Ideas/thoughts on Subaru's upscale movement?

[Rick Courtright]

remove one strong reason for me to buy Subaru. If I can get a good small Audi
AWD wagon for the same price as a Subaru with the same basic features, Audi's
superior customer service might well tilt the balance.

From what I've seen, the consensus of opinion over the last 20 years
seems to point at Subie's QC going down, and Audi's coming up. If the
trend lasts another 20 years, they might meet in the middle... but
that's just opinion.

I think the proof can be found cruising the parking lots. Look at the
age of the cars you see, ask owners how many miles they have on the
clock. German cars have a reputation for "quality" that's not borne out
IME by seeing too many 15 year old specimens with a quarter million
miles on them (and most of them seem to be M-Bs.) I don't agree with
everything Subaru's doing to their cars, their customer service MAY lack
and IMO their parts network definitely DOES, but dollar for dollar, I
think Subie still offers a lot more than my Teutonic forebearers have
provided.

Rick

 

[Bruce Hoult]

I didn't get my first Subaru until 1997, an OB. I'd really not paid any
attention to them since the first I saw in 1975 or so. "Cute little
cars." They've changed a bit since then.

So has everything. Compare a 1977 Honda Civic to the car with the same
name today (I get a chance to do this every weekend as we have 1977
Hondamatic Civic at the gliding field as a gofer car). Compare the
early Toyota Corollas to the ones now. Hell, perhaps the biggest
changes have been in the Daihatsu Charade or the Mitsubishi Mirage
("Colt" in the US???).

And not only have individual models moved upmarket, those models all
used to be the mainstay of those manufacturers, but now they're all
offering a lot of bigger and more expensive cars.

 

[Don.]

You are correct, Bruce. Did you see my previous post on this where I
discussed
justifications for change? I.e., none of us would seriously go back to the
Model T Ford for
a daily driver, etc. For a company to survive one ingredient is just like
for
you and I--staying "ahead of the state of the art".

Remember the days when auto makers used to shut the plants for 3 months
while
they retooled for "next year's model"? Well, they've gotten over that,
thanks
to the Unions, but they still come out with something "new for next year."
Otherwise they are left in the dust.

Sure, I can talk about how great my 1964 356 Porsche was. But I wouldn't
replace my 1988 Carrera with that 356! Or even my '03 Baja.

You and I, in our personal lives, will stagnate unless we continue to
advance our career skills.

I'm not excusing attitudes of dealers, here in Coeur d'Alene, ID we have a
great dealer and crew. But, if he moves up, and a hard knut takes over,
things will probably change. Profit is the motive, just like a salary
increase for you young people.

And that's enough outa me, I doubt anyone got this far anyway, <grin>
Don

 

[Danny Russell]

Most of you hardcore Subaru addicts are probably aware of Subaru's attempt
to move upscale. Recent readings indicate that they are apparently gunning
for BMW and Audi. As amused as I would be to see Subaru outsell Audi and
BMW, I just don't see that happening. And quite frankly, it worries me a
bit. I keep thinking about before the Outback, back when Subaru was trying
to compete with Toyota and Honda. They almost went down for good, at least
in the states, and fortunately they were able to rebound from those times by
revising their strategy and concentrating on the core of their product -
boxer engines and all wheel drive. And don't even get me started on the
SVX - that vehicle was before its time in so many ways, including the fact
that few people were willing to check out dealerships still known for
economy cars looking for a technologically advanced luxury sport coupe.

I for one, wish they'd stay further down on the automotive pricing ladder,
but they seem insistent on trying to move upscale. On the other hand, BMWs
of the past few years seem to have taken on an almost obsessive level of
technology, to the point where a lot of the reviews I've read are
complaining, at least in part, about the lack of driver involvement in the
newer BMWs. So perhaps there might be some room for Subaru there after all.

Any thoughts? Just curious on what other Subie enthusiasts think about
this.

The option of added power is welcome. The added bulk, weight and cost is not. IMO the risk is that
Subaru is losing their quirky identity, which IS the patented appeal IMO.

 

[Peter Johnston]

"Moving Upscale" = more $$ for the same crap.

