Subaru of America has just had a record sales year and introduced its first SUV, the B9 Tribeca.
The SUV is helping drive Subaru dealer profitability and is bringing new and young customers to the brand.
To further solidify its image, Subaru has begun a new national ad campaign and is changing the way it funds regional dealer advertising. Fred Adcock, executive vice president of Subaru of America, talked with Staff Reporter Diana T. Kurylko here.
Subaru had record sales in 2005. Can you top that in 2006 and what will be the driving force?
We plan for 211,000 cars up from 196,000 in 2005. The two principle drivers will be a full year for the B9 Tribeca SUV and growth of Impreza sales.
Last year we sold 15,000 Tribecas, and in 2006 we are forecasting sales of 28,000.
The other growth will be in Impreza, and we are looking for about 38,000 cars up from 34,000.
The Impreza is doing extremely well because we repositioned it last year. Legacy and Forester sales will be about the same as in 2005.
How profitable are dealers now with new vehicles such as the B9 Tribeca, and how key is their profitability since you want more of them to upgrade their facilities?
The Tribeca is the most profitable model that dealers have in their lineup.
Dealer profitability is at the top of our minds.
A healthy dealer organization is what you need to be successful these days.
We are working very closely with our national dealer advisory board to look at ways that we together can improve profitability.
Any specific new programs to achieve this?
We set up the Subaru advertising fund. Our independent distributors are not participating at this time.
We have put more money into tier 3 advertising - $500 per car is available in co-op support for the dealers.
This will help the dealers and drive more traffic to the dealership.
When did this start, and are you diverting money from national advertising to fund this program?
It started in February. We aren't taking anything away. The traditional support is still there.
What other measures are you taking?
We changed our advertising focus. We are trying to be more effective in delivering what distinguishes Subaru from the other manufacturers.
We are going to leverage our individual models with superiority claims - whether they be safety, performance, reliability or durability and deliver it with the consistent envelope of "That's what makes a Subaru a Subaru." c
You will hear it in every commercial we create. For example, we have the Legacy commercial on air now and it points out the car is the IIHS (Insurance Institute for Highway Safety) safety award winner. We bring the safety story that Subaru enjoys as a brand into that creative envelope. When the consumer sees that commercial they take away that Subaru has a tremendous safety story.
Is the B9 Tribeca meeting expectations?
We are pleased with the success of it so far. Over 50 percent of the customers have never owned a Subaru before and we would like to grow that to 60 percent in 2006. It is attracting a younger and more affluent buyer and more families.
Almost 60 percent of Tribeca buyers have a household income of over $100,000. We are cross-shopped against the Acura MDX and BMW X5 and other luxury SUVs.
You may e-mail Diana T. Kurylko at [email protected]