I am not sure what to make of this Subaru write up.....

[godwhomismike]

I got this from Bloomberg: [quote]Bloomberg: Gay Buyers, Gardeners Won't Be Enough for Subaru: Doron Levin June 24 (Bloomberg) -- Among the Asian automakers gobbling up more and more U.S. automotive market share, one that has struggled to increase its following is Fuji Heavy Industries Ltd.'s Subaru franchise. In light of the troubles engulfing Japan's Mitsubishi Motors Corp., steady, solid sales -- without increasing share -- looks like an enviable position for Subaru's business. But being frozen at only 1 percent of the market in an environment of stagnant U.S. vehicle prices, rising costs and tougher competition eventually could topple Subaru, and its management knows it. Fuji Heavy, therefore, is trying to elevate Subaru to premium brand status, in addition to its longtime strategy of appealing to gays and other market niches. It wants to sell better equipped vehicles, and to command higher prices and more revenue in a U.S. market already teeming with brands like Volvo, Saab, BMW and Acura that intend to maintain top-level status, too. Fuji, 20 percent owned by General Motors Corp., said in May that it intends to increase the number of dealers with Subaru- only facilities in the U.S. to 385 by year's end from 359 at the end of 2003. Subaru operates about 585 dealers in the U.S. A brand that can't justify its own showroom isn't likely to impress customers as premium. The `Starbucks' Feeling John Nash, president of Moon City Productions, an advertising agency that handles Subaru in New York, said ``the dealerships will be spruced up, the cars will be restyled and the dealerships will have a consistent look and feel, like what you get when you walk into Starbucks.'' On May 17 Fuji Heavy shares fell by 4.7 percent, the biggest one-day drop in six months, after the company warned that annual profit may drop as much as 17 percent in the current fiscal year, set to end at the end of March 2005. The reason for the prediction: The stronger yen is deflating the value of overseas earnings -- such as those from Subaru -- while material costs keep rising. Subaru has distinguished itself as a maker of four-wheel- drive models, which naturally tend to sell better in places with inclement weather, such as New England, the Northwest and Colorado. Seeking Gay Buyers And it has also distinguished itself as a favorite among gays. Fuji discovered this by accident in 1994 during focus groups it was conducting among owners in Northampton, Massachusetts. The automaker then decided to advertise in publications for that audience. Ads included references attuned to gay readers such as the tagline ``Get Out and Stay Out.'' Tennis star Martina Navratilova, who's been an advocate for gay and lesbian causes, was hired as a spokeswoman. Other automakers, such as Ford Motor Co. and DaimlerChrysler AG, noticed that Subaru was courting the gay and lesbian community and soon followed suit. Fuji also expanded its marketing efforts to reach customers through professional and other affiliate groups, more recently with gardening clubs, whose members might gravitate toward four- wheel-drive technology. In the last decade the company estimates it has sold about 40,000 vehicles using that method. To broaden Subaru's appeal and, therefore, increase sales and its share of the U.S. market, the automaker last year signed bicycling champion Lance Armstrong to a three-year, multi-million contract. Armstrong will appear -- though not on his bike or dressed in spandex -- in a series of commercials touting the 2005 Legacy sedan, which starts at about $21,000, and the Outback station wagon, which starts at about $19,000. Competition Undermines Strategy Subaru has a reputable name and a hard-earned reputation for ruggedness. Niche branding once was effective, but the increased segmentation of the U.S. vehicle market -- with new nameplates and models appearing constantly --undermines such a strategy. Toyota Motor Corp. now has Scion and General Motors has Hummer, examples of two new brands that didn't exist when Subaru first appeared in 1969. One of Fuji Heavy's most valuable assets could prove to be its alliance with General Motors. The Subaru Impreza - of which the WRX version is a favorite among hotrodders -- has been modified as the basis for GM's new Saab 9-2X, a model now being introduced and known facetiously as the ``Saabaru.'' If GM ever decides to get serious about increasing its presence in Japan, it could try by expanding through Subaru dealerships in that country. And if Subaru gets in trouble in the U.S., GM can assist, just as it has with other foreign brands it owns. Pitching cars to gays and gardeners was clever, an idea that took imaginative thinking. Meanwhile, the automotive fray has grown much tougher. To contact the writer of this column: Doron Levin in Southfield, Michigan at [email]dlevin5@bloomberg.net[/email]. To contact the editor responsible for this column: Bill Ahearn in New York at [email]bahearn@bloomberg.net[/email]. Last Updated: June 24, 2004 00:09 EDT [/quote] Any opinions??? - Mike[/quote]