All automobile manufacturers have about the same costs. It costs about the
same to design and build a Mayback as it does a Subaru - well, you know what
I mean. In any event, there is WAY more margin on luxury vehicles than
elsewhere. Why do you think a Ferrari Enzo sells for over $1,000,000??
Cachet, prestige, exclusivity. Now ask yourself, do I get "that" when I buy
a Subaru? Sort of explains itself, now, doesn't it?

Better still, save yourself the agony of owning a Subaru in the first place.
Get a Toyota or a Lexus. Ive got a 92 Loyale. Argh, I'm not going there
....

 

[Ignignokt]

"Moving Upscale" = more $$ for the same crap.

All automobile manufacturers have about the same costs. It costs
about the same to design and build a Mayback as it does a Subaru -
well, you know what I mean. In any event, there is WAY more margin
on luxury vehicles than elsewhere. Why do you think a Ferrari Enzo
sells for over $1,000,000?? Cachet, prestige, exclusivity. Now ask
yourself, do I get "that" when I buy a Subaru? Sort of explains
itself, now, doesn't it?

Better still, save yourself the agony of owning a Subaru in the first
place. Get a Toyota or a Lexus. Ive got a 92 Loyale. Argh, I'm not
going there ...

Yeah. Much better to overpay Toyota for *their* "cachet, prestige,
exclusivity" than Subaru. Right?

- Greg Reed

 

[Manuel Freitas]

AUDI? Out of the top 30 manufacturers rated for overall reliability by
Consumer Reports (admittedly a questionable group), Subaru ranks 6th and
Audi a sad 20th....that's even worse than 7 of the US manufacturers...not
good!
From my experience repairing Audis and the expense of parts I don't
consider them an equal car or much of an alternative. TG

Does anyone really care about those ratings? They are so completely
subjective.
I have a 2000 Jetta with 80K miles (basically same as an A3), and it
runs great, no major problems whatsoever. My 1999 Outback wagon on the
other hand, has had nothing but problems. Replaced clutch at 35K
miles, replaced center differential at 75K miles. Replaced oil pump
gaskets at 60K miles.

- Manuel.

 

[L. Kreh]

There's an interesting long-term ownership survey (1996-2001) for the
Audi A4 in next month's Road & Track. Bottomline was not many
problems new, but a few down the road. There's also a comparo article
on Acura TSX vs. Subaru Legacy GT.

 

[Rockin Ronnie]

Interesting. I wondered what kind of effect the Matrix and Vibe might have
in the long run on the high-concentration Subaru areas. I know that Toyota
and Honda didn't do nearly as well in the 4x4 car segment as Subaru did,
just as Subaru abandoned the bland front drive segment in an effort to
concentrate on their niche marketing strategy which has worked so well for
10 years.

-Matt

I recently acquired an 05 OBW after having had a 2000 OBW for over 4
years. No trouble with the 2000, a couple of minor things and of course,
tires. I find the 05 quite different and much more refined in every way.
I did not expect the change to be so dramatic but it was and it has
convinced me that I made the right choice, again!

My brother in law was looking for a new wagon this past summer and he
seemed interested in my 05, liked a lot of the features but ended up
buying a Passat wagon. Why? Because he is somewhat status conscious and
really could not see himself driving a Subaru. Guess he couldn't see it
as an upmarket car.

Now, moving upmarket is not such a bad thing but I think Subaru has to
shake off the image of being a cheap car and that will take some time.

Ron

 

[Henry Paul]

So he passed up a Subaru for a VW? I feel about VWs as he does about
Subarus. heh

 

[Jim Stewart]

"Moving Upscale" = more $$ for the same crap.

All automobile manufacturers have about the same costs. It costs about the
same to design and build a Mayback as it does a Subaru -

You're not much of an engineer if you believe
that.

 

[busterb]

You're not much of an engineer if you believe
that.

Design costs are likely similar for a vehicle in the same class- a
ferrari may be a more costly to design than the latest korean
cheapbox. The difference is in the build. Labor and components. In the
US the UAW bums get paid even on layoff, they have no accountability
or pride in their products. Case in point : the GM plant in Linden NJ
has a sign at the front employee lot " US made vehicles only". Since
GM employees get a good discount and GM has a vehicle to suit every
need from high performance(vette) to econotransport (cavalier) it
seems odd that the majority of GM employees would not buy GM products
(especially with discount). So to keep costs competitive GM, Ford etc
may spend $5.00 per alternator to offset $20+ /hour wages while
Toyota, Isuzu, may spend $7.00 per alternator and have a $10 /hour
wage. That extra $2.00 on a component may be the difference between
failing in three years or failing in 7.

