The Subaru Ascent Is Doing Just What Subaru Expected: Cannibalizing
Operating in a higher price spectrum and with Subaru’s typically tight grip on the incentive account, there’s no telling what the new Ascent is doing for Subaru’s bottom line. But as Subaru conservatively predicted, the Ascent isn’t generating much in the way of greater sales activity inside Subaru showrooms.
Instead, the Ascent is growing Subaru’s volume by the leanest of margins, in part because it’s by no means a segment leader in sales; partly because nearly all of Subaru’s other models are suffering significant sales slowdowns.
Fortunately for Subaru, the Ascent is now selling at the approximate pace Subaru had forecasted. But it appears to be doing so at the expense of other Subarus.
For at least two reasons, this isn’t a poor outcome. First, Subaru expected it and evidently planned for such a development. Second, Subaru needed a vehicle that kept loyal Subaru owners from leaving the brand when the Outback and Forester were deemed to be undersized.
The Ascent has plugged that hole.
It has not, however, slowed the momentum of top-tier rivals. Prime competitors such as the Toyota Highlander and Honda Pilot are both growing at rapid rates in 2018. In a challenging market made more competitive by the addition of the Ascent (and Volkswagen Atlas), sales of that duo are up 24 percent through the first nine months of 2018. As if to clarify the extent to which the Ascent is making no dent in their demand, both of these top-selling, Japanese, American-made, three-row utility vehicles are on track for record annual sales in the United States.
Instead of stealing large quantities of sales from rivals’ large crossovers, the Ascent is making hay off of existing Subaru demand. After going on sale in June, the first full three months of availability produced 14,683 Ascent sales in America (and 16,580 in total to date.) Q3 sales of the Outback, meanwhile, fell 13 percent, while Forester sales were down 3 percent during the same period. Those two crossovers combined for an 8,650-unit decline in the third quarter, negating much of the Ascent’s additional volume.
Although it appears as though the Ascent is distracting Subaru’s existing shoppers, it remains a small player, not just in terms of its place in its segment but also its position in the Subaru lineup. In September, for example, the Forester, Outback, and Crosstrek were all easily twice as popular. The Ascent produced 10 percent of Subaru’s September volume in the new SUV’s best month yet, less than the Impreza but more than the Legacy’s 6-percent slice of the pie.
Likewise, the Ascent doesn’t generate nearly the volume of high-volume competitors. In September, Ford’s Explorer outsold the Ascent by more than three-to-one, the Honda Pilot outsold the Ascent by nearly 10,000 units, and the Toyota Highlander generated nearly quadruple the Ascent’s volume. Even the struggling and outdated Nissan Pathfinder, down 19 percent so far this year, outsold the Ascent, as did the Dodge Durango, Kia Sorento, and Chevrolet Traverse.
The Ascent has nevertheless reached the rate of sales Subaru anticipated, and it did so quickly. Subaru was seeking 60,000 annual U.S. sales, we reported in April 2017, or 5,000 per month. Subaru sold 4,589 Ascents in July, 4,235 in August, and 5,859 in September. Non-Ascent volume at Subaru of America was down 5 percent in Q3.
But one gets the impression, whether it’s based on 82 consecutive months of year-over-year growth or a market share improvement from 1.2 percent in 2007 to 3.8 percent in 2017, that the Ascent hasn’t plateaued yet. Though it may not be true now, Subaru’s recent history suggests it won’t be long before the Ascent is stealing plenty of sales from its high-volume competition.
Kurtamaxxguy on Oct 22, 2018
Both Forester and Outback are at or near end of their product cycles and their sales always drop at those times. Forester is just beginning 2019 model deliveries, Outback revision arrives next year. Revisiting this topic in 6 months will tell whether or not Ascent will continue "cannibalization".
Backtees on Oct 23, 2018
Yes. Highlander did have an actual removable middle section to create a pass through to the third row but the overall interior size including trunk was not in same class. When dealing with my various GM products over the years I’m reminded of one of my favorite Car Talk moments. Many years ago a Lady called and asked if she should buy the extended warranty for her new Astro van. “No, buy two.........one for each side! Hahahaha”
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