Special Coverage

Chicago Auto Show

CHICAGO – Subaru of America Inc. is projecting its sales will be “at least flat” this year, following a modest 0.3% increase in deliveries in 2008.

“In this new environment, flat is the new up,” says Tim Mahoney, senior vice president and chief marketing officer for Subaru of America Inc., at the recent Chicago auto show here.

“We’re confident about 2009,” he says. “We were up 8% in January, and things are looking good for February.”

Subaru was the only auto maker to post a sales increase in 2008 compared with prior-year, as deliveries rose by 491 units to 187,699, Ward’s data shows.

The bulk of the increase came courtesy of the redesigned ‘09 Forester cross/utility vehicle, which saw sales spike 36.4% to 60,748 units. Subaru’s high-performance Impreza models also performed well in 2008, with sales climbing 6.0%, compared with 2007, to 49,098.

Subaru outsold several more mainstream brands, including Cadillac, Acura, Buick and Volvo.

The Japanese auto maker also posted impressive results in a number of other areas, Mahoney says.

“Our awareness numbers about the brand went up 15% in 2008, and people’s opinion about our brand went up 38%,” he says. “And consideration in this marketplace, where everyone is fighting for market share, grew 31%.”

Subaru increased its U.S. market share to 2% last year, the largest ever recorded by the auto maker.

“We hope to have more market share increases,” Mahoney says, noting the launch this year of a new Legacy midsize sedan should help bolster sales. “We’ve been on a really solid and steady growth pattern. It won’t go forever, but I think there’s still upside potential.”

Subaru ranked No.8 in the 2008 National Automobile Dealers Assn.’s Dealer Attitude Survey.

“Dealers are a tough crowd and cautious critics,” Mahoney says. “We went from 20th to eighth (place.) No brand in the history of that survey has ever jumped that far that fast.”

Mahoney credits Subaru’s success in a difficult market to a concentration on product and the brand’s customer base. Unlike other auto makers, Subaru customers have a unique attachment to the brand, he says, citing results of a recent study.

Toyota and Honda owners like their cars, but with Subaru it’s a bit of a club. It’s, ‘I’m in this group,’ which is a really powerful thing. In markets like this, it helps,” he says.

Subaru plans to increase its marketing budget, despite the down economy, a move Mahoney says many auto makers are hesitant to make.

“If you listen to the brain trusts at Wharton (Business School) and Harvard (University), they will tell you that when getting through a recession, the worst thing you can do is cut back (on) your marketing,” he says.

“What happens is you step away from the public consciousness and somebody else comes in and fills the gap. So our intention is to grow (marketing expenditure) slightly and to continue to tell our story.”