[Drift Monkey]

I guess their marketing is working. Look at all the [i]friendly[/i] folks we have here! :oops:

[godwhomismike]

[quote name='Drift Monkey']I guess their marketing is working. Look at all the [i]friendly[/i] folks he have here! :oops:[/quote] I'm assuming that the STi color is indeed cherry blossom red then. :wink: - Mike

[Drift Monkey]

[quote name='godwhomismike']I'm assuming that the STi color is indeed cherry blossom red then. :wink: - Mike[/quote] Did you ever have a doubt? Pink is SO in these days!

[Dr. Zevil]

Monkey, you are soooooo the target market. I always wondered if that bobble head had a "hidden" meaning. Maybe it would be more appropriate if Quagmire had is mouth open :O :lol:

[Drift Monkey]

[quote name='Dr. Zevil']Monkey, you are soooooo the target market. I always wondered if that bobble head had a "hidden" meaning. Maybe it would be more appropriate if Quagmire had is mouth open :O :lol:[/quote] Brian: You're back from Manila. You had lumpia for dinner. And you made love to two Filipino women...and a man. Quagmire: You mean three Filipino women. *pause* aaaahhhhhhhh!!!11

[IwannaSportSedan]

Financially, I hope the legacy and outback will lead a charge toward style and quality of design being associated with Subaru, rather than just mechanical ruggedness and uniqueness. All the folks who own older legacies, imprezzas and forresters who are looking to replace them will hopefully find a nicer update than they were hoping. Hopefully those wanting to look at Audis and Volvos, but without the pre-requisite cashflow will also find a good alternative, perhaps even a preferable alternative in the new Legacies and Outbacks. 1% marketshare is pretty small, but where are Kia, Hyundai, Mitsubishi or Infiniti, even Nissan, in terms of overall US marketshare? Probably not as high as we would think. How many actual cars are sold under that 1% umbrella? there are how many new car buyers in this country? How should Subaru be doing, when they are all-car, and trucks and truck based SUVs sell more than 50% in new vehicle sales in this country. With a good product, there is a lot of room for growth. With a marginal product, they are that much closer to the edge of bankruptcy. I am not sure how much up-market the market will take. there are plenty of 30-50k 4-door, wagon, and SUV competitors, some with benchmark build quality, and it is getting to the edge of most people's affordability. Certainly of mine, and I am almost 27, out of credit card debt, married, with no children yet, new homeowner, and in a 2 professional income household. I should be hitting a financial stride, and am starting to, but 30k is way out of my range right now. I couldn't afford an A4 quattro sport pkg, if I needed to. The Legacy GT is not so out of reach. (just not a priority just now.) I would rather have a car company to patronize, like Mazda or Subaru, that markets interesting cars to people without BMW means, than to have yet another brand try to compete in the melee above the price class that people like me can afford. I, and many others, would be relagated to reading about those cars in magazines, rather than driving one of them on the roads. Car companies should be interested in getting cars on the roads, more than getting them in the magazines. For the most part they do just that. As for marketing to specific lifestyles, Car companies, and especially the Ad companies they hire, try to niche market any product to anyone they think will show some interest. It is more about chasing the $ than anything. In most cases, it has nothing at all to do with the design of the product. Group C likes product 4, so we'll niche market directly to them, and try to get all the group c folks to buy a lot of product 4 and anything else made by that company. The Ad companies usually make more money from the company that sells product 4, the more product 4 the Ad company sells. So the Ad company chases any $ they think they can smell. I certainly hope Subaru, as a company gains more market share, as their product, namely the Legacy GT, just popped up on my radar, and hopefully also more folks; and increases marketshare, which the folks at bloomberg treat as a litmus test, but I think they are on firmer ground than the bloomberg analyst gives them credit for. As an instance of the new legacy attracting new consumers, I'll use myself as an example: The last model Legacy, the Impreza, and Forrester are mechanically interesting, as all subies are, but inside and outside, materials and design wise, they put themselves out of the running. They don't do it for me. New Legacy is "Hey, there, what's your name? 8) ". In about 24 months, a lightly used Legacy GT may well pull me away from a used A4, RX8, or a well used BMW. My criteria is a good looking and sporty car with 4 useable seats (thusly probably 4 doors), manual trans, 200+ HP, and either RWD, or non-FWD-biased AWD. (I hate torque steer :? ) Now, Imagine someone with a few more dollars in their pocket (can buy a new car at 25-35k) and are ready to buy now or soon, and I think Subie is on their way up.

