Subaru Riding Positive Press, Consumers Downsizing, to Gain Sales

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New York Int’l Auto Show

NEW YORK – The top executive at Subaru of America Inc. cites value and consumer downsizing for the auto maker’s surprising strong monthly sales gains.

“There’s a flight to value right now in the automotive market, and we’re not out there with a large amount of incentive dollars,” says Tom Doll, executive vice president and chief operating officer.

“Our cars, we think, provide value,” he tells Ward’s at the international auto show here after unveiling the new-for-’11 Subaru Impreza WRX STi sedan.

Doll cites “Top Safety Picks” for its entire lineup from the Insurance Institute for Highway Safety, third-party endorsements and rising residual values.

“You have an assurance program when you buy our cars, because they hold their value so well,” he says, referring to the Hyundai incentive allowing buyers to return their car if they lose their job.

“And in this market today, when people are coming out of SUVs and trucks, we’re filling that void.”

Subaru reports U.S. sales today of 23,785 vehicles, up 40.8% from year-ago, according to Ward’s data. First-quarter deliveries rose 38.4% to 57,494, marking the auto maker’s best 3-month performance ever.

Subaru has reported sales gains in eight of the last 10 months, an impressive stretch against an industry tamped down by the recession.

Doll says the positive press layered on Subaru recently, at the same time auto makers such as General Motors Co. and Toyota Motor Corp. grab headlines for financial and safety woes, are paying off.

’11 Subaru Impreza WRX STi sedan.

“Our cars have always done well in the used market,” he says. “Our cars have always done well in crash-testing. But now we’re finally being recognized, and that’s driving a lot of people to take a look at our products.

“And we’ve got cars with all-wheel-drive capability and outstanding fuel economy – what’s not to like?”

Japanese parent Fuji Heavy Industries Ltd. recently released its first Subaru horizontally opposed diesel engine in Europe. Dolls says the engine is driving sales gains on the continent, but does not express confidence it will arrive stateside anytime soon.

“The emissions requirements in the U.S. are significant,” he says. “And given the price of diesel fuel, where it is right now, it really does not pay to bring the vehicle into the U.S.”

A gallon of diesel fuel in the U.S. currently is averaging $2.95, according to the American Automobile Assn., whereas regular gasoline costs $2.80.

“We’re trying to see what happens,” Doll says. “As the market sorts itself out, we’ll get ready, and then look at bringing the car (here).”

Doll says collaboration between Fuji and majority-shareholder Toyota continues over a potential Subaru hybrid for the U.S. market. While he offers no timetable, he does suggest an electric vehicle also could be in the works.

Last year, Subaru launched the Stella EV in Japan. But sales are limited to the Tokyo area so engineers can provide technical support.

“Once we clear testing hurdles, we’ll be able to bring those products into the U.S.,” Doll says.

The Stella, powered by a lithium-ion battery and 47-kW (63-hp) motor, has a top range of 56 miles (90 km).

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