Subaru looks to the Sun Belt for growth
Tom Doll: More training sessions
DETROIT -- Subaru aims to generate 20 percent of its U.S. sales from Sun Belt states in the next two years, up from just 15 percent now, as it chases a fourth straight year of record sales.
The brand also is racing to improve dealer service throughout the country in anticipation of an increase in service business that will result from the rapid sales expansion.
Subaru plans to boost spending on training and other improvements at least 18 percent this year to prepare its dealer network for repair work and customer service, Subaru of America Inc. COO Tom Doll said at the Detroit auto show. Improving its retail network and expanding in the South are key elements of Subaru's goal to reach U.S. sales of 350,000 units by 2016, while keeping a market share of at least 2 percent.
Subaru sales climbed 1 percent to a record 266,989 units in 2011, trailing the market's 10 percent increase, partly because the March 11 earthquake in Japan disrupted production. The maker of all-wheel-drive crossovers and SUVs expects record sales of 320,000 vehicles in 2012.
Growth in the South will underpin the expansion.
Subaru gets about 15 percent of its sales in the South today vs. about 9 percent two years ago, Doll said. That will rise to 20 percent in the next two years, he said.
In the longer term, Subaru wants to get a third of its sales from the region.
Sales in the South are benefiting from former Saturn dealers that Subaru picked up after General Motors killed that brand. Subaru picked up about eight former Saturn dealers in the Carolinas and Florida, replacing less successful dealers in its network.
The former Saturn shops generate a 33 percent increase in sales over the dealers they replaced, said Bill Cyphers, senior vice president of sales.
Subaru ended 2011 with 155 dealers in the Sun Belt states, up from 130 at the end of 2007, Cyphers said. Since 2009, the brand has filled 38 open sales points in the region and experienced another 19 buy-sells, in which an existing dealership changes ownership, he said.
Subaru is shooting for a nationwide network of 630 dealers by 2015, compared with 620 today.
Subaru also is focusing on improved dealer service.
Because the brand has boosted sales 50 percent over the past three years, executives expect to see service rates double in the next three years as the expanding fleet ages.
"Our ability to continue to grow our business will depend on how well we can get these customers serviced," Doll said. "We're conquesting so many competitive brands, we have to make sure they have a good experience with us. We've got to get our dealers thinking different."
Last year, Subaru added four training managers to the 13 it already had nationwide, he said. And this year, it plans to add four training locations to the 10 it has.
Subaru said it expects to run 750 training sessions in 2012 for a total of 9,300 hours of instruction, up from 588 sessions and 6,260 hours in 2010.
Subaru also will keep pushing dealers to improve customer waiting areas, Cyphers said.
Deslership improvements will be covered by dealers. But Doll estimated that Subaru will increase spending on training 18 to 20 percent this year.
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