Subaru success garners attention for solid sales
Subaru of America has droves of new U.S. car buyers pledging allegiance to a new blue oval.
The builder of sensible and capable all-wheel-drive crossovers and SUVs posted its 81st-consecutive month of year-over-year sales increases in August. Call it luck. Call it foresight. Call it the fruit of years of clever marketing campaigns in the States.
But analysts and company officials agree: The little automaker from Japan is growing a presence in the U.S. that has much-larger competitors such as Ford Motor Co., General Motors Co. and others taking note.
Subaru bucked the industrywide sales plateau by moving 5.3 percent more vehicles off U.S. dealer lots through the first eight months of the year. Its lineup is flush with the all-wheel-drive crossovers and SUVs that U.S. buyers want.
Ford is cutting sedans from its lineup and transitioning some nameplates to crossover-style vehicles akin to the Subaru Outback. GM is launching even more crossovers in the immediate future. Fiat Chrysler Automobiles is focused on its Jeep brand's crossovers and SUVs.
But Subaru built crossovers before there was a name for them, and its Outback and Forester helped the company grow, even as the market shifted away from its Impreza and Legacy sedans.
"The potential was always there," said Jeff Walters, senior vice president of sales for Subaru of America. "We might not be best at any one thing, but we offer just one heck of a complete package."
Subaru sold just 187,208 vehicles in the U.S. in 2008. Ten years ago, dealers and analysts might have scoffed if anyone had said Subaru would break 200,000, according to Sam Slaughter, owner of Sellers Auto Group in Farmington Hills.
By 2017, Subaru sold more than triple that number: 647,956. That's far fewer than the 2.1 million sold by Fiat Chrysler Automobiles, 2.6 million sold by Ford and 3 million sold by GM. But Subaru bested such competitors as Volkswagen, Kia and Mazda.
Slaughter said he's poaching customers of the American brands in the heart of Detroit Three country. Attribute that to having the right product at the right time, and building vehicles that emphasize safety and capability above all else, experts say.
"There's no question that Subaru's been far ahead of it," Slaughter said. He opened his dealership five years ago. "We see a lot of trade-ins from Ford and the other imports. A lot of people are trading out of sedans into a crossover or small SUV."
The product is only part of the story, though.
"If you're going to be fair, one other component that was really important to this was the branding," Walters said.
Starting in the 1990s, the carmaker began running ads targeted at a demographic largely ignored by other carmakers: the LGBT community. In the early 2000s, the automaker worked with an ad agency to market directly to gay and lesbian buyers, which distinguished the company as a gay-friendly automaker.
What followed were ads with Subarus wearing "Xena LVR" license plates, a wink to "Xena: Warrior Princess," a TV series with a huge lesbian fanbase.
The automaker ran ads with taglines like "Get out. And stay out." That was a nod to two of Subaru's target groups: the rugged, outdoorsy types who were drawn to the brand by images of kayaks and mountain bikes on Subaru roof racks — and those who might come out as gay.
The automaker is also populated its ads with dogs, yet another nod to an active lifestyle.
But it was the popular "Love" campaign launched a decade ago that really broadened the brand's appeal, Walters said. The ads — "Love. It's what makes a Subaru, a Subaru." — helped bring a more mainstream swath of people into showrooms.
"'Love' was the branding campaign that really broke through the clutter and appealed to a lot of people," he said. "It pushed us forward."
Subaru's real success in the U.S. gained momentum in 2008 when the company transformed the Forester from a traditional wagon to a larger crossover. It immediately appealed to U.S. customers who wanted more room for family and gear.
Subaru's new three-row SUV, the Ascent, is on lots, and its fifth-generation Forester arrives later this month. Next summer, the automaker will bring out a redesigned Outback crossover and Legacy sedan.
The carmaker's focused product lineup, tight budget, product cadence, messaging and business plan might be enviable for those at Ford, a company in the midst of a vast restructuring and cost-cutting gambit, according to Ivan Drury, an analyst with California-based Edmunds.com.
"They went full throttle," Drury said. "They're a very disciplined brand. They're not going and trying to be all things for everyone. The market for them was there, but really the rest of it shifted when people got out of cars in the same direction Subaru was already going."
Rebecca Lindland, an analyst with Kelley Blue Book, said the automaker has gained momentum on the backs of its products' durability, reliability and safety.
The growth the brand is seeing stateside could continue "unabated at this point," Lindland said. "Production constraint or tariffs are the biggest threat to their success."
For now, the 630 U.S. Subaru dealerships are trying to keep up the tempo. And company leadership is planning its next moves in the United States. That doesn't include cutting out cars.
"We have the opportunity to kind of decide where we want to do battle in the marketplace," Walters said. "We think as long as we've got the best product, we'll be able to take care of business."