Subaru plans big sales effort in the South
Hans Greimel
Subaru's Masatsugu Nagato: “We may have to hire some outside third-party designers.”
BEIJING -- Subaru plans to chase new business in the Sun Belt and tweak its marketing in an effort to make its soaring U.S. sales more than just a bubble.
Subaru's Japan-based overseas sales chief, Masatsugu Nagato, said the brand wants to spend more on marketing in Texas, Florida and Southern California, as well as open more dealerships in the South.
Subaru also is serious about tackling another oft-cited weakness: uninspiring designs. Nagato said Subaru is trying to put some zest in its styling and may turn to an outside consultant for help.
"Our designers are ready to listen to those criticisms so we can improve," Nagato said in an interview at the Beijing auto show. "We may have to hire some outside third-party designers."
Regardless of styling, Subaru vehicles are flying off U.S. lots this year.
Fuji Heavy Industries, maker of Subaru vehicles, targets U.S. sales of 230,000 for 2010. That would be up 6 percent from 2009's record. In the first three months, sales jumped 38 percent to 57,494, outpacing the overall market's 16 percent increase. Only Ford and
[COLOR=#F82C70 ! important][COLOR=#F82C70 ! important]Buick[/COLOR][/COLOR] did better in the first quarter.
At the same time, Subaru's market share climbed to 2.3 percent, from 1.9 percent a year earlier.
Last year Subaru's 15 percent sales increase was tops in the United States. Only two other brands, Hyundai and Kia, were up in a down market.
"Our current impression is that this is not a bubble," Nagato said. "Our products are good."
The brand is getting a lift from improving residual values, he said. But since 2006, Subaru also has cut prices, refocused on safety and performance and listened more to dealers.
Nagato said Subaru aims to keep its U.S. dealer count stable at around 600. Snowy northern states, where customers appreciate all-wheel drive, have long been a stronghold. Now Nagato wants more dealerships in the South.
"Texas, Florida, the southern part of California, there we have to do better," Nagato said. "We may have to strengthen those regions so we can penetrate more."
Will there be a new version of the slow-selling Tribeca? “No comment,” says sales chief Masatsugu Nagato.
That may call for shifting some of the marketing budget from the North to the South, he said.
"When we can have 4 percent market share in Australia, why not in Texas or Southern California?" Nagato said. "We are going to introduce the same marketing approach to those regions, and the main key words are driving fun, driving confidence and safety."
As for products, Nagato said Subaru remains on schedule to build a new sports
[COLOR=#F82C70 ! important][COLOR=#F82C70 ! important]car[/COLOR][/COLOR] in Japan by the end of 2011 and launch sales in early 2012.
The car, developed jointly with Toyota Motor Corp., will be Subaru's first front-engine, rear-wheel-drive model. Nagato said Subaru wants experience in that layout so it possibly can use rear drive in other future models.
Also, Subaru's first hybrid is on track to debut by the end of 2012. The gasoline-electric drivetrain probably will be an option on an existing model, Nagato said.
One model that seems a low priority is the Tribeca SUV, Subaru's big sales laggard. Subaru sold only 674 in the first quarter, down from 1,415 last year.
Nagato said Subaru plans to keep selling the Tribeca because the vehicle is fully amortized. But when asked whether the Tribeca was in line for a refreshened next generation, he said, "No comment."