Ideas/thoughts on Subaru's upscale movement?

So has everything. Compare a 1977 Honda Civic to the car with the same name today (I get a chance to do this every weekend as we have 1977 Hondamatic Civic at the gliding field as a gofer car). Compare the early Toyota Corollas to the ones now. Hell, perhaps the biggest changes have been in the Daihatsu Charade or the Mitsubishi Mirage ("Colt" in the US???).

And not only have individual models moved upmarket, those models all used to be the mainstay of those manufacturers, but now they're all offering a lot of bigger and more expensive cars.

You are correct, Bruce. Did you see my previous post on this where I discussed justifications for change? I.e., none of us would seriously go back to the Model T Ford for a daily driver, etc. For a company to survive one ingredient is just like for you and I--staying "ahead of the state of the art".

Remember the days when auto makers used to shut the plants for 3 months while they retooled for "next year's model"? Well, they've gotten over that, thanks to the Unions, but they still come out with something "new for next year." Otherwise they are left in the dust.

Sure, I can talk about how great my 1964 356 Porsche was. But I wouldn't replace my 1988 Carrera with that 356! Or even my '03 Baja.

You and I, in our personal lives, will stagnate unless we continue to advance our career skills.

I'm not excusing attitudes of dealers, here in Coeur d'Alene, ID we have a great dealer and crew. But, if he moves up, and a hard knut takes over, things will probably change. Profit is the motive, just like a salary increase for you young people.

And that's enough outa me, I doubt anyone got this far anyway, Don

Bruce Hoult wrote:

The option of added power is welcome. The added bulk, weight and cost is not. IMO the risk is that Subaru is losing their quirky identity, which IS the patented appeal IMO.

"Moving Upscale" = more $$ for the same crap.

All automobile manufacturers have about the same costs. It costs about the same to design and build a Mayback as it does a Subaru - well, you know what I mean. In any event, there is WAY more margin on luxury vehicles than elsewhere. Why do you think a Ferrari Enzo sells for over $1,000,000?? Cachet, prestige, exclusivity. Now ask yourself, do I get "that" when I buy a Subaru? Sort of explains itself, now, doesn't it?

Better still, save yourself the agony of owning a Subaru in the first place. Get a Toyota or a Lexus. Ive got a 92 Loyale. Argh, I'm not going there ...

Yeah. Much better to overpay Toyota for *their* "cachet, prestige, exclusivity" than Subaru. Right?

- Greg Reed

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Does anyone really care about those ratings? They are so completely subjective. I have a 2000 Jetta with 80K miles (basically same as an A3), and it runs great, no major problems whatsoever. My 1999 Outback wagon on the other hand, has had nothing but problems. Replaced clutch at 35K miles, replaced center differential at 75K miles. Replaced oil pump gaskets at 60K miles.

- Manuel.

There's an interesting long-term ownership survey (1996-2001) for the Audi A4 in next month's Road & Track. Bottomline was not many problems new, but a few down the road. There's also a comparo article on Acura TSX vs. Subaru Legacy GT.

I recently acquired an 05 OBW after having had a 2000 OBW for over 4 years. No trouble with the 2000, a couple of minor things and of course, tires. I find the 05 quite different and much more refined in every way. I did not expect the change to be so dramatic but it was and it has convinced me that I made the right choice, again!

My brother in law was looking for a new wagon this past summer and he seemed interested in my 05, liked a lot of the features but ended up buying a Passat wagon. Why? Because he is somewhat status conscious and really could not see himself driving a Subaru. Guess he couldn't see it as an upmarket car.

Now, moving upmarket is not such a bad thing but I think Subaru has to shake off the image of being a cheap car and that will take some time.

Ron

So he passed up a Subaru for a VW? I feel about VWs as he does about Subarus. heh

You're not much of an engineer if you believe that.

Design costs are likely similar for a vehicle in the same class- a ferrari may be a more costly to design than the latest korean cheapbox. The difference is in the build. Labor and components. In the US the UAW bums get paid even on layoff, they have no accountability or pride in their products. Case in point : the GM plant in Linden NJ has a sign at the front employee lot " US made vehicles only". Since GM employees get a good discount and GM has a vehicle to suit every need from high performance(vette) to econotransport (cavalier) it seems odd that the majority of GM employees would not buy GM products (especially with discount). So to keep costs competitive GM, Ford etc may spend $5.00 per alternator to offset $20+ /hour wages while Toyota, Isuzu, may spend $7.00 per alternator and have a $10 /hour wage. That extra $2.00 on a component may be the difference between failing in three years or failing in 7.

