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Virtue may be its own reward, but sometimes it also helps to sell cars. That's the Subaru story.

Subaru is a pint-sized global car company, yet business is thriving. Sales in Canada are up nearly 8 per cent on the year, while the overall market is down nearly 22 per cent.

There's a reason for this. Subaru builds good, reliable and safe cars — family-type wagons, hatchbacks and sedans that in other words don't break. Consumer Reports sings the praises of Subaru's quality and the chorus also includes J.D. Power and Associates' Vehicle Dependability Study, which measures reliability over three years.

All four models in the Subaru lineup — the Impreza, Forester, Legacy/Outback and Tribeca — are Top Safety Picks from the U.S. Insurance Institute for Highway Safety. Automotive Lease Guide reports that Subaru has the fourth-best resale value among mainstream brands after four years.

Yet Subaru is a niche player in Canada and the rest of the world. Global sales came to about 600,000 in 2008, while in Canada, Subaru moved 20,000 cars last year. Peanuts. Toyota sold 200,000-plus in Canada last year and 8.9 million around the world. Toyota is the world's biggest car company, while Subaru ranks No. 20.

One problem is that Subarus are not cheap. The least-expensive Legacy mid-size sedan, for instance, lists for $26,995. That's the super-low-emissions PZEV version rated at a rather lacklustre 170 horsepower.

Sure, the Legacy, like all Subarus, is all-wheel-drive, but in a tight-money market, there is no denying the fact that the starter version of the 2010 Toyota Camry — front-wheel-drive — lists for $2,345 less at $24,650. Value is all well and good, but the actual price matters, too.

Then there is the Subaru engine. It's a type called a "boxer" design, which means the cylinders oppose one another like a "V" engine turned on its side. It's tough to explain the benefits of the boxer; it's an unusual design used only by Subaru and Porsche. But this much is certain: Four-cylinder boxers are inherently smoother than more upright four-bangers and they have a lower centre of gravity ,which helps with stability and cornering.

Subaru's growth has also been constrained by the lack of a broad range of models of all shapes, sizes, types and powertrains. On top of that, Subaru lacks a hybrid gasoline-electric model. Rivals such as Toyota, Honda, Ford and General Motors are falling all over themselves pushing hybrids and electrics, but not Subaru.

Subaru does have an excellent all-wheel-drive system. Yet because AWD is standard across the board, fuel-efficiency is nothing special. No one particularly sexy drives a Subaru, either. Hollywood darlings like Cameron Diaz and Leonardo DiCaprio drive Toyota Prius hybrids.

Another problem is design. All four Subaru models look more unpretentious than breathtaking. Moreover, when Subaru has tried to strike out in a daring design direction, the effort has not been well rewarded and the damage has stuck.

Take the Tribeca SUV. It arrived in 2006 as a top-of the-line model with an odd-looking front end that blended Subaru's aircraft heritage with an Alfa Romeo beak. The cabin was equally weird — swoopy and rounded and more than a little startling.

The designer tried to explain all this to me, but I was distracted by his floppy, oversized clown shoes. I was sure he'd trip over them when he did the design walk-around.

And the name? What was up with that? When the Tribeca first hit showrooms it was called the B9 Tribeca. Subaru's honchos apparently couldn't make up their minds, so they picked two names. The B9 part has since been kicked, but why name a Subaru after a Manhattan neighbourhood, anyway?

At least the Tribeca has been given a styling makeover; it now resembles Chrysler's discontinued Pacifica crossover, which is not all bad. And the Tribeca is safe and reliable, and commands a small but loyal following.

There have been other odd Subarus, too. In 2005, Subaru sold something called the Baja, which was a Legacy station wagon with a pickup truck rear end. Then there was the SVX sports car. It had a window within a window on each side and a flat, wide stance that was ungainly. It looked nothing like anything else in Subaru's showrooms at the time. Before that, Subaru had something called the Brat. It was a two-seater with a cargo bed. Very weird.

Katsuhiro Yokoyama, president and chief executive officer of Subaru Canada, acknowledges all this and then reminds me that Subaru's big challenge today has nothing to do with anything I've mentioned so far. That's all ancient history; Subaru is long past all that.

Today's Subaru is progressive and design-conscious, and while humility is critical to staying focused on the prize — sales growth and satisfied customers — the core Subaru message needs to get out there.

"First, we need to get on the shopping list" of buyers who naturally consider Toyotas and Hondas and Nissans," he says. "Subaru is not a Swedish car or an Australian car, either."

The Aussie dig is all about marketing from the past. In the mid-1990s, when Subaru rebuilt its business by going with strictly AWD models in Canada and the United States, the Australian comedian Paul Hogan, better known as Crocodile Dundee, became company spokesman. That did boost sales and awareness for Subaru, but the Crocodile Dundee shtick led some to think Subaru was a division of General Motors' Holden Australian division.

Subaru's dalliance with GM didn't help in a broader sense, either. At one time, GM held an ownership in Subaru's parent, Fuji Heavy Industries. With GM looking for a return on its investment, Subaru Imprezas ended up being rebadged and sold as Saab 9-2s. What a sales flop. Worse, many consumers thought the rebadged Subarus were from Sweden, not Japan.

Toyota has since bought GM's stake and now owns 16.6 per cent of Fuji. The Subaru plant in Indiana is shared with Toyota, too, and the two companies are working to develop new models. Already, the two companies build Camry and Legacy models in the same Indiana plant.

Yokoyama says the alliance with Toyota benefits Subaru in many ways, not the least of which has been on the financing side. Subaru uses Toyota Financial Services rather than GMAC. Toyota's finance arm has money for lending and leasing, while GMAC has lost billions on bad mortgages in the United States and has qualified for bailout money from the U.S. government. Subaru's tie-in to a strong lender is obviously a good thing during a credit crunch.

Still, Subaru must work hard to wipe out misconceptions about the brand. An all-new 2010 Legacy and Outback, coming this summer, will be a cornerstone of the company's brand-building.

"We will not cut marketing or advertising this year," he says. "We are looking at savings in other areas, but we're not cutting marketing."

So let the message-making begin. It will start with the new Legacy sedan and Outback set to hit showrooms in a few months. Both will ride on a longer wheelbase and have 107 millimetres more rear legroom than the current models. The new Outback loses its overhang and will be 36 mm shorter.

The updated Legacy and Outback have evolved into bigger versions of past models. The new cars have a modern shape and profile, but the design is not jarring and it won't look out of place in Subaru showrooms.

The trick for Subaru is to build on its image as a somewhat premium brand, though Yokoyama is sensitive to any suggestion that Subarus are expensive. So is Subaru Canada director Ted Lalka.

"They say Subarus are expensive, but load up a Honda or Toyota with the same equipment as a Subaru and the price difference is a wash," he says.

Still, Subarus are most popular with better-educated buyers with above-average incomes. So given the current economic circumstances, Subaru may have an opportunity with owners in a trade-down mode. That is, the owner who needs to get out of a $50,000 luxury car might be willing to trade down to a $30,000-plus Subaru with no loss of face.

We'll see. What's certain is that Yokoyama and crew will be going into the marketplace with clear marketing messages designed to eliminate any confusion about what Subaru is about. One key tool: the company website, which has been completely revamped and now is ranked among the most user-friendly by an independent agency.

So while so many car companies are trying to figure out ways to survive the downturn, pint-sized Subaru is flexing its virtuous muscles at perhaps just the right time.