By on July 10, 2018

Image: Subaru

To think of the Subaru brand is to think of the misty Pacific Northwest, the shimmering peaks of the Rockies, or the pastoral farms and rolling hills of New England. This is Subaru Country — where farmer’s markets and mountain biking awaits.

Well, Subaru head office wants to put an end to regional popularity, rolling out a five-year plan that targets the American South in a bid to boost North American sales by 20 percent.

Freshly minted Subaru President Tomomi Nakamura announced the automaker’s strategy (“STEP”) in Tokyo this week. While some of the initiatives involve rebuilding trust in its home market — where a vehicle inspection controversy devoured some of the public’s goodwill towards the brand — the rest are all about sales, sales, sales. Subaru’s aiming for an 18 percent increase in global sales over the time frame, with the U.S. playing a big role.

Subaru’s five-year window doesn’t start immediately; this newest planning period closes March 31st, 2026.

“The automotive industry is now in a tumultuous time. Subaru’s fast growth in recent years has come to highlight our challenges,” Nakamura said, as reported by Automotive News. “The question is how we, as a small-scale company, will be able to survive in this big-changing area.”

Besides bulking up its sales, Subaru plans to belatedly boost its investment in electrification. While the automaker plans to return a hybrid Crosstrek to the market for 2019, a couple of years after the previous, non plug-in version kicked the bucket, it was only made possible by a partnership with hybrid-heavy Toyota. A second Subaru hybrid should appear in the early 2020s, with an electric vehicle bowing in 2021.

2019 Subaru Ascent

At the same time, Subaru plans to tap into the rising thirst for SUVs. A dedicated “global strategic SUV” should launch around the same time as the aforementioned hybrid, apparently supplementing the new-for-2018 Ascent three-row crossover. Meanwhile, expect bolder styling. STI models will become extra fearsome. A cash infusion of $1.36 billion will target quality improvements.

“The quality of our company has failed to keep pace with our quantitative growth so far,” Nakamura said. “We will focus on improving the quality so that qualitative growth will outpace quantitative growth. That’s how I see growth as a brand.”

As for the brand’s Southern product PR plan, few details exist. But making inroads in that market is absolutely key for its global sales goals — North America counts for more than two-thirds of Subaru’s volume. Currently, the brand enjoys a market share of 3.7 percent, but Nakamura wants to ratchet that figure up to 5 percent by 2026. That means a volume of 920,000 vehicles.

The last fiscal year saw 671,000 vehicles sold in North America, with 770,000 estimated for the current year. The old five-year plan pegged 800,000 vehicles by early 2021.

Unlike some targets floated by rival automakers in recent years, Subaru’s uninterrupted North American sales climb over the past decade makes this plan seem doable. Sales rose 5.9 percent in the U.S. over the first half of 2018.

[Images: Subaru]

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63 Comments on “Subaru’s Short-term Plan? Invade the South, Capture Hearts...”


  • avatar
    Cactuar

    “The quality of our company has failed to keep pace with our quantitative growth so far,” Nakamura said. “We will focus on improving the quality so that qualitative growth will outpace quantitative growth. That’s how I see growth as a brand.”

    What does “the quality of our company” mean in non-corporate terms!?

    • 0 avatar
      gmichaelj

      “the quality of our company”

      I’m going to guess he means a lack of Management sophistication – Growing so fast they have trouble keeping up with the basics, like hiring the right people, coordinating production schedules, etc.

  • avatar
    Sub-600

    Well, let’s see, they’ve got dogs and blind drifters covered. Families who survive head-on collisions with 240 ton locomotive engines, check that one too. The coexist crowd is onboard. Now the South, that’s an interesting market. A NASCAR tie-in would be ideal but probably out of the question. Maybe a huntin’, fishin’, or noodlin’ angle? Imagine a heart warming tv spot in which a dad teaches his boy to land a catfish with his bare hands. The Subaru pulls up to the trailer and the boy, bursting with pride, opens the hatch and shows momma his catch. Those cars will sell like crawdads.

