Even an earthquake and tsunami in Japan couldn't stop Subaru of America from making 2011 its third consecutive year of record sales.
Last year, Subaru sold 266,989 vehicles, and it has set a goal to boost U.S. sales to 350,000 units by 2016 while keeping a market share of at least 2 percent.
Subaru of America launched a new-generation Impreza last year, hired a new marketing chief and replaced its CEO. In 2012, two all-new vehicles will be added: the BRZ coupe and the XV Crosstrek crossover.
Kirk Schneider, chairman of the Subaru National Dealer Advisory Board and owner of Nate Wade Subaru in Salt Lake City, says the availability of those vehicles coupled with a return to normal inventory levels will likely mean another record year for Subaru dealers.
Schneider was interviewed by Staff Reporter Diana T. Kurylko.
How was 2011 for Subaru dealers?
It turned out to be a record sales year in spite of everything. When the tsunami hit, it looked bleak. It was a very, very good year for Subaru.
Subaru wants U.S. sales to rise to 300,000 units this year. What will drive that growth?
We sold over 266,000 cars in 2011 with all the inventory issues that we had. We have strong demand for the Outback and the Forester, and we just introduced the 2012 Impreza. We sold more than we ever had in a month. We have the introduction of the BRZ in spring and the XV Crosstrek in the fall, and that hopefully will let us get to that goal.
Your supply was restricted last year because of the earthquake and tsunami in Japan. How bad did it get? Has supply returned to normal?
The inventory levels have been as low as they ever have been in the history of the company. They were really low, and we were planning on selling whatever we got to hit that goal. During the summer it was bleak -- I would start a month with 15 or 16 cars.
They are building cars, and the production is there. The momentum is still there, and there is still high demand for our cars. They delivered as many cars as they ever had last quarter.
How did the November stop sale and then the recall of the 2012 Impreza sedan and hatchback, Legacy sedan and Outback crossover for brake problems affect sales? You were already short on product.
We had vehicles for a short period of time that were on a stop sale. Subaru really stepped up and managed to get us all the parts we needed within about three weeks to repair the cars we had. We would never been able to have the December we had if they hadn't reacted quickly and really taken care of us.
Did the delay in the launch of the new-generation 2012 Impreza affect your 2011 sales? Is there pent-up demand?
I am sure had we been able to launch that car in September we would have seen a larger increase in sales than we had.
We had a nice program so consumers could pre-order the car, and there were incentives available to them -- get a trek bike, skis, accessories and products for the car. There is a lot of pent-up demand for that car.
How will Impreza sales be this year? Has the car changed significantly enough to attract more and new buyers?
It has changed very significantly, and the initial response from consumers has been very strong. We are very pleased with the car, particularly because it has such a strong fuel economy rating. It is a roomier car. We will see a marked increase in sales.
What will the Impreza-based XV Crosstek due this fall do for Subaru?
It will increase the depth of our lineup and will add more incremental sales. It is different enough from the Impreza that it will be a benefit. It is more of a crossover than a wagon.
The all-new BRZ coupe goes on sale this spring. It's a 200-hp car weighing 2,700 pounds. What do you expect from it?
The volume on that car is not going to be high at all. It is more of an image car. It will have its own niche that it will fall in.
Will there be confusion and a loss of sales because your partner and competitor Toyota -- which spends considerably more on marketing -- has a nearly identical model?
They are our competitor, but the car is powered by Subaru.
It is important to understand the real engineering -- the engine -- is Subaru driven. We will not sell in as big a volume, but we are a much smaller company.
Is $25,000 a competitive price for the BRZ?
Everything is a little under wraps on the BRZ.
How has Subaru compensated dealers for the drop in inventory and the shortage of cars because of the recall?
Subaru late in the fall provided a strong program to provide financial aid to dealers. They had a formula based on the size of the dealer, location and inventory they had and provided cash payments to the dealers.
Did it make up for the loss?
No, but it was very generous. There were many factors that went into it. They were trying to help the dealers that had the fewest number of cars available to them to sell. We had some Sun Belt dealers whose inventories got very, very low.
What vehicles does Subaru need?
We would love to have a true seven-passenger vehicle.
Do you know when or if that will happen? Will the Tribeca SUV go out of production because it isn't selling?
No, I don't know when. The Tribeca is still in our product lineup through the next two years.
Does Subaru need more capacity than the 160,000 units it builds in the United States at the factory in Lafayette, Ind.?
Yes, I think they will need capacity.
When will it be added?
I don't know.
Do dealers have real contact with factory management?
Yes. Any Subaru dealer that wants to contact the factory and executive management just has to pick up the phone. They are incredibly responsive.
Are dealers satisfied with Subaru?
They are extremely satisfied.
The quality of the products is very high and we have had a sales increase four years in a row, and we are the only franchise in the industry that can make that claim.
Are Subaru dealers profitable?
On average it will be a record profit year for Subaru dealers.
Are they making money on new-car sales?
More dealers made money on their new-car departments than ever before.
How will Subaru make sure it sets another record this year?
Because this year we will head back to normal inventory levels, what they could do the most is simply keep their eye on the ball to make sure that this momentum will not close down.
Everyone will try to get back to where they were previously. We have to make sure our momentum is there -- even in the face of the dollar/yen situation.
Will you need higher incentives and more dealer cash?
We are asking that we are provided with whatever programs are necessary to maintain the momentum.
Does the certified pre-owned program work for dealers?
It is a good program. It was difficult in 2011 with the shortage of cars; prior to that it was a good program. It will probably have more strength in 2012.
Does the factory compensate dealers who meet used-car sales goals?
No special bonus.
What are Subaru dealers doing to attract more service business? Is the factory helping?
Most Subaru dealers have made significant dealership investments and improvements to make service more convenient.
The entire brand and dealer body are working very hard to upgrade our facilities.
Is Subaru doing enough of the right kind of marketing?
Yes, they are. Their brand advertising is a little different. It is more about what the car can do to enhance your life. Everyone can relate to their brand advertising.
Is Subaru doing enough Web marketing?
They have a good Internet presence and have been one of the leaders because our customers are so Internet savvy. Subaru has a really good co-op program for the dealers. They need to expand the guidelines to allow dealers to do more in that area as everything goes more digital.
Is Subaru doing enough in social media?
They are very active in social media. I am not sure there will ever be a time when we can say this is enough. c