High-flying Subaru to add models, capacity

Subaru is very well-known for its AWD SUVs in North America. However, the ambitious company is launching a new business plan that is going to increase its global sales 33% by the end of 2020. In order to achieve that, Subaru will add a plug-in hybrid and a new seven-seat SUV into its lineup. It is projected that Subaru’s North American sales will increase from 478,000 to 600,000 until 2020. With Toyota pulling out its contract production in one of Subaru’s plant, Subaru will have an additional capacity of about 100,000 vehicles each year. In order to meet the new CAFE standard, Subaru will be putting out a plug-in hybrid along with several other major parts upgrades. Interestingly, the model is using Toyota’s hybrid technology.

I personally think Subaru should put out a pickup truck instead of a seven-seat SUV exclusively for North America. A new and less expensive convertible would be interesting as well. However, as we learned in class, smaller cars are much less profitable compared to larger vehicles, so I can see why it is not in Subaru’s consideration.

Source: http://www.autonews.com/article/20140512/OEM01/305129943/high-flying-subaru-to-add-models-capacity

6 comments to High-flying Subaru to add models, capacity

  • Peter Wittwer

    I don’t think a pickup truck would be a smart car for Subaru to add to its lineup. Although pick up trucks are very successful in North America, the companies that dominate the pick up truck market are Ford, Chrysler, GM, and Toyota. As you can see from the attached link, the most popular pick up trucks in North America are Chevys, Fords, Dodges, and GMCs. The Toyota Tundra and Tacoma have a decent amount of market share, but after that there is a huge drop off in the success of other brands in the pick up truck market. That’s why it’s hard to believe that if Subaru came out with a new pick up it would have success in North America. Subaru would be new to the market, not very trusted, and also a foreign brand. Subaru has a reputation for producing family friendly cars, it’s not notorious for producing tough, reliable trucks. With a very heavy advertising campaign as well as an innovative and reliable product, maybe Subaru could gain market share in the North American pick up truck market. However, I don’t believe this will happen since Subaru has little knowledge how to create and market a trucks and American consumers do not have reason to trust Subaru trucks as superior to other models.

  • Zachary Durkin

    I think a Subaru pick up could do well in North America. Americans recognize Subaru as a very reliable brand, and as long as the truck is competitively priced, I believe it would do very well in a recovering American economy.

  • Kade Kenlon

    Subaru is better off producing a 7-passenger vehicle considering their past line up of cars. Subaru has much more experience producing cars similar to an SUV and would probably struggle producing a truck especially when the competition is fierce. According to Bill Cosgrove, a former Ford executive, an SUV is much less difficult to produce than a smaller, compact car because the is more margin for error.

    A convertible may not earn them the revenue that they are looking for that they would probably find from the SUV. The convertible would be more of a new option rather than a new car considering that Subaru is accustomed to producing smaller cars.

  • Louis Ike

    I disagree with the idea of Subaru venturing into the production of a pick up truck. In my experience, Subaru has a very loyal consumer base that consists of a very specific type of people, and I believe this consumer base would be much more interested in a seven seater SUV than a pick up truck. I am ,however, very interested to see how Subaru goes about increasing its sales so significantly, and how effectively the plan plays out.

  • Michael Barry

    I think it is important to look at Subaru’s cliental when deciding what the next logical model is. Subaru’s most loyal customers tend to be outdoorsy, environmentally aware people. They all would likely respond well to electric options, and would probably look to Subaru because that is where their loyalty lies. A even seat SUV also offers a smaller, more eco-friendly alternative to standard SUVs, so past or potential Subaru customers would find this appealing if they were to need more space. I think with the way Subaru has branded itself, an efficient SUV would be received better than a truck or convertible.

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