Subaru 'not done yet' with sales surge

DETROIT — Subaru is targeting a 9 percent sales surge in 2017 for a ninth straight year of record U.S. results, despite a plateauing overall market.

And then comes the real big jump.

The arrival of a long-awaited three-row SUV in 2018 could add as many as 60,000 units annually, pushing the brand well above 700,000 units. The runaway sales are putting Subaru on pace to hit U.S. sales of 850,000 vehicles in 2020, up 38 percent from 615,132 last year.

“We’re not done yet,” Subaru of America President Tom Doll said of his brand’s red-hot performance, at the Detroit auto show. “I should be more cocky than I am, probably.”

Subaru is cashing in on the market shift to crossovers, with an all-wheel-drive lineup anchored by the Outback and Forester. The likely arrival of a redesigned Crosstrek this year will further bolster sales, as will the overhauled Impreza, the ad campaign for which begins in late February.

The biggest risk, Doll said, is the threat of dealership service capacity falling behind the rampant expansion.

“We have grown so fast over such a short time, the service part of our network hasn’t kept up,” Doll said. “That’s where we’ve made a lot of investments in fixed operations expansion.”

Dealers have until March 31 to sign up for the nationwide fixed operations expansion program. So far, about half of U.S. Subaru dealers have opted in, Doll said. Participation rates are highest in markets where Subaru has a historical presence and still sees robust growth, including around Philadelphia, Washington, Denver, Seattle and Portland.

So far, about 15 percent of the service facility expansions have been completed. The build-out should be finished in 2019, Doll predicted.