Friday, May 21, 2010

Business Week Recognizes Subaru's Share The Love Strategy

The following article is from Business Week, about Subaru of America's Share The Love Strategy!

At Subaru, Sharing the Love Is a Market Strategy
The quirky car brand barreled through the recession
By Jeff Green and Alan Ohnsman

While much of the U.S. auto business is just beginning to emerge from retrenchment mode, sales at Subaru of Glendale are climbing every month—and owner Sam Ershadi is even considering expanding his California dealership. "Our customers were not affected by the recession," he says. "They have a better financial situation."

By courting financially solid buyers with a taste for the quirky, tiny Subaru of America sped through 2009, logging record sales and market share along the way. Last year Subaru became the 11th most popular U.S. auto brand, up from No. 19 just a year earlier. Record sales in cities like Los Angeles, Atlanta, Dallas, and Orlando helped make Subaru the fastest-growing mass-market car brand in the U.S. for the last two years. It's the growth leader again so far in 2010—up 41 percent through April. For the first time, its unit sales exceed those of such better-known brands as BMW, Lexus, Mazda, and Volkswagen.

Subaru, the auto unit of Japan's Fuji Heavy Industries, has long been popular with a core of professorial drivers in tweed in the Northeast and flannel-clad outdoor enthusiasts in the Northwest. Lately, however, the carmaker has been aggressively moving beyond the snowy, soggy, and mountainous regions that are its stronghold. "People have been finding out about them outside of New England," says Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass. "They are quietly successful, and their buyers appreciate that. They haven't abandoned their core."

Customer Profile
Subaru's secret is that it understands the customers who drive its cars and has gotten smarter and more aggressive about reaching out to new ones who would feel at home as part of that clan. The company has the type of customer base that's particularly attractive to carmakers. The average household income of a Subaru owner is $88,000, the same as Honda Motor (HMC) and $10,000 more than Toyota (TM), says Alexander Edwards, president of market researcher Strategic Vision. Plus, Subaru buyers are three years younger than the industry average and a quarter more likely to have a college degree.

They are a thrifty lot, traditionally buying less car than they can afford. Some 36 percent pay cash. Subaru has played to that frugal bent by cutting roughly $1,200 from the $26,342 average price of its cars in 2007. Those cuts haven't killed profit margins because the lower prices allowed Subaru to reduce sales incentives and rebates on its cars substantially. Currently, the company gives about $1,333 per vehicle in incentives—the lowest level of any major car brand, says Thomas Doll, chief operating officer. That's almost half the $2,310 in incentives Toyota currently gives its buyers.

Much of the automaker's marketing focuses on cementing its connection to customers. Subaru's research shows them to be an eco-friendly bunch who value the freedom to go where they want, when they want. Unlike luxury car buyers, Subaruers are "customers who are not buying things, but experiences," says Chief Marketing Officer Tim Mahoney. That meshes nicely with Subaru's all-four-wheel-drive lineup, showcased by TV ads that star one of its cars caked with road grit, being applauded by admiring spectators on a suburban Main Street. The tagline: love. "In their marketing they've been focusing on what creates love between the owner and the automobile," says Edwards. "The 'share the love' campaign has been effective. They play up fun, the adventure you can have in a Subaru."

"Poor Man's Audi"
Last year the company sold a record 216,652 cars in the U.S., including the Legacy sedan and the Forester and Outback sport-utility vehicles. It's upping production 40 percent this year at its Indiana plant, which also builds cars for Toyota, Fuji's largest shareholder. The plant is located in an official wildlife preserve with no waste sent to landfills, in keeping with Subaru's support for causes such as the American Canoe Assn. and the Leave No Trace Center for Outdoor Ethics.

Such brand-building moves help Subaru win new customers on the cheap. It spends about $154 million a year on U.S. advertising—$100 million less than the Volkswagen brand (which sells about the same number of vehicles in the U.S.), a fifth of what Hyundai spends, and a fraction of the $2.2 billion plunked down by General Motors, the industry spending leader, according to Kantar Media. "They're kind of the poor man's Audi," says James Bell, executive market analyst for Kelley Blue Book in Irvine, Calif.

To keep growing, Subaru would benefit from adding a compact-class car and hybrid to its U.S. line, says Bell. Subaru and Toyota have said they're working together to develop a small, sporty car that both will sell. Fuji Heavy President Ikuo Mori has said the company's first hybrid will arrive in 2012.

One thing won't change: Subaru's emphasis on the relatively upscale buyer who values freedom and frugality. Subaru managers think that's a market of up to 60 million buyers—far larger than the niches of academics, tree huggers, and gays and lesbians that it's long been associated with.

"They are basically adding people who are Subaru buyers in their hearts, but don't know it," says Edwards of Strategic Vision. By Subaru's math, with 2.4 million Subarus now on the road, that leaves 57.6 million customers to go.

The bottom line By maintaining the quirky persona of its brand and keeping prices low, Subaru has quietly, but aggressively, increased growth.

Green is a reporter for Bloomberg News . Ohnsman is a reporter for Bloomberg News .

Friday, May 14, 2010

Subaru Announces Pricing for 2011MY Legacy and Outback Models

-- Record-breaking Subaru Outback price increase held to $200 --

Subaru of America, Inc. today announced 2011MY pricing for its best-selling Legacy and Outback models. Launched in 2009, the Legacy® and Outback® have been key drivers in Subaru's record sales success with Legacy showing an 87% increase in year-to-date sales and Outback sales more than doubling with a 128% increase year-to-date.

