Subaru followed a banner 2014 with an even better month to mark the beginning of 2015, and at this rate the automaker could reach its 2020 sales goal about five years early. With the fantastic gains come issues of both practical and aesthetic concerns for Subaru. Here is a look at potential downsides to the company’s exploding U.S. sales.
Another Subaru sales record
Subaru marked its sixth straight year of record U.S. sales at the end of 2014. Among automakers selling into the hundreds of thousands, Subaru stood above the pack with 21% growth over its prior year’s sales. January 2015 showed even stronger gains as Subaru advanced 24% year over year. At this point, the auto manufacturer of parent company Fuji Heavy Industries could hit its goal of 600,000 units sold by 2020 (as told to Automotive News) several years ahead of time.
Reuters reported that Subaru also projects to have a remarkable 14.4% profit margin by the end of the fiscal year closing March 2015. Looking at Subaru’s top selling vehicles, both the Forester (up 15% in 2015) and Outback (up 34% in 2015) are off to hot starts this year, while the Legacy nearly doubled its January 2014 sales total in this year’s inaugural month (Impreza, including WRX models, showed a 30% improvement.) Only sales of the XV Crosstrek were stagnant when surveying the company’s key U.S. products.
What would happen if U.S. consumers continued to turn to the all-wheel-drive lineup that continues to build momentum? It is unclear how quickly Subaru could ramp up production to meet much higher demand.
Subaru’s sales goals were tied to its long-term production capacity. Even at 600,000 annual sales, the automaker could deliver on the demand using a combination of the Indiana plant production and imports from global factories, Subaru president Yasuyuki Yoshinaga told Automotive News in a May 2014 interview. Beyond that number, either U.S. production or import tallies would have to be increased.
Increasing production capacity on the fly would be novel concept for a company that sold around 200,000 cars a year a decade ago, but it may be necessary. Loyalty studies suggest buyers may want to return to Subaru dealers for a new model. In Experian’s study from 2014, Subaru trailed only Ford in automotive brand loyalty.
How much of the uniqueness of the Subaru brand would be changed by more mainstream acceptance? As the only automaker with all-wheel drive coming standard in every vehicle, there are traits that Subaru has been known for, and until recently that included a certain amount of uniqueness and style. Subaru’s latest work doesn’t bode well for the industry in general, and it may be tied to the sizable chunk of the company held by Toyota, the largest shareholder in Fuji Heavy.
In 2008, Toyota increased its 9% share in Fuji Heavy Industries to 16.5%, making it the company’s biggest investor. While the collaboration between the two automakers has produced the Scion FR-S and Subaru BRZ (the brand’s only car that does not feature all-wheel drive), Toyota’s main influence can be felt in the shrinking quirkiness of Subaru models.
The Legacy unveiled at the 2014 Chicago Auto Show and released later in the year hasn’t scored many style points, as it appeared Subaru was on a mission to marry a standard Japanese midsize sedan with a Ford Taurus. The new edition was noticeably blander than the previous Legacy that debuted as a concept in 2009, then hit the market as a stylish entry in the midsize segment.
This production model retained a substantial amount of the sportiness, most notably in the Legacy’s fashion-forward front end, giving it separation from the rest of the pack. Indeed, Subaru seemed to be one of the automakers that put up a challenge to duller midsize rides from Honda and Toyota (and, in its previous-generation Fusion, Ford). In addition to the vanilla-ized Legacy, the feeling of compromise is apparent in the Impreza WRX’s transition from concept to production model.
When the WRX Concept hit the New York Auto Show in 2013, there was reason to expect a home run out of the production model that arrived the following year. The front and 45-degree-angle view tell only part of the story. A comparison in full profile shows the dulling-down of the WRX from concept to production. Here’s the side from the New York debut:
Once this version of the performance ride hit Subaru dealerships, it looked like this in profile:
Call it Corolla-zation.
[Update, 2/10/15: Michael McHale, director of corporate communications for Subaru America, addressed any possible connection between the Toyota stake and Subaru product development. McHale emphasized that Toyota has no involvement in the design process and that Subaru’s status was independent. He elaborated on the automaker’s effort to grow in the U.S. market.
“To reach a wider audience we have improved the overall package of our vehicles — notably, size — to compete head on with the main players,” McHale wrote in an email to Autos Cheat Sheet.]
You could say only the sales scoreboard matters to automakers, but if that were the case then Toyota would have never changed the design of the Camry, the often-criticized yet undisputed sales leader for years in America. For a while, every car on the road seemed to look like a Camry or Accord, a concept Ford played up in a winning ad campaign for the Fusion.
Indeed, a world where Subaru sold in higher volumes could be a more boring automotive world — Toyota’s world, where other automakers just live in it — but it could even leave the company open to attacks from competitors. If production volumes had increased, any downsizing would appear to be a sign of weakness and could affect both Subaru and its largest investor.
For now, everything looks promising for both Japanese brands. If surging sales force Subaru’s hand in the coming years, it will be a problem most companies would be happy to have. Just don’t expect any interesting experiments like the Baja any time soon.