    • 0 avatar
      Lie2me

      “The Subaru pulls up to the trailer and the boy, bursting with pride, opens the hatch and shows momma his catch.”

      Are you trying to sell Subarus or old Camaros?

    • 0 avatar
      tallguy130

      Please god let them make a noodlin’ ad.

    • 0 avatar
      Art Vandelay

      Be careful, we once had an EIC get in hot water here for playing up certain other stereotypes with respect to Subaru drivers.

      In all seriousness though, it isn’t that far fetched. I live in Alabama and I see plenty of them but if they did some ads that played up the AWD showing it getting a hunter to their off the beaten path deer stand it couldn’t hurt. Not sure how that would sit with their core demographic however.

  • avatar
    bking12762

    Subaru no longer has the monopoly on dogs. M-B has invaded their territory with dog ads. https://www.youtube.com/watch?v=Mgry-gEexrA

  • avatar
    TNJed

    This all sounds like code for moving away from small and quirky to bloated and bland.

    • 0 avatar
      Art Vandelay

      That ship sailed sometime ago sadly.

      • 0 avatar
        TwoBelugas

        The ship has DEFINITELY sailed.

        I remember in the early 2000s there were ads bragging the Legacy was more fuel efficient than the Ford Explorer. That was about the time the ship left the port I think.

        • 0 avatar
          bullnuke

          And the Legacy continues to be more fuel efficient than a Ford Explorer in 2018. The ship apparently still sails today…

          • 0 avatar
            TwoBelugas

            You may recall if you were around then, in the early 2000s the Explorer was a body on frame truck based SUV.

            The Legacy wagon of today is a bloated as heck. If you can live with the H4 and CVT just to get the MPGs, well, go for it.

          • 0 avatar
            bullnuke

            I have two Legacy wagons (or “Outback”, in the US market), as a matter of fact. The 4-cyl engines do fine in both, one with a CVT @ 126k miles, one with a 6-MT @ 37k miles, and both run very well. They have not bloated into LEO vehicles as the Ford Explorer has and I am able to drive either one with windows full up without gasping from carbon monoxide leaks.

          • 0 avatar
            Art Vandelay

            If terminally under powered rigs are your thing, by all means grab a Subaru. They have other redeeming traits, but things like acceleration and fun to drive aren’t there unless you get a WRX or STI (Yes the BRZ is there, but the stuff that makes it good is Toyota and it isn’t your typical Subaru). And at the WRX/STI price there are better choices that don’t look like I drove through a Pep Boys in the 90’s as a bonus.

    • 0 avatar
      darex

      Subaru hasn’t been edgy or quirky since the 80’s (e.g. XT). They are one of the blandest, most boring brands around, with one of the worst esthetics of all brands. They used to have presence; now they have absence.

  • avatar
    ernest

    My only question is where Subaru is going to get the plant capacity? @ 770,000 units (target) they’re absolutely maxed out.

    • 0 avatar
      Lie2me

      This, I was under the impression that Subaru was having a hard time keeping up with demand now without looking for new business

      • 0 avatar
        gtem

        I toured the Lafayette plant right as they were tooling up for Ascent production, after having added the Impreza line not that long before that. They’re on a big chunk of land out there, I suppose they could just expand even further. What I wonder about is whether they’d consider bringing over engine and transmission production from Japan, and/or bringing Forester production here. Given how good Subaru is at parts sharing between their platforms (engines/trans/suspension/subframes) I can’t imagine it’d be that big of a stretch to bring the Forester state-side. Lafayette is a good location for them with good access to interstate networks, and coil steel from Northwestern Indiana.

  • avatar
    Steve_S

    Perhaps confederate flag roof decals or MAGA stickers pre-installed?

    In all seriousness other than a full-size truck or Wrangler there probably isn’t anything the south would want.

    • 0 avatar
      brettc

      They could continue to offer the orange paint colour with welded shut doors, no side windows and an “01” on the doors.

      • 0 avatar
        Yankee

        When I saw the orange car pictured and the headline, that’s the first thing that came to my mind. Although I would pass on welding the doors shut; with American obesity rates hitting over 35 percent in 2015 with a disproportionate share in the south, I don’t think a modern day Duke boy could slide in like that anymore.

