The U.S. is the largest and most important market for Subaru. For 2018, Subaru of America reported 680,135 vehicles sold, a 5% increase compared to 2017. Commercial fleet continues to contribute strongly to the growth.
Subaru of America, Inc., headquartered in Camden, N.J., markets and distributes Subaru vehicles, parts and accessories through a network of more than 630 retailers across the U.S.
Sales for the Crosstrek increased an astonishing 31% from 2017 while the all-new Forester continues to gain momentum outpacing its predecessor. Outback is the brand’s best seller with 178,854 sales. In addition, 36,211 of the all-new three-row Ascent SUVs were delivered in 2018.
Subaru continues to gain market share as evidenced by 2018 sales data. Buyers are demonstrating a robust demand for Subaru products, but competition is intensifying in the company’s mainstay crossover market as other brands offer new products in this fast-growing segment.
Subaru is in a strong sales position with the 2018 introduction of two new models. First is the all-new Ascent, which is Subaru’s three-row SUV, and, second is the all-new fifth-generation Forester SUV. In the summer of 2019, Subaru will launch two additional new products – a redesigned 2020 Outback crossover and the 2020 Legacy sedan.
In addition, Subaru has a strong reputation of consistently fast order-to-delivery times, primarily due to Subaru of Indiana Automotive (SIA) in Lafayette, Ind., which is home of North American production for the Ascent, Impreza, Legacy, and Outback models.
Another strength for Subaru in the commercial fleet market has been its strong resale values. Last November, Subaru was honored with the “Best Overall Mainstream Brand” Residual Value Award for the fourth consecutive year by ALG, the analytics division of TrueCar, Inc. In addition, ALG also named five Subaru models– Impreza, WRX, Forester, Outback, and Crosstrek – as having the best residual values in their respective vehicle segments.
To learn more about Subaru’s plans in the commercial fleet market, AF interviewed Mick Morris, national commercial fleet manager for Subaru of America. Morris recently joined Subaru having over 20 years of fleet sales, operations and rental experience. He has held leadership positions at Volvo Car USA, Mercedes-Benz USA, and Avis Budget Group.
Following are excerpts of the interview:
AF: Could you provide a recap of Subaru’s sales during the 2018 calendar Year.
Morris: Every year at Subaru’s annual national business conference, the plan is presented to our retailers. Subaru’s sales target for the 2018 calendar-year was 680,000 vehicles. That target was exceeded thanks to our 630 retailers. The resulting gain in overall market share (expected to be 4% for the first time ever) is the result of solid teamwork.
The Ascent launch is well under way and is going very well considering it’s an all-new vehicle segment for Subaru. Next, we launched the all-new 2019 model Forester that’s built on the new Subaru Global Platform, which has had a great start. We expect really great things from that vehicle line.
AF: What is your sales forecast for 2019?
Morris: The industry experts are saying, the SAAR (seasonally adjusted annual rate) has adjusted to around 17 million sales that’s expected to continue for the next couple of years. While overall industry sales are forecast to stay flat at 17 million, this sales volume still represents a very strong industry.
Despite the industry facing some headwinds, Subaru still expects to grow. With 2018’s target exceeded, Subaru has had eleven consecutive years of sales increases; 10 years of sales records. Next year, Subaru expects its total sales to be somewhere north of 700,000 vehicles, which includes both retail and fleet sales.
In January 2019, we’ll launch the Crosstrek PHEV, which is one of Subaru’s hottest car lines. Then, in the summer of 2019, we’ll launch the all-new 2020 Legacy and Outback on the Subaru Global Platform. In 2019, we’ll also have a full year of Ascent and Forester sales under our belts. As a result, we expect Subaru sales to continue to grow, regardless of what the industry is doing. We expect to continue to take market share as we grow the Subaru brand.
AF: Over the years, Subaru has steadily increased its commercial fleet sales. What are your plans to take Subaru commercial fleet sales to the next level?
Morris: The Ascent is going to be a big part of that growth since it is a brand-new segment for Subaru. Companies operating fleets have come to know Subaru as a real player in the commercial fleet segment. For example, in terms of order-to-delivery times, Subaru is practically No. 1 in all industry surveys, or close to No. 1. The reason is that Subaru treats a commercial sale just as it would a retail sale.
The word is out. Subaru has gone from a niche player to being a mainstream player, especially when you look at our volume, where we are, what we plan to do, and the model lineup. One of the strongest industries for Subaru commercial fleet sales is the pharmaceutical industry. I don’t think there’s a pharmaceutical company out there that hasn’t had a good experience with Subaru product. The vehicles prove themselves on the road and on the spreadsheet. Whether it be with total cost of ownership, residuals, operation, or customer service from the time of delivery until the time a vehicle is cycled out of service. Subaru’s fleet department is staffed by experienced, dedicated fleet professionals, inside and outside the office.
Subaru is a viable alternative for somebody that wants to put drivers in upscale vehicles without paying upscale pricing. Keep in mind Subaru’s domestic vehicle production in Lafayette, Indiana, and our pledge to treat commercial fleet sales the same as retail.
AF: What is the percentage breakdown between daily rental and commercial?
Morris: We have a hard number on rental that we will not exceed. Due to our focus on maintaining strong residuals, we’re very concerned about the volume of used vehicles. We keep tight control on repurchase rentals limiting our exposure at auction and make every effort to keep the vehicles in the Subaru family. With this restrained approach, we are careful not to put our residual values at risk. This equates to about a one-to-one ratio between commercial and rental. Both segments are about equal in terms of volume.
Subaru Enters New Segment with All-New Three-Row SUV
The 2019 Subaru Ascent SUV is the biggest Subaru built to date. It is built on an extended version of the Subaru Global Platform that features an extensive use of high-strength steel.
The three-row Ascent has a 113.8-inch wheelbase and 153.5 cubic feet of passenger volume. It is available with a choice of seven- or eight-passenger configurations. The SUV has nine unique seating configurations.
There is 17.8 cubic feet of cargo space behind the third row seat. In addition, the third-row seats can fold down in a 60/40 split to create more cargo-carrying room. The rear doors open 75 degrees, making it easy for passengers to enter and exit the third row seat.
The Ascent is powered by an all-new 2.4L BOXER turbocharged engine that generates 260 horsepower and 277 lb.-ft. of torque. It is mated to a continuously variable transmission. A 19.3 gallon fuel tank gives it a 500-mile cruising range.
Standard equipment on the Ascent is the EyeSight Driver Assist Technology, a collision mitigation system that includes forward collision warning, automatic emergency braking, adaptive cruise control, lane departure warning, and pedestrian detection.
The 2019 Subaru Ascent has up to 5,000-pound towing capacity, the most ever in Subaru history. The SUV is also equipped with Trailer Stability Assist, which helps maintain vehicle stability while towing by monitoring trailer sway.