XV Crosstrek strong seller for Subaru in US

XV Crosstrek strong seller for Subaru in U.S.

Subaru Flirting With a Half-Million Units; More Sunbelt Growth Key

The Japanese brand has seen one of the sharpest ascents in recent automotive sales history, and plans to reach even higher in coming years.

REYKJAVIK – What a difference six years makes for Subaru of America.

In 2007, sales fell short of 200,000 units in the U.S. But already this year, the brand has delivered a record 347,890 vehicles through October, up 28.1% over like-2012 and one of the largest volume increases in the U.S. light-vehicle market this year.

After changing its volume goal for 2013 three times, from 360,000 units to 385,000 to 400,000, the automaker now expects to tally 418,000-420,000 deliveries.

And that growth pace won't end after this year comes to a close, says a top brand official.

"I think it's very conceivable we will sell 500,000 vehicles in the near future," Bill Cyphers, senior vice president-sales for Subaru of America, tells WardsAuto here during an XV Crosstrek Hybrid media backgrounder.

Cyphers doesn’t get specific about when that mark may be reached or reveal next year's U.S. target, but most of the factors that enabled Subaru's gains in recent years should still be in play in 2014.

While its Lafayette, IN, plant remains two years away from a significant hike in capacity, Subaru has been able to increase line speed there and at parent Fuji Heavy Industries’ Japanese plants to meet growing demand.

And the brand in the U.S. has been the beneficiary of a slumping market in Europe, with some production normally bound for that region diverted to North America.

Cyphers says new products and a strong dealer body deserve most of the credit for Subaru's near-doubling of U.S. sales since 2009.

There now are three Subaru model lines that sell more than 10,000 units per month: the D-segment Legacy sedan and Outback wagon; the Forester midsize CUV; and the C-segment Impreza and Impreza-based WRX, STi and XV Crosstrek models.

Helping to drive sales, Cyphers says, is Subaru’s consistent performance in third-party quality surveys, such as the annual Consumer Reports reliability survey, which recently ranked the Forester No.1.

Subaru also places among the best in dealer surveys, ranking No.1 in the National Automobile Dealer Assn.'s most recent dealer-satisfaction survey.

"When the dealers tell you it's product they can sell…well, they don't tell you that very often," says spokesman Michael McHale.

The recession was good for Subaru in that it was able to attract dealers who lost franchises, mainly those once selling former General Motors brands.

"With the closing of Saturn and Hummer, we picked up some wonderful dealers through the South," Cyphers says, adding Subaru has turned over 25% of its 600-store U.S. dealer body in the past five years, with some underperforming retailers choosing to bow out.

New dealers are more aggressive, he says, pointing to another reason for Subaru's recent success.

Yet, the brand’s market penetration in the Sunbelt region remains relatively wanting and is a focal point of Cyphers' attention.

For instance, while Subaru has increased the share of its sales that come from the region that includes California, Arizona, Texas and Florida, from 12% to 18%, other brands typically make about 40% of their U.S. deliveries there.

"There's room for us to do a much better job in the Sunbelt," he says.

Subaru’s buyer demographic remains centered on active, well-educated persons, but more and more customers are coming to the brand for the first time.

"This year almost 60% of the people buying our cars are new to the Subaru brand," Cyphers says, a level not seen previously. Most are coming from Toyota, Honda and Ford, he says.

WardsAuto data shows sales for all three brands are up through October, although market share is flat year-to-year for Toyota and Honda.

Subaru's U.S. market share in the period has risen a half-point to 2.9% from like-2012.

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TAGS: Dealers Retail
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