Subaru Plots Follow-Up of 2009 Success
By Michelle Krebs January 12, 2010It was a great year in 2009 for Subaru of America Inc.: a new all-time sales record of 216,652 
units. And Subaru plans to keep it that way, avoiding sales peaks-and-valleys of the past.
Thomas J. Doll, Subaru of America Inc. executive vice president and COO, told AutoObserver at the Detroit auto show here that Subaru now is a better-placed, more-established brand than it was when it set sales records in the past.
In effect, Doll said Subaru's now a strong enough brand to sustain its plump new sales levels. And improve, even.
"We're kind of at the beginning of what this franchise is capable of doing," he said.
Doll said Subaru has been fortifying its brand image ever since the early '90s decision to sell vehicles only with all-wheel drive. The AWD feature over the years has become Subaru's signature. That and an enduring and consistently reinforced marketing message, he said.
"We're true to who we are."
Connecting With Customers
Doll points to the fact that although consideration could be better, when Subaru gets customers through the showroom doors and into a car, the battle is won. He claims Subaru now has one of the highest closing ratios in the industry. And dealers -- around 95 percent are profitable -- are no longer selling Subarus on price, but on low-key prestige.
"We're trying to change the whole way we approach selling a car," he said.
Doll's assertion about Subaru selling the car and not the deal are backed up by Total Cost of Incentives data from Edmunds.com, which shows Subaru with one of the lowest average TCI outlays in the industry during its record-breaking sales year.
Dealers still are clamoring for cars, he says, a lingering effect from the late-summer Cash for Clunkers program that was prosperous for Subaru but left depleted inventory the company still is rebuilding, Doll said -- even slow sellers like the Tribeca crossover.
Dealers are asking even for more Tribecas, a model that has never really resonated with Subaru buyers, even after a quick lift of the original's criticized face. Even Tribecas are in short supply, Doll said, because the Subaru of Indiana Automotive plant in Lafayette, Indiana, that makes the Tribeca is cranking full-out to produce it and the more-popular Legacy and Outback models also assembled at SIA.
Subaru has made the decision to skew production toward the Legacy and Outback, he said. "The Outback makes more money."
Moving Onward, Upward
Subaru plans to sell more. How many more, Doll's not saying.
"There is a [sales-target] number," he admits. "We want to at least grow incrementally every year."
How will Subaru build on its new record sales? Look out Honda and other big-volume players.
Doll points to the Honda Accord's dominating 8- or 9-to-1 sales rate over the Legacy as a ratio ripe for picking. He said as industry sales volumes begin to return in coming years, Subaru will have the opportunity to leverage its strong brand attributes to conquest buyers from bigger brands that may have less focus.
And yes, Subaru does have a hybrid coming, he reminds, in 2012.
Doll agrees Subaru buyers are hungry for the brand to offer a hybrid and Subaru is reasonably certain of success because it will be one of the few AWD hybrids available. The hybrid will not leverage part-owner Toyota Motor Corp.'s long experience developing its Hybrid Synergy Drive because the design cannot accommodate Subaru's horizontally opposed engine design. -- Bill Visnic, Senior Editor
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