOHC variants too). The smaller displacement EJ22 was spared these issues. Not sure what engine generation the older Loyales had, but I distinctly remember family friends in Ithaca NY having problems with overheating on their mid 80s Loyale wagon.

          • 0 avatar
            Jack Denver

            When they bored out their 2.0 (JDM) or 2.2 to 2.5 L it created head gasket problems, I assume because there was no longer enough mating surface for the gasket. Initially they leaked to the inside so they changed the design a little and then they leaked to the outside. You have to change the gasket either way. The new multi-layer metal gaskets seem to be a permanent fix, either the aftermarket ones or the Subaru factory part that they call for on the turbo engines (which have the same gasket pattern). I agree that changing a head gasket, even if you have to pay someone to do it, is not the end of the world – if you have to spend $1,000 (and another $500 on the timing belt) to keep an otherwise reliable car on the road for another 5 or more years it’s not like it’s the end of the world. It’s not like it’s a VW diesel fuel pump job that costs more than the car is worth.

        • 0 avatar
          TW5

          @ Wheatridger

          Lots of manufacturers have good branding. They also have armies of terrible pricing “experts” who specialize in removing as much consumer surplus as possible.

          Subaru, apparently, does not have armies of pricing specialists and marketers who screw people out of consumer surplus. That is why they succeed, not because they have good left-wing aesthetic. Do you think “Love” and limp-wristed lumberjacks recruit men to their cause? Do millennials even watch TV? Yet red-blooded men and millennials cue up for miles to get their Subarus.

          It’s not about branding or marketing. It’s about consumer surplus endemic to the engineering department. The ads only make people look at Subaru.

          • 0 avatar
            Jack Denver

            What is this consumer surplus (aside from the AWD system)? The crappy interiors? The antique engine design and single platform that is tweaked and disguised but never truly updated? The unreliable head gaskets and oil consumption? The rust? The strange styling? (Some but not all of these things have improved).

            Subaru reminds me in many ways of the old American Motors/Jeep, where they turned necessity (the lack of scale and the funds that come with scale) into (somewhat) of a virtue but ultimately a mixed bag.

          • 0 avatar
            TW5

            @ Jack Denver

            It depends on the customer. However, if you compare Subaru side by side with similarly optioned vehicles (mechanical and powertrain options), Subaru is generally a better value, particularly if you want an AWD hatchback or midsize sedan. Few manufactures offer these options.

            I’m aware of the gripes against Subaru, and of their vulnerabilities going forward. That’s why I’m stunned no manufacturer has been smart enough to steal Subaru’s turf, and I don’t expect the halcyon days of Subaru’s present to continue for consumers.

      • 0 avatar

        “Crappy weather was originally their biggest sell but it’s their squeaky clean, active lifestyle, pet friendly, environment conscious, high value, image that is driving their cars off the showroom floor.”

        Boom. It’s not rocket science. They have a great image, pretty good product, and deliver good value.

    • 0 avatar
      Jack Denver

      Their current AWD system in CVT equipped vehicles (most of them) is less than outstanding but the market doesn’t seem to care about eye glazing technical explanations of viscous couplings vs electronic clutches, etc. The fact that there is an AWD sticker on the car is sufficient.

  • avatar
    VW4motion

    Subaru will need a real scandal to slow down these sales.

    • 0 avatar
      nels0300

      They already had one recently with their oil burning FB engines.

      I had a 2013 Impreza oil burner, wife has a 2013 Forester oil burner.

      Before that, it was oil burning and head gasket eating EJs.

      So, doesn’t seem like anything can stop Subaru.

      • 0 avatar
        SCE to AUX

        Agreed. This is recent history, and I wouldn’t recommend one (especially used) to anybody.

        • 0 avatar
          nels0300

          The funny thing about that is that Subarus have ridiculous resale value, at least here in Minnesota.

          I’m grateful for that, because it allowed me to get out of my oil burner without losing my butt too much.

        • 0 avatar

          “Agreed. This is recent history, and I wouldn’t recommend one (especially used) to anybody.”