 

[Jim Stewart]

Design costs are likely similar for a vehicle in the same class- a
ferrari may be a more costly to design than the latest korean
cheapbox. The difference is in the build. Labor and components. In the
US the UAW bums get paid even on layoff, they have no accountability
or pride in their products. Case in point : the GM plant in Linden NJ
has a sign at the front employee lot " US made vehicles only". Since
GM employees get a good discount and GM has a vehicle to suit every
need from high performance(vette) to econotransport (cavalier) it
seems odd that the majority of GM employees would not buy GM products
(especially with discount). So to keep costs competitive GM, Ford etc
may spend $5.00 per alternator to offset $20+ /hour wages while
Toyota, Isuzu, may spend $7.00 per alternator and have a $10 /hour
wage. That extra $2.00 on a component may be the difference between
failing in three years or failing in 7.

My thoughts are that it costs more to design
a flat-four with awd than a straight-four
with front wheel drive. Quite a bit more.

 

[busterb]

My thoughts are that it costs more to design
a flat-four with awd than a straight-four
with front wheel drive. Quite a bit more.

The flat four has already been designed and only gets tweaked every so
often so the costs of design have been amortized. Same with awd
system.

 

[N]

Most of you hardcore Subaru addicts are probably aware of Subaru's attempt
to move upscale. Recent readings indicate that they are apparently gunning
for BMW and Audi. As amused as I would be to see Subaru outsell Audi and
BMW, I just don't see that happening. And quite frankly, it worries me a
bit. I keep thinking about before the Outback, back when Subaru was trying
to compete with Toyota and Honda.

My guess is that Subaru (at least with the Outback) has realized that
they have a niche position and are never going to catch Honda and
Toyota (unless Subaru lowers prices a lot and buys sales that way). So
it may be smarter for Subaru (at least in the US) to move upmarket and
compete with more prestigious brands, such as Audi and BMW. At that
level, Subaru might sell fewer cars, but consumers might see Subaru as
a more desirable, exclusive car and be willing to pay more $$$ to get
that exclusivity. And while Subaru dealers might sell fewer Outbacks
at the higher prices, the dealers might make more money per sale of
each Outback.

Perhaps I'm wrong, but it seems to me that the Outback is the model
that's moving upmarket, while other models, such as the Forester and
Impreza, remain in their previous positions.

BTW, VW's doing something comparable, with the recent Touareg SUV,
which starts at about $37k, and the big sedan (Phaeton? $70k+?). If I
had had to predict VW's possible recent new models, I would've guessed
SUV spinoffs of the Jetta and/or Passat, not pricey upmarket models.
So I'd say that rather than produce more small- or medium-size "me
too" cars that compete with Honda and Toyota, both Subaru and VW are
trying to move upmarket to a level where consumers won't look so hard
at the prices and profits per car are better. IOW, Subaru and VW don't
want their cars to be commodities and have to compete so hard on price
against honda and Toyota, who seem to be much closer to winning the
market for affordable cars. And Toyota has such a wide range of models
and brands now that it would be very hard for Subaru and/or VW to
compete with Toyota.

Just my thoughts! ;-)

(snip)

 

[N]

I'm afraid they are going to end up creating products nobody will want and
alienating their diehard customers.

One of the major factors I look at for Subaru in addition to the reliability
is the price. If I wanted a BMW or an Audi I would buy one. I like Subaru
because they are different and not like every other car I pass on the road.

Subaru might want to take that sort of exclusivity and make the cars
more exclusive by raising the price.

But overall, isn't it especially the Outback that's going upmarket, no
the other models?

(snip)

 

[N]

http://www.autoweek.com/news.cms?newsId=100028
http://www.autoweek.com/news.cms?newsId=100366
http://www.autoweek.com/news.cms?newsId=100451

Articles are a few months old, but still good reading.

Thank you for the above. Very enlightening.

It seems to me that Subaru is going the way of VW and trying to get
away from the low-priced market, where they haven't done well, and
move to at least a few upmarket, low-volume, yet high-profit models.

I can remember when the Audi brand first came to the US and their cars
were hardly more than rebadged VWs. Now Audi is an upscale brand and
possibly the model for Subaru's future plans.

