Subaru plans to increase U.S. production and imports from Japan by 20 to 25 percent in the fourth quarter to keep up with rapidly growing sales, especially in Sun Belt states.
Timothy Colbeck, senior vice president of sales at Subaru of America, said the Japanese brand aims to increase U.S. inventories to about a 60-day supply, from 33 days on Oct. 1. He said Subaru's current stockpile of vehicles is "obviously a little lighter than we would like to have."
Even with scant inventories, the company is posting big gains. Sales increased 47 percent in September, bringing the brand's total through the first nine months of 2010 to 193,614 vehicles. That's up 22 percent from the year-earlier period in an overall market that has grown 10 percent.
"We've established sales records in just about every month this year," excluding August, Colbeck said. "As we get those increased shipments, dealers are just turning them very quickly."
Subaru has been outperforming the U.S. market for the past two years. It was one of only two brands to report a sales gain in 2008 and one of three to achieve a sales increase in 2009, along with Kia and Hyundai.
"We're looking at establishing a full-year record and hopefully continuing our string of records in October, November and December as we ship this greater number of cars," Colbeck said.
Subaru's plant in Lafayette, Ind., builds the Legacy sedan, Outback wagon and Tribeca SUV. Colbeck said line speed increases enacted this year and the recent hiring of more full-time workers has increased the plant's annual capacity to about 150,000, from 100,000 at the start of the year.
Sales of Subaru's Indiana-built vehicles totaled 96,438 in the first nine months of the year, or about half of the company's 2010 total. In the same period last year, the locally built vehicles represented about 38 percent of sales.
Subaru has nearly doubled its U.S. market share since 2007. From 2001 to 2007, that share hovered at 1.1 to 1.2 percent. The share was 2.2 percent through September of this year, and Colbeck expects the brand to maintain that level through the end of the year.
He attributes Subaru's market-beating run since the beginning of 2008 to product introductions, consistent marketing and an improved dealer body in Sun Belt states.
Subaru launched a redesigned Forester crossover in 2008 and a restyled Legacy and Outback in 2009. Outback sales were up 95 percent through September this year to 66,384 vehicles, while Legacy sales gained 32 percent to 28,165. Forester sales through the first nine months have gained 6 percent over 2009.
In Sun Belt states, Colbeck said Subaru has increased sales 37 percent this year.
"If you look at average growth over the past three years, it's Los Angeles, Dallas, Florida and Atlanta that are some of our fastest-growing territories," he said.
Subaru, which has 618 dealers, has replaced more than 25 percent of its network since 2006. Most of the changes happened in warmer markets where Subaru historically has had less market penetration, Colbeck said.
"We've got more commitment from these newer new dealers that have joined us vs. the ones that they've replaced," he said.
Historically, Subaru's strongest markets have been in colder regions such as the Northeast, Northwest and Rocky Mountain states, where the brand's standard all-wheel drive comes in handy.
But in warmer regions, where Subaru has had a smaller presence, some dealers with other franchises treated their Subaru stores as an afterthought, Colbeck said.
Said Colbeck: "The newer dealers are more focused, and they treat us as a top-tier brand. Over the course of this time frame, we've gone from the 21st ranking brand of the industry to the 10th."