          *Unless it is an H6

          • 0 avatar
            Mogi67

            My 2012 Legacy 3.6r loved eating oil. Sold it with 56k miles on it. Awesome car despite that

      • 0 avatar
        VW4motion

        Should have put “real” in quotes. I’ve owned 5 Japanese cars and they all used up 1 to 2 quarts every 5000 miles. Especially the three Honda’s . And correct me if I’m wrong Subaru fixed or is willing to fix every oil usage issue on their vehicles. As for “real” scandal. Subaru has not had VW dieselgate or Toyota gas pedal scandal.

        • 0 avatar
          nels0300

          I’ve owned 14 cars.

          My brand new Subaru used more oil than any of them.

          The fix involves replacing the engine. Basically a heart transplant on a brand new car. No thanks.

          The scandal was real for me.

          • 0 avatar
            bullnuke

            nels0300, the “scandal” was real for me also. I figured that cars are built at a manufacturing facility in an orderly and quality-assured manner and I hesitated to get the short block replaced (which was done, by the way, in one day with a new Legacy as a loaner). The service manager had to talk me into it. Had it done at 17k miles because I was using a little less than the 1/2 qt per 1200 miles limit set by Subaru. My cost (other than time to drop it off) was $0.00. 10k miles later and after one oil change I have used no measurable amount of oil still using that water-thin 0W20 synthetic. I’m impressed and satisfied. I’m old enough to remember that some new vehicles (including my new ’71 El Camino w/350) years ago routinely using 1/2 to 1 qt of 30W or 10W30 between the 3k mile recommended oil changes. If you still have your Forrester, do the transplant.

          • 0 avatar
            nels0300

            we do still have the Forester, and it still uses oil, about a half quart per 1200 miles.

            I’ve just left it alone, because it hasn’t gotten worse, yet, and I fear the dealership screwing up something.

          • 0 avatar
            Jack Denver

            Pulling a 4 cyl Subaru boxer engine is easier than most – the block is maybe a foot long from back to front. Someone who is practiced can have the whole engine out in a surprisingly short time.

            If you ever have to have the head gaskets done, make sure that they pull the engine. Some mechanics use short cut methods to replace the gasket without pulling it, but it’s impossible to do a good job cleaning the mating surfaces, etc. while the engine is still in the bay.

    • 0 avatar
      ACCvsBig10

      Because they dont offer incentives,even though you can find deals at the right dealership, keep the resale value high.

  • avatar
    Steve_S

    Subies AWD is OK its not even close to outstanding and I’ve had two of them.

    They are a company of hatches, tall wagons and CUV’s exactly what is selling right now and they have a clear niche they stick to and loyal customers.

  • avatar
    2drsedanman

    I feel like their marketing department deserves a lot of credit for their success. Their commercials have done a good job with correlating safety and love of family with the Subaru name. Also seems to be the brand synonymous with dog lovers. I’m sure the conservative styling draws people in as well, especially when compared with the direction some of their peers are going.

  • avatar
    deanst

    The value of marketing and consumer reports is often overlooked. For a person who just knows he wants a reliable AWD vehicle, the first stop is the local Subaru dealer.

  • avatar
    icarus_

    They also do a good job spending money on areas people care about (IMO anyway). Safety, robust (if not the most advanced) awd, and clean simple interiors, especially nice on the newest models, and a unique direct driving feel. They skimp in other areas but are able to price their vehicles to reflect that – thus the strong perceived value.

    I personally love boxer engine layouts, and the WRX/ STI make good power with them… but I do wish they would invest in some more advanced powerplants. A new flat 6, a new high output 2.0 for the STI (and maybe a sport legacy or top level outback) seems like it would go a long way. But that is just me, the meager power level of their entry level vehicles does not appear to be slowing sales down.

  • avatar
    FreedMike

    Mazel Tov to Subaru.

    Still don’t want one.

  • avatar
    Alfisti

    I drive a 9-3 wagon and the only sensible replacement is the Outback if i were to continue family duties (I don’t, that’s the wife’s car now).