My thoughts are that it costs more to design a flat-four with awd than a straight-four with front wheel drive. Quite a bit more.

The flat four has already been designed and only gets tweaked every so often so the costs of design have been amortized. Same with awd system.

My guess is that Subaru (at least with the Outback) has realized that they have a niche position and are never going to catch Honda and Toyota (unless Subaru lowers prices a lot and buys sales that way). So it may be smarter for Subaru (at least in the US) to move upmarket and compete with more prestigious brands, such as Audi and BMW. At that level, Subaru might sell fewer cars, but consumers might see Subaru as a more desirable, exclusive car and be willing to pay more $$$ to get that exclusivity. And while Subaru dealers might sell fewer Outbacks at the higher prices, the dealers might make more money per sale of each Outback.

Perhaps I'm wrong, but it seems to me that the Outback is the model that's moving upmarket, while other models, such as the Forester and Impreza, remain in their previous positions.

BTW, VW's doing something comparable, with the recent Touareg SUV, which starts at about $37k, and the big sedan (Phaeton? $70k+?). If I had had to predict VW's possible recent new models, I would've guessed SUV spinoffs of the Jetta and/or Passat, not pricey upmarket models. So I'd say that rather than produce more small- or medium-size "me too" cars that compete with Honda and Toyota, both Subaru and VW are trying to move upmarket to a level where consumers won't look so hard at the prices and profits per car are better. IOW, Subaru and VW don't want their cars to be commodities and have to compete so hard on price against honda and Toyota, who seem to be much closer to winning the market for affordable cars. And Toyota has such a wide range of models and brands now that it would be very hard for Subaru and/or VW to compete with Toyota.

Just my thoughts! ;-)

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Subaru might want to take that sort of exclusivity and make the cars more exclusive by raising the price.

But overall, isn't it especially the Outback that's going upmarket, no the other models?

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Thank you for the above. Very enlightening.

It seems to me that Subaru is going the way of VW and trying to get away from the low-priced market, where they haven't done well, and move to at least a few upmarket, low-volume, yet high-profit models.

I can remember when the Audi brand first came to the US and their cars were hardly more than rebadged VWs. Now Audi is an upscale brand and possibly the model for Subaru's future plans.

I'll probably buy a new car in the next few years and the Outback might fit my needs, but the price may already be too high for me.

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Not sure... saw an ad on TV last night for a Legacy sedan at US $28,000+ as shown, starting price US $26k. That's a lot of money for a car I'd put in the US $22k Toyota Camry or Nissan Altima class before the BMW/Audi class they were mentioning in the ad. But then again, buy a Subie, BMW and Audi, drive 'em head to head for 100k miles and then decide which, if any, one would/could drive another 100k and I may be way off base. What price can be placed on "perception?" (Like the premium price on the new Saabaru?)

Rick

I noticed my local Subaru dealer offering similar deals this summer.

I'll probably buy new wheels in the next year or two, and I was slightly tempted to look at an '04 Outback due to the recent low prices, but this year (due to personal reasons) isn't a good time to buy.

I'm also concerned that an Outback will be out of my reach in a few years when I'm ready to buy. While I guess it's possible I'll have more $$$ then and be able to afford the possible higher prices of the future, I think I won't be able to spend a lot more, and I probably also won't want to spend more.

To potential Outback buyers: Right now might be a good time to go look for unsold '04 Outbacks at Subaru dealers.

Subaru has always struggled in the US for various reasons, such as not having many models to choose from. Maybe they're thinking that they need a find a niche they can hold on to.

Given that Audi moved upscale and also stresses AWD, I can see that Subaru might want to take Audi's place. An acquaintance has an Audi Allroad, similar to the following:

Sounds like you're the kind of customer Subaru may be looking for now. If you compare a Forester or Outback to the comparable models from the above brands, the Subaru looks like a bargain. If Subaru can make more people feel that way, then Subaru won't have to compete with (for example) Toyota.

I'll probably be shopping myself in a year or two, and I'll probably look at a Honda CR-V vs. a Forester. If I want to go bigger, I'll probably look at a Honda Pilot vs. an Outback.

Interesting. Thanks. Sounds like Subaru is gaining some ground with folks like you, who want some luxury, sophistication, and exclusivity, and are willing to pay for it.

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