Having Pulled Off Another Win, Subaru Predicts Yet Another

Steph Willems
by Steph Willems
having pulled off another win subaru predicts yet another

You read on Friday how Subaru exceeded its U.S. sales goal for 2019 by 117 vehicles, pushing its American volume to the highest point in the automaker’s history — up 2.9 percent from 2018, and more than 200 percent greater than its tally just a decade prior. A hard thing to achieve in a market that cooled off in 2019.

Subaru doesn’t see last year as a high water mark, however. For 2020, the brand has even loftier expectations, but everything will have to fall into place for it to happen.

With two shadowy products on the way but not imminent, Subaru will have to rely on boosted production of existing models, two of them revamped for the 2020 model year, as well as improved quality.

Both of these elements are in the process of being fixed, says CEO Tomomi Nakamura, formerly head of Subaru’s American arm. The brand’s head honcho freed up $1 billion to improve quality control after recalls earned it a black eye. Meanwhile, the brand’s wildly low 24-day supply of new vehicles in December will improve through increased output at the automaker’s Japanese and Indiana assembly plants, Automotive News reports.

Speaking at a media event last month, Nakamura said he wants to see an average of 45 days’ worth of new vehicles in 2020, adding that some models, such as the Impreza-based Crosstrek, ended the year with a 12-day supply. The industry average is north of 60, and sometimes even 70.

“We will be revamping our inventory around that number,” he said of the 45-day figure. “We may be able to hit an overall average of 45 days’ supply in the near future.”

Unlike larger automakers, Subaru’s sparse production footprint gives it the unusual ability to quickly unload all of the vehicles it builds. With overall sales on the rise, boosting capacity is a must. Output in Indiana is expected to rise by 30,000 vehicles this year, Nakamura said.

As for product itself, the CEO feels the redesigned Legacy and its wagon sibling, the Outback, will return greater sales in 2020, helping overall volume that received a big boost from the addition of the Ascent midsizer in mid-2018. Sales of the revamped-but-still-true-to-itself Forester also rose in 2019.

So, what’s the expectation for 2020? Volume of 720,ooo to 730,000, apparently.

“There is still growth possibility in the United States,” Nakamura told reporters, adding, “We think it is still possible for us to grow in the U.S. Sunbelt. We think that’s a frontier market for us. But it’s not just the Sunbelt. There is also the Snowbelt, especially the Northeast.”

While buyers in, say, Vermont have certainly adopted Subaru as a preferred brand, consumers in the sunny South have proven a harder nut to crack. There’s great regional differences in brand loyalty in the U.S., with various elements in play — among them, socioeconomic factors, consumer ethnicity, brand image, and weather. Standard full-time all-wheel drive is obviously a bigger draw in areas where there’s good reason to lose traction.

As for those two upcoming models, one is an electric crossover co-developed with Toyota. The other, billed as a global SUV, remains hazy, destined for a segment the automaker hasn’t yet revealed. Whatever the form these vehicles take, they won’t be on sale in 2020.

[Images: Subaru]

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  • Inside Looking Out Inside Looking Out on Jan 06, 2020

    Subaru is best known for super-symmetric AWD.

  • Tankinbeans Tankinbeans on Jan 06, 2020

    I'm confused. Why is having a 24 day supply necessarily a bad thing? Wouldn't this indicate that they've forecasted the demand appropriately, and isn't this how they manage to sell their wares without resorting to incentive spending? Wasn't it just the other day there was the story of incentive spending and Subaru was at the bottom of the back with something like $1,500 per car? Couldn't more manufacturers learn from Subaru, the relative quality or lack thereof being an entirely separate issue? I'm genuinely curious.