    Outside of full blown SUV the golf wagons are too small, the volvo line up is ABSURDLY priced and well, that’s about all there is!

    In saying that, their engines, meh, well overdue.

    • 0 avatar
      30-mile fetch

      You’ve repeated the Golf-too-small statement many times before so I looked up the interior dimensions and I’m trying to determine if it is possible to split a hair any thinner. What are you fitting inside a 9-3 that cannot also be accommodated in a Golf wagon? I fit twin car seats and gear for a 2-week road trip for 4 in ours. I fit 8-foot long lumber. Big rubbermaids, suitcases, an assembled baby changing table. Ours was a fine accommodator of daily “family duties”. Did you order a gigantic custom roller suitcase in the exact size and shape of the 9-3 load floor and are disappointed that you cannot quite get the Golf’s hatch closed with it? I’m genuinely curious where the deficiency lies, because the Golf is going to come far closer to your 9-3 in character than an Outback will, so you must be seeing some large difference here.

  • avatar
    newenthusiast

    Subaru seems to not only have a clearly defined sense of what they are and what they want their vehicles to be known for, they clearly present that in their marketing.

    I know a lot of people don’t get the appeal (on this site I’ve read things like ‘ugly’, “too slow’, ‘under-powered’, ‘need some higher output/sporty cars”), but anecdotally, everyone I personally know who has a Subaru loves them. Swears they will ever buy another brand.

    They identified their market, then identified the traits that those buyers emphasize when buying cars, and have focused on building vehicles that reflect those traits. Its not hard conceptually, but the long term commitment to it is pretty impressive.

  • avatar
    Pete Zaitcev

    Remember how BMW’s research found out that 80% of their buyers have no idea if their cars are RWD or FWD? For years Subaru was only shipping their traditional AWD only manual-transmission cars only, whereas the majority of buyers choose cars with Lineatronic CVT and the same clutch-based AWD that Toyota has in RAV4. Yet I still hear about Subaru AWD this or Subaru AWD that.

  • avatar
    TW5

    The key to Subaru’s success is straight-forward. Subaru offers superior value. For $25,000 buyers can get a respectably appointed, purpose-built AWD vehicle. Furthermore, every vehicle they sell essentially has top-trim mechanical components (with the exception of turbocharging, which some customers may not want). Subaru also offers only 7 vehicles, and only 5 are in the wheelhouse of most consumers, who won’t be interested in the BRZ or WRX. The buying experience isn’t terribly complicated, and the sales people tend to be informed.

    When you buy a Subaru you get simplicity, value, and virtually no bundling games regarding powertrain components. Surely, only hipsters and lesbians will appreciate Subaru’s business model? That’s what the industry apparently thought.

    The sad story for Subaru is that CAFE 2025 is probably going to put them out of business. Subaru hybrid technology isn’t advanced enough, and the efficient AWD systems of the future will be like Jeep’s FWD-part-time-AWD systems or Toyota’s upcoming FWD-with-electric-RWD. If Subaru makes an alliance to survive the CAFE cull, the super major they marry with will kill their value proposition to force Subaru inline with the oligopoly.

    Enjoy the consumer surplus while it lasts. The Federal Huns are on their way.

  • avatar
    zip89123

    Sales will tank with the next mild winter. I tried to like an Outback, but the 3.6 is overpriced and the 4-cyl is a dog.

  • avatar
    matt3319

    Im happy for Subie. I hope they don’t lose their Identity getting as large as they are. Now with that said, why can’t Subie make the little boxer motor in the Impreza just a bit more powerful. Thats the only reason I would get a Crosstrek or the new Sport. Oh, besides the CVT. Luckily you can get a manual but its still a sloth. Nothing a lite pressure turbo cant fix.

  • avatar
    EAF

    Don’t forget ring-land failures, piston slap & spun bearings. All are prevalent in the Subaru community. I would take a WRX if it had and LSx swap. Sickkkkkk

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