  • avatar
    SCE to AUX

    Maybe I’ll consider a Subaru when the electric one arrives in 2021.

  • avatar
    FreedMike

    Joke if you want to about the south, but there’s plenty of dog-loving, safety-conscious, “politically engaged” folks down there in the major cities. In theory, they could just market more heavily to them.

    But Subaru’s problem is more basic. Their killer app – AWD – does nothing but add cost in a place where winter weather isn’t a problem.

    • 0 avatar
      spookiness

      But people buy it anyway. One of Subarus greatest marketing coups is convincing the avg person that you need AWD to drive in the rain. Anything else is a risk to your children or your dog or whatever.

      • 0 avatar
        FreedMike

        And what spookiness is talking about makes some sense in the places where Subaru is traditionally strong (New England, Colorado, Utah, etc) – you certainly don’t *need* AWD here, but speaking as someone who lives in Colorado, I wouldn’t turn it down.

        Down south, though, it’s not even a “nice to have,” and I doubt people are going to pay more for a vehicle that has it.

    • 0 avatar
      Sub-600

      I actually have several relatives in the South and two relatives who own Subarus. I do not, as far as I know, have any who catch fish their hands. You’re right, AWD is a tough sell down there.

    • 0 avatar
      brettc

      I dunno, every time they get ice or a couple inches of snow down there winter weather seems to be a problem. Of course all-seasons on ice with AWD won’t do anything positive, but the Southern buyers will figure that out *after* they sign up for their shiny new Slowbaru.

      • 0 avatar
        Sub-600

        My sister-in-law in NC says an inch of snow immobilizes the town she’s in. Same thing for my sister in AZ, it only happens like once every ten years but people freak out, lots of fender benders.

    • 0 avatar
      Daniel J

      I live in N. Alabama and we do get snow and ice on occasion. We were all about the Crosstrek until we drove it and it was dog slow. Ended up with CX-5

    • 0 avatar
      Dave M.

      My Outback is a tremendous little beast in our torrential downpours. I’ll never do without AWD again if I can help it. It was also fun in our first ‘dusting of snow’ in 8 years.

      And it does well getting to off-the-beaten-path bike trails.

    • 0 avatar
      gtem

      I’ve seen some people use them in the OBX to drive on the beach, with a mixed record of success. The Crosstrek I pulled out of the sand about 50 yards from the ramp had totally smoked its clutch. The guy had aired down and still had clearance, just not enough torque/gearing to get going once he bogged down. My brother’s friend in Ashville NC (walking stereotype of the active mountain biking young person marketing types salivate over) had a bug-eye WRX wagon he ripped around the Blue Ridge Parkway in, perfect car for that. His family car is now a current gen Forester XT.

      • 0 avatar
        Pete Zaitcev

        Indeed, people really underestimate the need for low gearing for driving off-road. I think it’s more important than live axles or frame. Another medium that is similar to sand in this regard is snow. You stop, you stuck. The new Crosstrek is slightly better than the old one, 1:16.96 total ratio. Still, one needs at least 1:22 with that engine. You could get with less with a turbo or diesel.

        • 0 avatar
          gtem

          My brother’s friend with a stick shift Forester got into a similar pickle driving through some heavy wet snow up a service road last winter. Both on the same General Altimax Arctic snow tires, my brother was in his Grand Vitara XL7 (2.7L V6, 5spd, part time 4wd).

          youtu.be/ZuooEAOD2qE?t=572

    • 0 avatar
      spookiness

      FWIW in my southern-ish home area, the local Subaru dealer is a sponsor of the locally produced huntin’ & fishin’ outdoors show. I say that car/truck/SUV marketing is not different from say, a Viking stove. Its more about the fantasy of what you wish you were doing with it than the reality of what you use it for.

  • avatar
    "scarey"

    “Maybe I’ll consider a Subaru when the electric one arrives in 2021.”-Somehow I think that you are not their Southern target demographic.