I'll probably buy a new car in the next few years and the Outback
might fit my needs, but the price may already be too high for me.

(snip)

 

[Rick Courtright]

But overall, isn't it especially the Outback that's going upmarket, no
the other models?

Not sure... saw an ad on TV last night for a Legacy sedan at US $28,000+
as shown, starting price US $26k. That's a lot of money for a car I'd
put in the US $22k Toyota Camry or Nissan Altima class before the
BMW/Audi class they were mentioning in the ad. But then again, buy a
Subie, BMW and Audi, drive 'em head to head for 100k miles and then
decide which, if any, one would/could drive another 100k and I may be
way off base. What price can be placed on "perception?" (Like the
premium price on the new Saabaru?)

Rick

 

[N]

I got my 04 OBW for under 20k . I am quite pleased with the car as it
is the perfect combination of sporty fun to drive but ale to handle
bad weather and moderately rough terrain.

I noticed my local Subaru dealer offering similar deals this summer.

I'll probably buy new wheels in the next year or two, and I was
slightly tempted to look at an '04 Outback due to the recent low
prices, but this year (due to personal reasons) isn't a good time to
buy.

I am concerned that subaru
is pricing themselves out of their former tatrget audience. When I
need a new car in 7 years (I usually keep a car for about 8 years-
then its not worth fixing to me) and Subie is 35k I may look
elsewhere.

I'm also concerned that an Outback will be out of my reach in a few
years when I'm ready to buy. While I guess it's possible I'll have
more $$$ then and be able to afford the possible higher prices of the
future, I think I won't be able to spend a lot more, and I probably
also won't want to spend more.

To potential Outback buyers: Right now might be a good time to go look
for unsold '04 Outbacks at Subaru dealers.

Go back to your roots subaru or you;ll be in chap 11 isn
the us

Subaru has always struggled in the US for various reasons, such as not
having many models to choose from. Maybe they're thinking that they
need a find a niche they can hold on to.

Given that Audi moved upscale and also stresses AWD, I can see that
Subaru might want to take Audi's place. An acquaintance has an Audi
Allroad, similar to the following:

http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&rd=1&item=2489749443&category=80731

It's pretty impressive, although a turbo 6-cylinder model is priced
around $40k, and V8 Allroads can go for $80, although I've never seen
one. It's about the same size or smaller than the Outback. If you see
the Allroad as a competitor to the Outback, the Outback starts looking
like an excellent deal by comparison, and thus Subaru could justify
nudging the Outback's price towards the Allroad's price.

 

[N]

I think I'm with Blue. My Forester is just at the bottom end of what I'd be
happy with, as far as creature comforts and performance go. The Forester XT
(while not a "Premium," it's still toward the top end of their "bells and
whistles" scale) was actually a step down for me from my previous cars. It
was a sacrifice I made in order to gain AWD and still remain inside my
budget. Had I been able to wait a bit, I'd likely be in an '05 Legacy GT
right now instead of the Forester. If I'd had deep enough pockets, I'd be
in an AWD Audi, BMW, or Volvo. The Forester XT fills an otherwise empty
niche.

Sounds like you're the kind of customer Subaru may be looking for now.
If you compare a Forester or Outback to the comparable models from the
above brands, the Subaru looks like a bargain. If Subaru can make more
people feel that way, then Subaru won't have to compete with (for
example) Toyota.

I'll probably be shopping myself in a year or two, and I'll probably
look at a Honda CR-V vs. a Forester. If I want to go bigger, I'll
probably look at a Honda Pilot vs. an Outback.

I fully expect that my next vehicle will be the 05-generation Legacy
GT -- unless they come out with something better in the mean time.

Will Subaru alienate their so-called "core" customers by continuing to offer
more up-scale products? Not being in that "core" demographic, I can't say
for sure. I'm guessing that these customers are being kept quite happy with
the base Impreza and Legacy models, which IMO still offer an excellent
bargain, if AWD is important to you. But I can tell you this much for
certain: I wouldn't be a Subaru owner today were it not for their more
upscale offerings. I wouldn't have even considered it. I'd have purchased
a used European car before a base Impreza or Legacy, or even an Outback.

Interesting. Thanks. Sounds like Subaru is gaining some ground with
folks like you, who want some luxury, sophistication, and exclusivity,
and are willing to pay for it.

(snip)