FLORENCE, Italy – Managing to keep secret for nearly three years its product strategy, Fuji Heavy Industries planned all along to introduce more than one or two body styles of its popular Subaru Impreza compact car.

Right out of the gate, Subaru management knew the brand needed a compact cross/utility vehicle smaller and more sporty than the squarishly midsize – and well-established – Forester CUV.

So the XV Crosstrek goes on sale in fall 2012 in the U.S. with the same running gear and identical interior appointments as the all-new, fourth-generation Impreza from which it’s derived. Both the Impreza 5-door and sedan are launching now.

This 3-in-1 product approach makes good sense for the bottom line, but it’s also risky: While the XV Crosstrek will not be cross-shopped with the Impreza sedan, it potentially could cannibalize sales of the 5-door Impreza Sport.

The key difference between the two is additional headroom and a larger cargo hold in the CUV. The XV also gets unique wheels, cladding over wheel wells and front and rear fascia and bumpers.

But most important is what the XV Crosstrek represents in the marketplace. Subaru executives are convinced many consumers shop for a new car without knowing exactly what they want.

They search websites thinking they need a car, but become interested if a stylish compact CUV is available for less than $20,000. The XV Crosstrek is intended to be that vehicle for Subaru.

And a sales target of 25,000 to 30,000 units seems reasonable. That’s about half the typical volume of Impreza 4- and 5-door models. Considering Subaru’s investment in the XV Crosstrek is minimal because up to 90% of the parts are shared with the Impreza, the nothing-to-lose strategy could pay off handsomely.

An all-new 2.0L “FB” 4-cyl. boxer engine, which debuts in the Impreza, powers the CUV in the U.S., while European markets, which will get the XV in spring, also will offer a 1.6L gasoline boxer and 2.0L diesel boxer.

We tested the naturally aspirated gasoline 2.0L FB with the continuously variable transmission – the identical powertrain that drives the Impreza.

The 150-hp boxer is capable, reasonably refined and gets the job done here on the rolling hills of Tuscany, but the package is tuned for fuel efficiency, rather than a thrilling ride. Plus, the XV Crosstrek is 175 lbs. (79 kg) heavier than the Impreza.

The infinitely more entertaining package, which sadly is not planned for the U.S. market, is a 2.0L turbodiesel that makes twice the torque of the base 1.6L gasoline engine that also won’t come to the U.S. With 258 lb.-ft. (350 Nm) of thrust, the smooth 2.0L diesel, paired with the same 6-speed manual transmission as in the Impreza, turns the XV Crosstrek into a truly fun, agile, cute ute that tackles highways and city driving as well as light off-roading.

If Subaru needs a business case for the diesel in the U.S., there’s the all-important fuel efficiency: Our test drives on similar types of country roads yield 27 mpg (8.8 L/100 km) with the diesel and 6-speed manual, compared with 24 mpg (10 L/100 km) with the gasoline engine and CVT.

The manual transmission also will be available in the U.S., but Subaru officials expect 90% of customers will opt for the CVT, same as with the Impreza. U.S. fuel-economy ratings for the XV Crosstrek will not be available until later in the year, but the combined European test cycle pegs the 2.0L FB with CVT at 36 mpg (6.6 L/100 km), which seems high.

The Environmental Protection Agency rates the Impreza at 27/36 mpg (8.7-6.5 L/100 km) city/highway. With its vast, undulating terrain of olive orchards and vineyards, Tuscany provides an ideal testing ground for the electric power steering system, which works overtime snaking through tight backroads and swift altitude changes.

If hydraulic power steering is supposed to be better than fully electric systems, the XV Crosstrek would suggest otherwise.

The independent strut front suspension and independent double-wishbone setup at the rear carry over directly from the Impreza, and the precautionary Yokohama snow tires make for a soft ride on these dry roads. Inside, charcoal is the only interior color for European models tested here, and the shade tends to be drab. Imprezas in the U.S. offer a sharp black-and-tan trim package, which is expected to be offered in Southern markets in the new CUV.

Standing 4 ins. (10 cm) taller than the Impreza, the XV Crosstrek’s most impressive attribute is its sense of spaciousness compared with its compact-car sibling.

Headroom is ample, as is legroom for backseat occupants. Fold the seats flat, and the cargo hold is ready for just about anything, from camping trips to shopping excursions.

Some auto makers view Subaru as nothing more than a niche player, but the XV Crosstrek is part of a strategy to be something more. A fullsize pickup truck isn’t in the cards, but the new CUV fills an important void in Subaru’s lineup.

The brand’s two most popular vehicles are the redesigned Outback and Forester CUVs, which sold 104,405 and 76,196 units, respectively, in 2011, according to WardsAuto data.

Building on that momentum by introducing a smaller, more dramatically designed ute makes perfect sense, especially for a brand so wedded to off-road capability and symmetrical all-wheel drive.

Where does the XV Crosstrek fit in the market?

It’s smaller than most CUVs, including the BMW X3, Audi Q5, Hyundai Santa Fe, Chevrolet Equinox, Honda CR-V, Mazda CX-7, Jeep Liberty and the all-new ’13 Ford Escape. Based on dimensions, the closest rival is the Chevrolet HHR, which is leaving the market.

The Hyundai Tucson, Volkswagen Tiguan and Kia Sportage are similarly sized, but heavier. Smaller competitors include the Nissan Juke and Mini Countryman.

Subaru introduces its small CUV just as the segment is heating up with new offerings such as the upcoming Buick Encore, BMW X1, Mazda CX-5 and Audi Q3. Critics might suggest the XV Crosstrek is a case of slicing the Impreza bologna too thin.

But based on skyrocketing popularity of small CUVs around the world, Subaru is probably on the right track.

tmurphy@wardsauto.com

 

’13 Subaru XV Crosstrek

Vehicle type:Front-engine, AWD, 5-passenger, cross/utility vehicle

Engine:2.0L DOHC “FB” H-4 boxer

Power (SAE net):150 hp @ 6,200 rpm

Torque:145 lb.-ft. (196 Nm) @ 4,200 rpm

Transmission:Continuously variable

Overall length: 175.2 ins. (445 cm)

Wheelbase:103.7 ins. (263 cm)

Width:70 ins. (178 cm)

Height: 61.8 ins. (157 cm)

Curb weight:3,086 lbs. (1,400 kg)

Base price:NA

Competition: Hyundai Tucson, Nissan Juke, Kia Sportage, Mini Countryman, VW Tiguan, Mazda CX-5

Observed MPG: 24 mpg (10 L/100 km)

Pros/cons

Brings more buyers to showroom   /   Could hurt Impreza 5-door sales

Loads of cargo flexibility   /  Charcoal interior drab

Better mpg with new FB H-4  /  Diesel engine isn’t coming