    • ToolGuy ToolGuy on Jan 07, 2020

      60 days' supply has been the long-term target/rule of thumb for the U.S. market (and more recently probably more like 70). Going significantly over this number (usually because of poor sales) is a very bad thing - it ties up capital, and nothing good happens to vehicles that sit for too long (ex. flat spots on the tires, 12V battery deterioration). Lower days' supply sounds like a good thing. But when you are down to 12 days of Crosstrek inventory, you are losing sales. Remember that the days' supply figure is an average - the inventory is at >600 U.S. Subaru dealers. So if I want a Crosstrek and you don't have one, or if I really want a Limited and all you have are Base CVT models, or if I'm shopping for a Premium Manual, you see the issue. Not to mention options - and body color, which is huge for some buyers. If I order exactly the Crosstrek I want, it has to be shipped from Gunma. Shoving me into a model that I don't want, or persuading me to get a color or a trim that doesn't fit my long-term needs, results in an immediate sale for the dealer, but doesn't do Subaru and me any favors in the long term. (All of this might make you wonder if there would be better [and less expensive] models for vehicle ordering and distribution in the U.S. market. Other places use different methods.)

  • Nrd515 I bought an '88 S10 Blazer with the 4.3. We had it 4 years and put just about 48K on it with a bunch of trips to Nebraska and S. Dakota to see relatives. It had a couple of minor issues when new, a piece of trim fell off the first day, and it had a seriously big oil leak soon after we got it. The amazinly tiny starter failed at about 40K, it was fixed under some sort of secret warranty and we got a new Silverado as a loaner. Other than that, and a couple of tires that blew when I ran over some junk on the road, it was a rock. I hated the dash instrumentation, and being built like a gorilla, it was about an inch and a half too narrow for my giant shoulders, but it drove fine, and was my second most trouble free vehicle ever, only beaten by my '82 K5 Blazer, which had zero issues for nearly 50K miles. We sold the S10 to a friend, who had it over 20 years and over 400,000 miles on the original short block! It had a couple of transmissions, a couple of valve jobs, a rear end rebuild at 300K, was stolen and vandalized twice, cut open like a tin can when a diabetic truck driver passed out(We were all impressed at the lack of rust inside the rear quarters at almost 10 years old, and it just went on and on. Ziebart did a good job on that Blazer. All three of his sons learned to drive in it, and it was only sent to the boneyard when the area above the windshield had rusted to the point it was like taking a shower when it rained. He now has a Jeep that he's put a ton of money into. He says he misses the S10's reliablity a lot these days, the Jeep is in the shop a lot.
  • Jeff S Most densely populated areas have emission testing and removing catalytic converters and altering pollution devices will cause your vehicle to fail emission testing which could effect renewing license plates. In less populated areas where emission testing is not done there would probably not be any legal consequences and the converter could either be removed or gutted both without having to buy specific parts for bypassing emissions. Tampering with emission systems would make it harder to resell a vehicle but if you plan on keeping the vehicle and literally running it till the wheels fall off there is not much that can be done if there is no emission testing. I did have a cat removed on a car long before mandatory emission testing and it did get better mpgs and it ran better. Also had a cat gutted on my S-10 which was close to 20 years old which increased performance and efficiency but that was in a state that did not require emission testing just that reformulated gas be sold during the Summer months. I would probably not do it again because after market converters are not that expensive on older S-10s compared to many of the newer vehicles. On newer vehicles it can effect other systems that are related to the operating and the running of the vehicle. A little harder to defeat pollution devices on newer vehicles with all the systems run by microprocessors but if someone wants to do it they can. This law could be addressing the modified diesels that are made into coal rollers just as much as the gasoline powered vehicles with cats. You probably will still be able to buy equipment that would modify the performance of a vehicles as long as the emission equipment is not altered.
  • ToolGuy I wonder if Vin Diesel requires DEF.(Does he have issues with Sulfur in concentrations above 15ppm?)
  • ToolGuy Presented for discussion: https://xroads.virginia.edu/~Hyper2/thoreau/civil.html
  • Kevin Ford can do what it's always done. Offer buyouts to retirement age employees, and transfers to operating facilities to those who aren't retirement age. Plus, the transition to electric isn't going to be a finger snap one time event. It's going to occur over a few model years. What's a more interesting question is: Where will today's youth find jobs in the auto industry given the lower employment levels?
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