  • avatar
    sportyaccordy

    As a native NYCer and a current resident of the SE, I cannot think of a brand + image more incongruous with the South than Subaru. They need to stop running away from electrification and double down on their core market.

    Only way I could possibly see them growing in the south… and I hate to sound like a teenage armchair auto exec…. is maybe by going big with something like a Subaru Stinger. That and a legit off roader. Those are pretty much the only ways I see them making inroads down here.

  • avatar
    Peter Gazis

    Just put a Blue Oval on the front, bed in the back, and the vehicles will sell really well.

    • 0 avatar
      Wheatridger

      That’s funny! My daughter, who lives near Seattle, wanted a Subaru, with dogs and love included. But I influenced her to buy a truly green, Earth-savin’ Ford C-Max Hybrid. So she ordered Subaru logo stickers in just the right size and covered over those blue ovals front and rear with those Subie stars.

  • avatar
    cicero1

    “North America counts for more than two-thirds of Subaru’s volume” Subaru has No pickups, minivans or large cars, but lots of wagons and crossovers. FCA has plenty of pickups, minivans and SUVs, no wagons, and limited crossovers. Where is the guy from Turin on merging. Seems Subaru will need a new factory with these expansion plans – why not use and under-utilized FCA facility.

  • avatar
    jmiller417

    They could always bring back this theme song. Must’ve been effective on some level, because I still find myself humming it sometimes decades later.

  • avatar

    I like Subaru’s, I own a 2012 Legacy GT wagon but To buy another one I want to see new engines. The company has been regurgitating the same power plants for years and they are poor on power and economy these days. The direct injected turbo 2 litre isn’t bad but the high power version (300hp, 300lb-ft) is Japan only.

  • avatar
    Stanley Steamer

    If the 2.0 turbo diesel can be modified to roll coal then they have a chance.

  • avatar
    Art Vandelay

    Honestly my first thought here was more “Toyotazation” Maybe some Subaru badged RAV-4. Also, is the Tundra plant at capacity? It is way outside of the brand’s core values so to speak, but a Subaru badged Tundra would likely sell in higher numbers than many of their models down here…the question would be at the cost of who?

  • avatar
    TW5

    The South is an easy market for them to gain marketshare. Life is relatively easy down here so people have vacation homes off the beaten path, plus the population density is lower and plenty of people have relatives in the boonies.

    Subaru will probably be keen to take on the light truck marketplace by touting fuel economy and safety, but they should continue aiming for car drivers. People in the South aren’t going to give up their trucks or their BoF SUVs. They will give up the family car for something with comparable gas mileage that allows them to fish, hunt, or navigate unmaintained county roads on the way to grandma’s house.

    • 0 avatar
      FreedMike

      I think you hit on the grand plan, which is probably to do some kind of light truck based on a CUV, like a Ridgeline (not some bizarro Baja or BRAT type vehicle). That’d sell in the south, and I predict they wouldn’t be able to keep them on the lots in their more traditional markets.

      • 0 avatar
        Art Vandelay

        I don’t know Mike. The Ridgeline isn’t a huge seller so you are slicing up a pretty small piece of the pie. I still say take a Tundra, add the safety goodies and Subaru badges and call it good. It would likely sell more and would certainly be more profitable per sale.

    • 0 avatar
      Art Vandelay

      Are any of their vehicles class leading with respect to fuel economy? I mean they have their merits but no hybrids, no electrics, and an aging fleet of motors make me think fuel economy probably isn’t tip top. I could be wrong.

      • 0 avatar
        bullnuke

        If compared to vehicles optioned with the AWD, Subaru mpg is equal to or better than competitors in class and better than some with FWD.

        • 0 avatar
          Art Vandelay

          Nice. I drove a WRX and an STI in my recent shopping. They were fun but with respect to the power delivery they were throwback (like nothing…nothing…And there is the turbo). I liked that but money wise there were so many options there and I went another direction. I do wish you could get that powertrain without all of the body kit.

  • avatar
    Rengaw

    I consider myself a car enthusiast, and I am most enthusiastic driving my underpowered four cylinder Subie over rough roads at a brisk pace appreciating that high ground clearance and long travel suspension.

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