Ascendant Subaru Looks Forward to More Growth in 2014

To say Fuji Heavy Industries’ Subaru brand has been on a hot streak in the U.S. market is putting it mildly.

Subaru’s U.S. sales have gone up, up, up, climbing a whopping 79.7% from 2007’s 187,208 units to 2012’s 336,441, WardsAuto data shows.

The brand has reset its 2013 U.S. sales target four times, from 360,000 to 385,000 to 400,000 and now to 418,000, making it ever more likely it soon will reach the psychologically important half-million-mark in annual U.S. volume.

New products due in 2014 from the brand include next generations of the boy-racer favorite WRX and the Legacy midsize sedan.

Leading Subaru through its U.S. upswing has been Tom Doll, who has had nearly as fast a rise as the brand’s volume. Doll was named president of Subaru of America earlier this year after having been promoted in 2009 to chief operating officer.

In an email interview with WardsAuto, Doll discusses why he thinks the industry still can sell cars to young people, why the brand welcomes BRZ gawkers to its showrooms and why buying through a dealer remains the best way for Americans to purchase new cars and light trucks.

WardsAuto: Where are the capacity bottlenecks to increasing vehicle production? Will Subaru be constructing new lines, adding more shifts or crews at existing operations or otherwise increase flexibility to expand output in the coming year?

Doll: I would say currently the greatest bottleneck is our Impreza/Crosstrek/Forester lines. It’s a high-quality problem, and the Crosstrek has surprised us with its strong demand and of course, Forester keeps on setting sales records – (in October) it outsold the Jeep Wrangler. We have taken some efficiency actions to get more out of our current lines, and we have a plan to bring Impreza-based production to our U.S. plant in Lafayette, IN, from 2016.

WardsAuto: What current industry trend would you like to see go away?

Doll: The “young people don’t drive anymore” story (drives) me crazy. It’s too easy to join the random dots on those statistics, and I think sometimes the analysts who write these stories live in big cities and forget that it’s impossible to live in many parts of America without a car. Certainly our owners who use their vehicles recreationally know that. It’s a story that plays easily in the media, but I bet that almost all those non-driving teens will own a car at age 30.

WardsAuto: This year has been another successful year for Subaru in the U.S., topping five years of incredible growth. You’ve been there for all of it, so what has been the most pinch-me-I-must-be-dreaming moment for you?

Doll: I think it feels too much like hard work to ever feel like a dream! There have certainly been some amazing moments, though. The recognition for our vehicles by top magazines is always a thrill. That our retailers rate us No.1 in the industry according to (the) NADA is great, too. Inside the building last month we dropped balloons down our central 5-floor atrium to celebrate our fifth year of record-breaking sales. I remember standing there and watching all these blue and white balloons falling and our employees cheering and thinking how amazing it was. Then we were all back to work before the last balloon hit the floor.

WardsAuto: Do you have any regrets or do you think Subaru made any missteps as you look back on five years? Is the Tribeca too expensive? Is the BRZ’s radio too complicated?

Doll: I don’t like (having) regrets. It is a form of self-pity. I think there are things we could have done better. The Tribeca wasn’t really a mistake, (but rather) it was a victim of bad timing. We launched it just as the market for that product shifted in size and Tribeca got left behind. I think we could have done a better job understanding the market for infotaiment earlier, but we’ve got a hold of it now.

WardsAuto: The BRZ sports car, co-developed with Toyota, has been selling at a lower volume than Toyota’s own Scion FR-S, but I understand it is turning faster. Are you trying to get more production allotted to Subaru, and if so, how much additional volume might be possible next year? Are you confident the BRZ’s current sales pace will hold in its upcoming third year on the market?

Doll: BRZ will keep selling for us in good numbers. It’s an efficient car in terms of advertising. We don’t spend a lot on it and word-of-mouth drives a lot of the traffic. It’s a lowest close-rate car, because I think it brings a lot of visits to our retailers from people who just want to look at it. And that’s fine by us, because either we can sell them an Impreza or they’ll go away with a higher opinion of our brand, which means they are more likely to come back next time.

WardsAuto: Thanks to Tesla and GM’s new Shop-Click-Drive app, selling cars via the Internet or outside the traditional dealer structure is a hot idea. Given the fact your customers are a well-educated and tech-y bunch, this would seem to be a perfect venture for Subaru. Agree or disagree? Are there drawbacks the industry isn’t seeing?

Doll: The dealer-franchise system will remain the way the majority of U.S. consumers buy their cars. It’s stood in place for generations now and offers some great benefits. Personal interaction with the retailer helps form long-lasting relationships. We are definitely seeing that more and more people are doing their research online and getting closer to the moment of purchase at their computer, but we still think the best way to buy is through our retailers who create their own value in the products with their knowledge and service and create lasting relationships with the customer.

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