Subaru's 7-seater poses big design question

A Grand Outback? Or a larger crossover that is more distinct than Subaru's popular midsize vehicle?

That's the decision Subaru is grappling with as it develops an all-new crossover bigger than the strong-selling Outback for sale in about two years. The seven-seat crossover will be produced at Subaru's factory in Indiana.

Subaru is deciding whether to make the new crossover a "big brother" with Outback's rugged and off-road-worthy styling, company executives said. Or the new vehicle could get distinctive styling similar to the strategy with the Forester, a compact crossover smaller than the Outback.

One thing Subaru doesn't want to do is doom the new crossover with a polarizing design like it did with the ill-fated Tribeca. The Tribeca went out of production in January 2014 because of slow sales.

There is no doubt that the seven-seat crossover will compete against the Toyota Highlander, Nissan Pathfinder and Honda Pilot because "they are so strong," said Nobuhiko Murakami, senior vice president of global marketing for parent company Fuji Heavy Industries.

"How can we differentiate the position of our product?" he said "That is the fundamental strategy."

The new all-wheel-drive crossover will be roomier than the Tribeca and have three rows of seats. "But how we will arrange the seats is still under discussion," Murakami said.

One thing is certain: The new vehicle is being designed primarily for the U.S., Murakami said. "Our resources are limited, and we have to develop our product by putting our major focus on the United States. This is the only way we will survive."

The Tribeca launched in 2006 was criticized for its quirky front end, especially the grille that drew on the company's aircraft heritage. The styling was too polarizing for families, the target audience for the seven-seater, and Subaru gave the Tribeca a face-lift two years later.

Subaru executives would not give sales forecasts for the new large crossover. Subaru had targeted annual Tribeca sales of 36,000. It sold 732 Tribecas last year and 1,598 in 2013.

This U.S. focus also means the compact Levorg wagon based on the Impreza won't go on sale in the United States, Murakami said.

The Levorg is a replacement for the former Legacy station wagon and was initially developed for Japan, Murakami said. Subaru has since decided to sell it in Europe, and the European version was unveiled at the Geneva auto show this month.

Subaru decided the priority for the United States was the bigger Legacy sedan that's designed primarily for that market, he said.