[MtnSub]

For me, Subaru has nothing to do with moving up-market. I have owned BMW and Mercedes and can buy what I want. I am very likely going to buy the Subaru because it does not put a lot of g-whiz computer tech between me and the road, it felt good on the first short test drive and it is a fresh alternative, with more power and better brakes than the BMW 325xi wagon. I seriously looked at the Volvo V70R and was impressed with its interior, Brembo breaks, power, 6MT etc, but it is 400 lbs heavier than the Leg GT 5MT, has lots of g-whiz suspension and it has a totaly unacceptabel 43.3 ft. turning radius. The 43 ft turning radius makes everyday parking a nightmare and what about nimble handling? Yes, I am critical of the Leg GT/Ltd for not having auto-up/down windows, garage door opener buttons, rear armrest(wagon) and for not offering a sport package, but regardless of price, it appears to offer a real drivers car with admirable style and an appreciation for design simplicity.

[SUBE555]

It is nice to see the perspective of those coming from within the Subaru camp, as well as above and below Subaru in the food chain and how people's views sit. It does seem well poised, just a few things like the windows, homelink, telescoping wheel and perhaps a few other features and it should be an even easier pick with a larger market looking for good performing vehicles that are grown up.

[godwhomismike]

[quote name='SUBE555']It is nice to see the perspective of those coming from within the Subaru camp, as well as above and below Subaru in the food chain and how people's views sit. It does seem well poised, just a few things like the windows, homelink, telescoping wheel and perhaps a few other features and it should be an even easier pick with a larger market looking for good performing vehicles that are grown up.[/quote] I guess they wanted to leave some room to imrove it over the years to keep it fresh. Plus, I'm sure Subaru is going to follow the trend with having dealers install STi parts and offer warrenty on the parts. - Mike

[SUBE555]

So far, most STi parts don't offer a warranty, or haven't. Most dealerships don't have an issue with STi parts though since essentially it is OEM parts. As for room to grow, I'd imagine that's also the reason a 6-cyl isn't offered in the Leg line yet.

[brady_bunch]

[quote name='MtnSub']not offering a sport package...[/quote] I thought the GT was the sport package? :lol:

[gtguy]

[quote name='brady_bunch'][quote name='MtnSub']not offering a sport package...[/quote] I thought the GT was the sport package? :lol:[/quote] You are correct, BB. But in the "nothing is ever good enough" world of the aggressive enthusiast, the GT is considered all mushy and stuff to some people. :lol: Kevin

[Drift Monkey]

[quote name='gtguy']You are correct, BB. But in the "nothing is ever good enough" world of the aggressive enthusiast, the GT is considered all mushy and stuff to some people. :lol: Kevin[/quote] Oh be nice Kevin! Mushy and stuff can be good sometimes! :wink:

[MtnSub]

Brady Bunch, I agree that the “new” Leg GT is the “sport package” and with better tires will suit my needs better than many other choices in the marketplace. This car is more than “good enough” to win my business over cars that cost $6K-$12K more than the Leg GT. The Volvo V70R gives me many things that are missing or could be upgraded on the Leg GT as it evolves, but regardless of budget, I am choosing the Leg GT because it is the “best canvas” and offers the most critical elements I want stock, off the showroom floor. The stock seats are excellent and the interior is more stylish than new Bangled BMWs. The Leg GT’s comparatively lean weight yet rock solid feel combined with large brakes, 250 hp, and a great turning radius make this car a drivers car or a sport package car. And of course there is the fundamental beauty and sophistication with simplicity of the Subaru drive-train engineering. After market sport packages or add-ons have been offered for years, by BMW, to satisfy enthusiasts and build a performance image. Subaru offers after-market sport upgrades in Japan and will likely do so in North Am.