The first major overhaul of Subaru's signature boxer powerplant in 21 years? Yes, and very much welcome. Who wouldn't welcome a 10 per cent boost in fuel economy over the outgoing engine, and better performance overall? And there you have yet another left-brain reason to put a Subaru on your shopping list. A better engine.
Subaru, of course, is the rational brand, the auto company making cars with impeccable crash test scores, top-notch quality, world-class resale values and a small but loyal following. Small but growing, too.
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Compact crossover wagon ain't sexy - but it's an engineering stud
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Ever since Subaru Canada cut prices in what was clearly a response to outraged buyers - buyers smart enough to have a look at how much less Americans were paying - sales north of the border have soared. Through the end of November, Canadian sales were up 21 per cent, market share was up two-tenths of a per cent and Subaru Canada vice-president Ted Lalka sees sales ending this month at about 27,500, an all-time record.
"I can see 33,000 next year," he adds during a briefing on the new boxer making its debut in the Forester compact crossover wagon.
That's a pretty amazing number, at least from Lalka's perspective. He's a Subaru lifer, a veteran of a couple of decades in the trenches, starting first at the company in an accounting role, then moving into various senior positions, from marketing to product planning. He, at least as much as anyone at Subaru Canada, remembers the dark days of the early 1990s when the company was struggling to sell 4,000 cars.
He also recalls Subaru's aborted attempt to compete head-to-head with the Hondas and the Toyotas of the world. Utter disaster. "When we did try, our brand no longer stood for anything," he says.
In desperation, in a last gasp before oblivion, Subaru struck on the novel idea of playing to its strength - all-wheel drive. From the mid-1990s onward, every Subaru in Canada and the United States has been equipped with AWD. That limits Subaru's appeal in warm-weather climes, and the super price-conscious think Subies are just too expensive. Nonetheless, Subaru has a definable, easily understandable brand promise: AWD. If you don't think that matters, ask yourself what General Motors stood for before bankruptcy.
Beyond AWD, every single Subaru model is a Top Safety Pick of the U.S. Insurance Institute for Highway Safety. Those are the guys whose vigorous crash tests should be a model for the federal government in both Canada and the U.S.
Resale? Automotive Lease Guide pegs Subaru as the top mainstream brand. After four years, your Subaru should be worth 41.9 per cent of its original sticker (Honda is No. 2 at 41.6 per cent). The Impreza, Legacy and WRX all topped their respective segments, too. Canadian Black Book, an ALG rival, says similar things about Subaru.
As for quality, the Subaru brand is ranked No. 7 overall by Consumer Reports for reliability, with the four-cylinder Legacy the highest-ranked Subie model. To be fair, J.D. Power and Associates ranks Subaru below-average for initial quality (the first 90 days), but above-average for three-year reliability. The initial quality score may be a reflection of the quirkiness of the Subaru brand, or the high expectations owners have, or who knows?
We know this: Subaru owners have high expectations for a long list of reasons; at the top is pricing. There are no cheapo Subarus out there and the company is reluctant to go the discounting route to battle slow sales. Canadian buyers have become accustomed to generous sales sweeteners and blatant price-cutting, so the fact Subaru is moving the metal in ever-increasing numbers is quite startling.
Nonetheless, Subaru has been selectively cutting prices and repositioning its model lineup, all the while freshening it with an all-new Forester (2009 model year) and Legacy/Outback (2010 model year), to name two. The Impreza compact, Tribeca SUV and WRX have all been tweaked, too.
Putting an emphasis on new products has paid off for Subaru, and not just in sales, but also in profits and customer retention or owner loyalty. In a nutshell, Subaru is on a roll, picking up market share and posting strong earnings. With success comes a bit of a swagger. Thus, the new tag line: "Confidence in Motion."
Perhaps this niche brand, whose parent is Fuji Heavy Industries, has earned a pat on the back. Despite battling strong headwinds created by the yen's rise against the dollar and euro, sluggish new-car demand in Japan and the global recession, Subaru is surviving and growing.
"Our sales in North America have expanded much faster than even we expected," said Ikuo Mori, president and CEO of Fuji, in an interview with trade journal Automotive News. "We've benefited from a general downsizing trend among car buyers in the U.S. with our lineup of relatively smaller cars."
As a result, Fuji reported a record $537-million net profit for the first six months, returning to the black after a $261-million loss during the same period of last fiscal year. Sales rose 26.5 per cent to an all-time half-year high. For the full fiscal year through March, Fuji more than doubled its profit for group net profit to $602-million.
Being profitable gives Subaru some breathing room. As a very small player (about 600,000 annual sales globally), this niche brand is reinventing itself on the fly. A key piece is Subaru's alliance with Toyota, which owns slightly less than 17 per cent of Fuji.
Subaru officials have said the company will stay true to its core segments with the Impreza, Forester, Legacy/Outback, but there are plans to grow and expand into new segments. A sporty car is planned, with production beginning next year. Also, a hybrid created with help from Toyota goes on sale in 2012.
Neither the sporty car nor the hybrid will be big volume sellers, but they should help attract younger buyers and the environmentally conscious. Subaru officials also conceded they will likely need a hybrid to meet the expected 2020 fleet-wide fuel economy rules.
All this adds up to a good times for what some refer to as the "poor man's Audi." Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass., argues that through steady hard work, Subaru is steadily attracting buyers beyond the brand's traditional core of university professors and outdoor enthusiasts.
"They are quietly successful, and their buyers appreciate that. They haven't abandoned their core and are now expanding beyond it," she says.
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Compact crossover wagon ain't sexy - but it's an engineering stud
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With room for Corgis or groupies, this top-of-the-line luxury car has it all, says Peter Cheney