Subaru Focuses on Improving Dealer Service; Most Models to See Sales Gains

DETROIT – After selling a record number of vehicles in each of the past three years, Subaru now is focusing on the service its dealers provide buyers when they return their car for maintenance.

“These cars we sold back in 2008 and 2009 and 2010 have to come back for service,” Tom Doll, chief operating officer for Subaru of America, tells WardsAuto in an interview here. “We’ve got good experience in the front end, (but) the back end potentially needs a little bit of help and some focus.”

Subaru delivered 266,989 light vehicles in the U.S. last year, topping 2010’s 263,820 and well ahead of 2009’s 216,652, WardsAuto data shows.

The auto maker’s plan to increase deliveries to as many as 320,000 units this year and refrain from opening many new sales outlets should boost dealer profitability and allow for added investment in service departments, Doll says.

“We think if we can hit this number for next year, that’s a good sales number per dealership,” he says. “The dealers can begin to earn the types of return they need to earn, so they can do the types of things we need them to do, which is invest further in the franchise (by hiring) technicians.”

Other than filling open points, Doll sees few new U.S. dealerships for the company this year. Subaru has 620 retail outlets, up from about 610 a year ago.

The 320,000-unit sales goal comes after Japan’s earthquake and tsunami last March derailed hopes of a 300,000-unit year in 2011. Subaru was unable to benefit from its next-generation Impreza compact sedan and wagon in the U.S. or fulfill orders for the older but still-popular Forester compact cross/utility vehicle.

The three models are imported from Japan, although talks continue about moving their production to Subaru’s Lafayette, IN, plant, to guard against the strong yen, Doll says.

Having a full year of the new Impreza and plentiful inventory of the Forester should drive the brand’s sales this year. “Hopefully, we can (deliver) somewhere between 50,000 and 60,000 (Imprezas)” in 2012, he says.

Subaru sold 41,196 Imprezas in 2011, a 5-year low for the model, WardsAuto data shows. Doll believes Forester deliveries can be boosted to 85,000-90,000 units, compared with last year’s 76,196.

The midsize Legacy sedan and Outback wagon also will grow this year, he says, forecasting 45,000-50,000 sedan sales and 110,000-120,000 wagons for 2012. Subaru sold 42,401 Legacy sedans in 2011 and 104,405 Outbacks.

Additionally, the auto maker will see some volume from the new BRZ sports car, on sale in the spring, and the XV Crosstrek small CUV, on sale in August or September.

The BRZ is a low-volume model, with 5,000-7,000 annual sales forecast. The XV, due to its late-in-the-year launch, likely will sell just 5,000-10,000 of its targeted 25,000-30,000 12-month volume in 2012.

All of these current offerings, which Doll says are in growing segments, should be enough to increase Subaru’s sales in the coming years. “This is a brand that really doesn’t know yet what the top is, because every time we get additional product we sell it,” he says.

Doll eschews talk of entering new segments, saying a subcompact would be too expensive once the brand’s signature all-wheel drive was added. A pickup truck and a luxury model, such as a competitor against the Hyundai Genesis, also are non-starters.

Regarding a luxury model, Subaru spokesman Michael McHale says just because Subaru buyers can afford to spend more on a car doesn’t mean they necessarily want to.

The only Subaru model not expected to increase sales this year is the Tribeca 7-passenger large CUV. Doll declines to discuss the vehicle’s future, but says the segment is important because of family-minded Generation Y buyers’ fervor for such models compared with minivans.

Subaru delivered 2,791 Tribecas in 2011, up slightly from 2010 but nearly half of 2009’s volume. Doll reasons that a Tribeca sale lost is a Legacy or Outback sale gained. All three are built in Lafayette and jockey for capacity.

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