Subaru Formula Wins Big In U.S., But Is Neglected In Europe.
“Subaru in the U.S. is a triumph of targeted marketing as much as it is a triumph of good and relevant products in its portfolio”
Subaru is a minnow in Europe, but in the U.S. it has been so successful it outsold mighty Volkswagen by nearly two to one in 2018.
Subaru’s market share in the U.S. has been driven ever higher – from 0.9% or sales of 133,783 in 1997 to last year’s 3.92% and 680,135 sales, according to carsalesbase.com. VW brand sales hit just over 354,000. Meanwhile in Europe, with more or less the same mainly all-four-wheel drive models, market share slid from a measly 0.34% and 45,893 sales in 1997 to a pipsqueak 0.9% and 36,688 sales in 2018.
To European and American eyes, the styling of the range of SUVs and sedans appears modest, worthy and understated. The message of safety and reliability is the same.
Last year Subaru, owned by Fuji Heavy Industries, sold 1.01 million cars and SUVs a 5% fall on 2017, according to France’s Inovev consultancy. The U.S. is its largest market with just under 70% of sales, Japan is second at 15% and Europe accounts for under 3%. Subaru’s best selling models in 2018 were the Forester (246,000), Outback 208,000, XV 194,000 and Impreza 153,000, according to Inovev.
Ed Kim, vice-president, industry analysis with consultants Auto Pacific, said the U.S. success is all in the clever marketing coupled with appealing products.
“Subaru in the U.S. is a triumph of targeted marketing as much as it is a triumph of good and relevant products in its portfolio. Back in the late ‘90s, Subaru decided to uniquely position itself as THE all wheel drive brand, making all wheel drive standard on everything. To this day, with the exception of the low volume BRZ, Subaru remains extremely well differentiated from its peers in offering standard all-wheel drive, usually for around the same price as its two-wheel drive competition,” Kim said in an email exchange.
“In addition, at around the same time, Subaru positioned itself as a socially conscious brand. It was among the first, maybe even the first, in the U.S. to specifically target the LGBTQ communities, and this was seen as very courageous at the time. Since then, the brand publicly supports many causes,” Kim said.
“This positioning has earned the brand lots of upwardly mobile and educated customers with higher incomes than most other non-luxury brands, so it sells a high mix of more profitable upper-trim levels. So, in addition to strong sales growth, the brand has been selling a lot of its profitable high equipment models,” Kim said.
This has been augmented by consistent high scores in surveys like Consumer Reports. In February, Consumer Reports said the Subaru Ascent was ‘top pick’ in the midsize SUV category, while the Subaru Forester was best pick among compact SUVs. According to Consumer Reports, this was all the more impressive because Subaru models had recently been updated.
It’s not all been positive on the publicity front though. About a month ago Subaru was forced to recall up to 2.3 million Impreza sedans and Foresters after it was discovered certain chemical compounds released by cosmetics, fabric softener or car polish could cause parts to malfunction. There have been other problems too including dodgy fuel-efficiency data, and production hiccups at the plants making the Forester, Impreza and XV/Crosstrek models.
Crosstrek is the XV
The Crosstrek sells in Europe as the XV. I’ve just been driving one and it was very impressive. The XV is a mid-size sedan with pretensions to be an SUV, with its slightly pumped up look. Subaru calls it rugged and sporty. When you climb aboard, the car reeks of quality. In this top of the range 2.0i Premium Lineartronic version the leather seats are impressive, with stitching and looks that would make Lexus proud. All the switches and handles ooze premium class. In the centre of the instrument panel is an 8.0-inch touch-screen display. Switch on the engine and it sounds a bit gruff, courtesy perhaps of the flat-four, four-cylinder engine design. But it soon quietens down. An automatic gearbox is standard across the XV range, as is four-wheel drive.
On the road, the engine takes on an impressive hi-tech hum if you work it hard, although the constantly variable automatic makes a fuss if you floor the accelerator at low speeds. You can switch to manual override and use 7-gears via the paddles on the steering wheel. The XV isn’t fast on paper, with its close to 10 seconds zero to 60 mph acceleration time, but it certainly feels more of a performance vehicle. You will have to watch the speedometer because this quiet cruiser handles illegal speeds with quiet aplomb.
But the fuel consumption was poor. I managed only a combined 23.4 miles per U.S. gallon compared with the official European claim of 34.1 mpg. In the U.S. Subaru claims 29 miles per U.S. gallon combined. Prices for the Crosstrek 2.0i Premium start at $22,895.
Subaru launched the XV at annual Geneva auto show a couple of years ago with the claim of world-class collision safety and hazard avoidance. This year in Geneva, Subaru unveiled the Viziv Adrenaline Concept, which supposedly underlines the new bolder design philosophy. Subaru didn’t give many details but did come up with this priceless example of corporate-speak trying to be cool.
“The Viziv Adrenaline concept stimulates the driver’s mind, encouraging them to ‘drive freely in mother nature’.”
So why has Subaru been so low-key in Europe? It certainly established a niche for itself as the only purveyor of standard four-wheel drive. Europe isn’t quite as snow-bound in winter as much of the U.S. But this appealed to certain narrow groups like farmers and foresters. The joke in Germany is that Subaru at least cornered the market for its Forester with foresters. For sales to accelerate, a big investment in a dealer network was required but that hasn’t so far happened. It was an early leader in SUVs, but never tried to push itself. It would appear that Subaru has missed the boat in Europe, particularly as now all the main carmakers have big fleets of 4×4 SUVs.
Perhaps there’s still time, according to Auto Pacific’s Kim.
“I can’t speak to Subaru’s European positioning, but in North America the brand’s positioning has been a huge part of its success here. Rather than being a small brand trying to emulate a big brand like Toyota or Honda, Subaru has carved out a very well-differentiated niche in the marketplace, and customers have taken note,” he said.
“Subaru is not ignoring Europe, even if it’s currently a much smaller player there. Subaru announced last year that it has started development of a strategic global model, thought to be a compact crossover SUV in the vein of the VIZIV Adrenaline concept shown at Geneva earlier (in March). This model will be instrumental in growing Subaru’s fortunes across the globe. It is the first Subaru model specifically built to conquer markets it is not a big player in, as well as bolster its core markets like North America and Japan. In other words, while Subaru’s efforts to grow in Europe haven’t taken off yet, those efforts appear to be coming soon,” Kim said.
Subaru Europe didn’t respond to a question about its plans.