By on July 6, 2017

2017 Subaru Impreza Indiana Assembly Plant - Image: SubaruMaybe, we told you in early May, you’ll soon be able to get a deal on a Subaru Outback.

As new vehicle demand gradually shrinks in America, every automaker wants to grow their market share in order to maintain steady sales output. “Sure, there are fewer buyers,” the automaker says, “but we’ll grab more of them.”

Decreased demand has a tendency to increase competitiveness. Not surprisingly, Subaru anticipated the need to more dramatically increase incentives on the  least-incentivized cars in America as 2017 progressed. Even an in-demand automaker such as Subaru is going to struggle when rival automakers are routinely dropping prices by more than 10 percent.

Thus, according to ALG, Subaru’s average discount per vehicle shot up 63 percent, year-over-year, in June 2017. June was by no means an exception for incentive growth at Subaru. In May, year-over-year incentive spending jumped 59 percent. It was up 45 percent in April, 59 percent in March, 61 percent in February, and 97 percent in January. Year-over-year, Subaru’s average incentive spend per vehicle shot up in each of the last five months of 2016, as well.

Yet at just $1,032 per vehicle, Subaru’s incentives are 71-percent lower than the industry average.

And while the industry’s incentive spending as a percentage of the average transaction price jumped to 11 percent in June 2017, it remained below 4 percent at Subaru, or 65 percent below the industry average. That’s lower than any other major manufacturer. Kia and Nissan both cut prices 15 percent below MSRPs.

Still, it’s not difficult to see why Subaru would need to increase its incentives above $1,000/vehicle for the first time since January.2017 Subaru Forester 20XT Touring - Image: SubaruAside from the new Impreza, Subaru’s fourth-best-selling model in America, Subaru’s other models are currently lacking a degree of freshness.

The top-selling Forester debuted at dealers in fourth-gen form more than three years ago.

The similarly popular Subaru Outback is in its third model year, awaiting a modest 2018 refresh.

The third-ranked Crosstrek will be all-new for 2018 later in July, but the first-gen Crosstrek is more than five years old.

The three-row Subaru Ascent isn’t due until next year.

Striving to maintain a lengthy growth streak — year-over-year volume had increased in 66 consecutive months heading into June — with aging models in a tremendously competitive market undoubtedly required improved discounts. And Subaru did manage to continue the streak, posting a 12-percent jump to 52,057 sales even as the U.S. auto industry, apart from Subaru, declined by more than 3 percent.

A little bit of extra cash on the hood pushed Subaru to its 67th consecutive month of growth in June 2017. A whole lot of cash on the hood at almost every other automaker did not bring to a halt their gradual declines.

[Images: Subaru]

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

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11 Comments on “Subaru Incentives Are Skyrocketing In America, But Remain Absurdly Low By 2017 Standards...”

  • avatar

    “The top-selling Forester debuted at dealers in fourth-gen form more than three years ago.”

    Actually it was more than four years ago; the 2014 Forester began U.S. sales in early spring of 2013.

  • avatar

    Funny this article came up. I noticed the other day that the Subaru dealer near me has banners on their Outbacks advertising hefty multi-thousand dollar discounts. I don’t recall ever seeing that kind of thing before.

  • avatar

    I’ll get all this out of the way early. “Head gaskets fail on the crappy, agricultural engines!”. “CV joint boots crack into shards all the time!”. “The CVT transmissions are weak and prone to disastrous failure!”. “No modern vehicle manufacturer would ever use a flat opposed engine!” “I’ll never have another after the one I owned rusted out from under me (choose 1: 15 years; 20 years; 25 years) ago!”. “The EB engines drink almost as much oil as a BMW! One quart in 3k miles. Disgusting!”. “Standard all wheel drive is unnecessary and buyers are tricked into buying it by fear-mongering commercials!”. And yet, Subaru is still selling lots of vehicles to the “sheeple” without the need for the excessive bribery of high incentives. It’s outrageous, I tell ‘ya.

    • 0 avatar

      My friend replaced his Outback with an Outback. My friend replaced her Forester with a Forester. Both made it to 60,000 miles before needing the $2500 engine repair, in addition to A/C failure, their radio displays dying and heck, even a driver seat coming unwelded. They don’t care. Most people are too lazy to do any car research on their own. This is why garbage CUVs like the Dodge Journey and Jeep Compass are selling better than ever. Offer a body style people want and they’ll flock to it.

      • 0 avatar

        I lucked out – an incompetent oil shop ruined my WRX engine before it had a chance to tear itself apart. Now I just have to explain to everyone why it has a forged engine build because I’m trying to sell it.

    • 0 avatar

      I’ve lurked on this website for a long time but after you listed the litany of typical comments (in jest) that are posted any time a Subaru article appears, I thought I’d finally chime in.

      Long time Subaru “sheeple” here. I’ve owned two H6 Outbacks (Gen 3 and Gen 5 – my current ride), one H4 Outback (Gen 5 – wife’s current ride), and a Forester (Gen 2). When I first met my wife, she was driving a Gen 1 Impreza.

      In all the years we’ve owned Subarus, we’ve had no major, and very few minor issues with any of them. My local Subaru dealer is the best – I know everyone by name and it feels like an episode of Cheers when I need service. Subaru has given me no reason to look elsewhere.

      I will continue to graze like a good sheeple of this fine Subaru grass.

    • 0 avatar

      Back in the day, “sold” about half a dozen Foresters (which is probably the most wagon-like of any crossover) to family members/friends who wanted a (somewhat) reliable AWD vehicle with some utility – and this is knowing the usual problem areas for Subarus.

      Nowadays, while I wouldn’t steer buyers away from Subaru, think there are plenty of different (and more stylish) options.

      Think the demise of Saab has also played a role in Subaru’s growth streak.

    • 0 avatar
      Secret Hi5

      Drove a rental Crosstrek for two days – It felt tinny and cheap.

  • avatar

    Cant go wrong with a $26K BRZ in a manual.

    Except when it snows I guess.

  • avatar

    That’s funny, i’m in the market for a 2017 Subaru Impreza and i’m having a lot of trouble getting a good price. The packaging is pretty terrible for these cars, it’s never in the trim/package you want.

  • avatar

    I will never! buy another Subaru again!!! They don’t honor there warranty! I have maintained my vehicles myself for over 30 years. I have owned 2 wrxs. A 09 tuned and 60,000 miles. No problems. Traded it in for a 13 wrx. All stock, 13000 miles spun a main barring. I had to fight with them to fix it. They told me it was due to oil starvation. 09 eat oil, 13 was not as hungry for it. 35000 miles spun a main again. They would not cover it. Had reciepts for oil even, again they told me oil starvation. Never once did a CEL light go on for low oil. When I had someone else rebuild it they no longer sold the same size oil pump. It was repaced with a larger sized one. They knew there was a issue. They just fixed what was broke not the problem.

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