By John Voelcker
Subaru has had a remarkable run lately. In the face of plummeting U.S. auto sales, they were the only maker aside from MINI to sell more cars in 2008 than the year before. The 2009 Subaru Forester got rave reviews in magazines from Motor Trend to Consumer Reports, and its sales are at record levels. Before the unveiling of the 2010 Subaru Outback (above) and 2010 Subaru Legacy, we sat down with Tom Doll, EVP and chief operating officer of Subaru of America, and Michael McHale, corporate communications director, to ask what they’re doing right.
What features of the 2009 Subaru Forester made it so successful, and is it bringing new owners into Subaru?
Tom Doll: It’s a combination of good styling and the price repositioning that we did a couple of years ago. The Forester starts at $19,995, and the upgrades come in reasonable steps beyond that. And all-wheel-drive is standard, not an extra.. Plus, when Motor Trend named the 2010 Subaru Forester as their SUV of the Year, they called it “the right vehicle for our times”—which I think says it well.
Michael McHale: Because it indexed very well in Consumer Reports, we’re seeing converts from Honda and Toyota, which are by far the biggest brands in that category.
What fundamentals helped Subaru post sales gains while everyone else is tanking?
Doll: We realized three years ago we had to get better on the price-value equation. We have good prices and reasonable step-ups to trim levels now. The Impreza starts at $16,995, for instance, and we cut the base price of the 2009 Subaru Forester by $1,200 when we launched it. We also focused on communicating better with dealers, and we’ve gone from 28th place in dealer communications to second place last year, just after Lexus.
McHale: We give dealers a good product they can sell, and they’re realizing what a jewel they have. We really think our cars are the best-kept secret in the industry. We have the second best residual value, great crash-test scores from the Insurance Institute for Highway Safety, superior Consumer Reports ratings. They’re reliable, they’re durable, they last a long time, and we have high owner retention. Our cars just don’t create problems for dealers.
Will the 2010 Subaru Legacy sedan compete with the Toyota Camry, Honda Accord, and Chevrolet Malibu, and if not, what’s its niche?
Doll: Our sedan buyer doesn’t cross-shop Camry or Malibu. Subaru is a different car, for buyers who want a satisfying driving experience. Being different appeals to our buyers. They’re about what a car can do for you versus what it says about you—and they want more than just basic transportation.
McHale: With the 2010 Subaru Legacy, we’re focusing on getting more people into the sedan. If I had to name names, I’d say we’ll get conquests from the more “interesting” sedan brands: the Nissan Altima, the Volkswagen Passat, maybe even the lower end of the Infiniti line. So we’re an alternate choice in a traditional segment.
How do you create a brand strategy around audiences as diverse as fast ’n’ furious tuners, rock climbers and spelunkers, and lesbians and gay men?
Doll: People just love our cars. That’s where the ad campaign came from: “Love is what makes a Subaru a Subaru.” Our owners—rock-climbers, kayakers, gays and lesbians—are very passionate people. And they’re passionate about their cars. We have the highest rate of owner recommendations of any brand in the market.
McHale: But, truthfully, the imagery has been a bit of a challenge.
You’ve done well so far this year, but what are you most scared of—what keeps you up at night?
Doll: Honestly, it’s not the cars. It’s the economy, consumer confidence, that ability for buyers to get loans. Our finance arm, Subaru Motors Finance, is a huge help right now. We can write leases, and we expect to do more of that for the Subaru Legacy. Outback buyers often pay cash; they’re affluent, understated, and solid. They could afford a lot more car, but they choose an Outback. We hardly write any leases for the Outback.
McHale: Right now, we have our highest market share on record, almost 2 percent of the US market. Maybe I’m not as scared as I should be, but I really think we’re the secret that no one knows about. And buyers are starting to recognize that; we’re starting to get noticed.
Subaru COO Tom Doll and Mike McHale