For 2011MY, both models receive equipment enhancements including manual-folding exterior mirrors. Also, models equipped with harman/kardon audio (available on Premium models and standard on Limited models) now feature XM® Satellite Radio and a three-month trial subscription.

A new color, Caramel Bronze Pearl, replaces Harvest Gold Metallic on both models and is paired with an Ivory interior. Ruby Red Pearl, previously only available on the Legacy and Tribeca, is now available on the Outback and comes also with an Ivory interior.

As with all Subaru vehicles, Symmetrical All-Wheel-Drive is standard on both models, which helps driving performance by enhancing traction regardless of weather conditions.

2011 Subaru Legacy

Subaru maintains its focus on value, and for 2011MY, Legacy continues with a starting price of $19,995 for the 2.5i. The Legacy 2.5i Premium also remains unchanged at $20,995, and the starting price for the Legacy 3.6R holds at $24,995. Limited trim models are subject to a $300 price increase due to the inclusion of XM Satellite Radio. The Legacy 2.5i Limited is now $25,295 while the Legacy 3.6R Limited is $28,295.

For the 2011 model year, the Legacy 2.5GT sports sedan will be offered exclusively in Limited trim. It now includes a standard power moonroof as well as XM Satellite Radio, fog lights, new simulated carbon-fiber dashboard trim, silver contrast seat and armrest stitching, and aluminum pedals. It comes with a starting price of $31,395, an increase of only $405, which still keeps it priced well under most competitors' offerings.

2011 Subaru Outback

The Subaru Outback, Motor Trend's 2010 Sport/Utility of the Year, receives a modest $200 price increase with the Outback 2.5i now starting at $23,195 and the Outback 2.5i Premium priced at $24,495, still keeping the cost well under most mid-size crossover or wagon competitors.

A new feature for Outback models, a Rear Vision Camera, is added to Premium and Limited models - bundled with the Power Moonroof Package. The exclusive Rear Vision Camera includes an Auto-dim mirror with Homelink, compass display and a 3.3 inch hi-resolution display in the mirror. This convenience upgrade adds $450 to any Outback that features a Power Moonroof.

The Outback 2.5i Limited, with standard Lineartronic CVT, now starts at $28,495 while the six-cylinder Outback 3.6R is also competitively priced at $28,195. The Subaru Outback 3.6R Limited, which continues to be in high demand, now has a starting price of $31,495 and includes standard XM Satellite Radio.

Award-winning Products

The 2010 Subaru Legacy and Outback have recently received significant awards. Both vehicles were named 2010 Top Safety Picks by the Insurance Institute for Highway Safety (IIHS) and as 'Bests' in their class by Kiplinger's Annual Buyers Guide. The Legacy was also named one of the 'Best Family Cars of 2010' by both Parents magazine and Edmunds.com.

The destination and delivery charge is $725 for all 2011MY Legacy and Outback models in the contiguous 48 states. The MSRP of 2.5i PZEV (Partial Zero Emissions Vehicle) models remains $300 more than the federal specification model.

harman/kardon® is a registered trademark of Harman International Industries, Inc.

XM Satellite Radio® XM is a registered trademark of XM Satellite Radio, Inc.

Saturday, May 8, 2010

Service and Parts Award Winners - 2009! Congratulations to Premier Subaru











Premier Subaru wins Subaru of America Awards for Service and Parts Department Excellence in 2009!

On Tuesday, May 2, 2010, Brian Giffen, District Fixed Operations Manager of Subaru of New England, came to Premier Subaru to present Premier Subaru's Service and Parts Departments with Summit Awards, representing Service and Parts Department Excellence for 2009.

Congratulations are in order for Dennis Cullen, the Premier Subaru Service Director, Gary Christiansen, Premier Subaru Service Consultant and David Harger, Premier Subaru Parts Director.

The Premier Subaru Service and Parts Teams are proud to assist you in any way.



Sales Up Again for Subaru of America!

On Tuesday, May 2, 2010, Subaru of America, Inc. announced that sales for April 2010 were up 48-percent over April 2009 with 23,198 units sold. Sales for the 2010 Subaru Outback were more than double the previous year with a 133-percent increase, while the 2010 Subaru Legacy posted a 50-percent increase over April 2009. This also marks the best-ever April for the company. The previous April record was established in 2008 with 16,771 units sold. Year-to-date sales increased 41-percent with 80,692 units sold versus 57,181 units over the same period last year.

"The Subaru brand is now consistently achieving new levels of sales, which is a tribute to our strong product line up," said Tim Colbeck, senior vice president of sales, Subaru of America, Inc. "We are significantly ahead of last year's record sales pace and expect the momentum to continue."

"Our sales reflect the outstanding efforts of our retailers, the appeal our products represent to our customers and the recognition our vehicles continue to earn from opinion leaders," said Thomas J. Doll, executive vice president and COO, Subaru of America, Inc. "For instance, Kiplinger's Personal Finance recently awarded the 2010 Subaru Legacy and Outback vehicles with its Best vehicle awards in their categories, while Parents Magazine and Edmunds.com just named the 2010 Legacy one of the Best Family Cars for 2010."

Premier Subaru in Branford, Connecticut, is proud to be one of America's leading Subaru dealerships. We thank our clients, and our prospective clients, for the opportunity to exceed your expectations.