Subaru of America Inc. is ranked within the top 10 automakers for sales.
In the next five years, its target is to be in the top 10 for sales, service and customer loyalty, says Tom Doll, president.
Doll, 58, expects Subaru sales growth to slow for the next few years to about 8 to 10 percent annually because of product constraints. But Subaru plans to add capacity at its Lafayette, Ind., plant.
Doll was named president last year. He is just the second American to hold that title. He was interviewed by Staff Reporter Diana T. Kurylko at the New York auto show last month.
Q: Subaru continues to set records. What do you expect for 2014?
A: 2014 will be another breaking year. We are off to a record start. We continue to have sales records in every month. Whereas other manufacturers stumbled a little with the weather, with all-wheel drive, we didn't. We did not skip a beat.
Earlier in the year, you said Subaru growth for the next several years will not be double-digit. Why is that?
We are running up against a capacity limitation. Until we have the additional capacity at our factory at the end of 2016, we will be a little constrained. This year, we will grow 8 to 10 percent in volume, and we are hopeful we will get some additional capacity out of [parent company] Fuji [Heavy Industries Ltd.] as we see what happens to other markets.
You will be launching a redesigned Legacy sedan in June. What inroads will you be able to make into the mid-sized sedan market?
Legacy sales are about one-tenth of what other competitors are selling in the mid-size sedan segment. We believe with the styling and interior, it is quieter and a better ride, and with our launch advertising to create awareness, we think we will have a great launch.
Will the new-generation Outback appeal to a wider audience?
We think that people who are continuing to discover Forester will continue to discover Outback. That is why we are conquesting so well with all of our car lines. Where else will you get this kind of functionality in a package like the Outback? That is why it does so well.
Why is the Impreza-based Crosstrek crossover striking a chord with new buyers?
It appeals to a younger, youthful type of a buyer. There is not a product like that out there. The Crosstrek has exceeded our expectations. We thought we would do 1,500 to 2,000 a month; we are doing 5,000 a month.
The Impreza sedan and five-door continue to sell well. There is nothing behind the car -- no marketing at all. We could sell more Imprezas and Foresters; we are limited. Impreza production will start in the United States in the fourth quarter of 2016.
How much of a growth spurt will you get when the additional capacity comes on stream at your Lafayette, Ind., factory?
An extra 100,000 of production for the Impreza in the U.S. There will be some substitution for what we get from Japan.
You have a new dealer program called Fixed Operations Expansion. Why is it necessary?
The code-name is FOX. It is necessary because of the significant increase in our units of operation over the past five years. Right now, we have 3.1 million units in operation. It has more than doubled in the last five years. We have sold over 1.7 million vehicles.
The retailers were spending so much of their earnings and cash flow, which have been good, to develop their front end and redo showrooms and hire salesmen, Internet folks and so forth. There were not enough resources left over to handle the back end.
So you will help them financially to expand their service capacity?
We said we will partner with you to expand the back end. This would suffice until after 2020, based on the current sales projections. It covers hardware and software. Hardware covers lifts, bays, tools and waiting rooms. If a retailer needs technicians or service advisers, it will help set off some of those implemental costs to the retailer so they can build their business fast. We want to get this implemented quickly.
Do you need to add stores in the United States?
Not right now, and strategically, the idea is to keep the total retailer count the same. Sales per outlet is the most important thing for us now. There is the potential in the future to add points. But right now, we want to maintain the dealer count between 625 and 630 and work on our sales per outlet -- that means they have new cars, good used cars coming back and a good service and parts business.
Do you need more used cars to keep that end profitable?
We don't do much in the way of fleet to daily rental car companies, and only 15 to 18 percent of our cars are leased. When used cars come on the market, they are significantly in high demand. We do some subvention for lease programs to maintain competitiveness because some other manufacturers are doing crazy things out there. We try to stay away from the $99 a month or from pulling forward sales. We like to play it straight.