Subaru Outback: Enough to Save the Company?
If you're just glancing at the overall numbers, you might think Subaru sales are just about to go viral in this country. Last month, Subaru reported 35 percent more sales than the same time last year, set a new record for units sold during May and also is on a record-setting year-to-date pace so far in 2010. In terms of individual nameplates, the Subaru Outback, Subaru Forester and Subaru Legacy all set new May marks for vehicles sold as well. But the automaker's recent positive sales trends, as regular Krome on Cars readers may remember, are hiding a growing problem for the company: A growing reliance on the Outback to drive sales.
For May, the Outback was up 124 percent, essentially in line with the robust 127 percent year-to-date sales increase the vehicle has shown through May. The next best May performer for Subaru was the Forester, up an above-average 29 percent for the month, following boosts of 24 and 28 percent in March and April, respectively. So, I'm going to say Forester has stabilized its sales rate for now.
The midsize Legacy sedan notched a 19 percent sales bump last month, but that was merely keeping pace with the overall industry's rate of growth. Perhaps more significantly, after ringing up triple-digit increases through March, Legacy sales were up "only" 50 percent in April. In other words, the Legacy's growth rate was more than sliced in half between March and April, and again between April and May.
As for the Impreza, April was the only month it increased sales by as much as 16 percent. Subaru's compact was even for May and is up a bare 1 percent for the year. Frankly, that's a failing grade in today's market. Which, I suppose, would mean the Tribeca should be expelled from the Subaru lineup entirely. Except for January, when the big crossover saw sales sink 38 percent, every other month has resulted in drops of between 57 and 66 percent for 2010.
As I mentioned last week in discussing May sales, it's starting to appear as if one of the bigger stories coming out of the global economic meltdown is a resurgence in the strength of the U.S. automakers. Consider this: Among the manufacturers formerly known as the Big Three, the worst company-wide May sales results were put up by Ford, and that automaker was still up nearly 23 percent.
Now, if these kinds of numbers are going to cause significant challenges for the high-volume foreign companies, just imagine what they'll do to the smaller ones. These low-volume manufacturers have generally survived in the U.S. by staking out the small-vehicle segments, especially the midsize, compact and subcompact car categories. Honda and Toyota, and to some extent Nissan, have historically ruled these segments, and without strong entries from General Motors, the Chrysler Group or FoMoCo, there was enough room for Mazda and Suzuki and Subaru and the like to attract some customers, too.
But today, those are exactly the segments in which the American companies are now putting the majority of their resources. Plus, they'll also have to deal with Hyundai, and to a lesser extent Kia, two companies that somehow managed to boot-strap themselves into the near mainstream.
Let's get back to Subaru for a moment. Is it a surprise that sales of the Legacy, that automaker's midsize sedan, are showing weakness now that that segment boasts not only the Honda Accord, Toyota Camry and Nissan Altima, but also stand-out competitors like the Ford Fusion, Chevrolet Malibu and Hyundai Sonata? And the apparently phoenix-like Chrysler Sebring and Dodge Avenger?
Or remember the Suzuki Kizashi? Introduced to an avalanche of critical kudos, it's been buried in the marketplace by the same midsizers I mentioned above: A grand total of 474 customers picked the Kizashi in May; Honda sold more than twice that many Accords every single day in of that month.
Or how about the Mazda MAZDA6? Another midsize sedan that gets much love from the press, the MAZDA6 improved its May numbers by nearly 30 percent in May'”but that's an anomaly for a car that's seen its year-to-date sales numbers still down by 5.6 percent.
And the industry is primed to see this sort of thing happen to the compact and subcompact segments, too, with entries like the Ford Fiesta and Focus, next-gen Chevrolet Aveo and new Chevy Cruze, and Chrysler's Fiat 500 all set to launch in the near-term future.
It's no coincidence, then, that the Outback is leading the way for Subaru. As essentially a four-wheel-drive station wagon with a little extra ground clearance, it's the most unique vehicle in the automaker's lineup and faces almost zero direct competition.
The bottom line here: The overall U.S. auto market is definitely growing, but the competition in the segments in which the smaller automakers traditionally do their best is growing even faster. And if things continue going the way they have been, "faster" may also describe the rate at which these low-volume automakers will start getting squeezed out of the picture.