Legacy concept hints at bid for wider market

Legacy concept hints at bid for wider market.

For Subaru, Shared Values Outweigh Market Share

A top executive says the automaker strives to set itself apart as best it can with the resources it has, rather than join the fray near the top of the automotive leader board.

LOS ANGELES – Despite remarkable growth over the past six years, from fewer than 200,000 units sold in the U.S. in 2007 to upwards of 420,000 by year-end and expectations of reaching 500,000 annual sales within two years, Subaru is content to remain the little automaker that could.

Company representatives in both North America and Japan confirm they’re not willing to tool around with Subaru’s strong position in the CUV and compact-sedan segments in hopes of earning wider market share.

“We’re quite happy being a little unique and selling around the numbers we’re selling now, just a few more,” spokesman Michael McHale tells WardsAuto during a design seminar held in conjunction with the Los Angeles auto show.

The unveiling here of the ’15 WRX and the ’15 Legacy Concept, which did away with many of the brand’s signature rally-like characteristics for a more elegant body with potentially greater appeal in the wider market, suggests Subaru may be looking beyond the niche it’s historically cultivated.

Not yet, McHale says, contending that once an automaker decides to go mainstream, it becomes “very appliance-driven…We don’t want to be that.”

Instead, Subaru wants to grow as the brand of choice for what McHale calls “adventure-seekers,” people who enjoy exploring the outdoors, “fishing and hiking and so on…we want to take them on the trail…we’re targeting those guys.”

Those same consumers also tend to be young, idealistic, environmentally minded and appreciative of companies such as Subaru that publicly stand with them in caring about the causes important to them.

The automaker’s current “Love” media campaign is intended to build a connection between Subaru vehicles and the ability they give folks to follow their whims.

While the automaker doesn’t typically offer cash incentives, it currently will make a monetary donation to a customer’s charity of choice when they buy a new car.

So far, says spokesman Dominick Infante, that strikingly novel approach seems to be keeping buyers happy.

Sure, he says, “it’s a different mindset,” but “we think we’re on to something.”

McHale notes there are an estimated 6 million cause-minded U.S. consumers who fit Subaru’s target demographic. So, why, he asks, would the company need to shift its focus away from them?

Infante suggests ongoing problems with production have created the only roadblock between Subaru and its long-term goals.

WardsAuto has reported that even though it will be two years until Subaru’s assembly plant in Lafayette, IN, can boost its capacity significantly, the automaker has managed to speed up line production there and at plants in Japan run by parent company Fuji Heavy Industries.

Thanks to the slumping auto market in Europe, units originally destined for that region have been redirected to the U.S. instead.

The improved pipeline, however, likely won’t spur Subaru toward loftier sales goals.

In fact, Fuji Heavy CEO Yasuyuki Yoshinaga says the automaker, which claims about a 1% share of the global market, plans to keep growing annual sales up to 1 million, then impose a cap.

"It's better if we don't get ourselves stuck in a situation where costs and volumes matter, because bigger companies would have advantages," Yoshinaga tells Reuters at the Tokyo auto show. "We will aim for 1 million vehicles, but not beyond that."

Back in Southern California, Tomohiko Ikeda, former president and CEO of Subaru of America and current chief of global marketing, reiterates the automaker strives to set itself apart as best it can with the resources it has, not join the fray near the top of the automotive leader board.

“Niche means, I don’t think, just small,” Ikeda says. “Niche means very distinctive, different from others.”

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