Given that U.S. new vehicle registrations in 2012 were spread across 52 makes and 331 models, it's difficult to summarize the results concisely. This leads to a focus on the larger makes that dominate the industry. Yet one smaller make has been outperforming the industry for years and deserves some recognition. Subaru's recent performance in the U.S. has been remarkable. Two facts stand out. Subaru is the only make in the entire U.S. industry that has had five consecutive year-over-year sales improvements from 2008 through 2012 without any declines during the great recession. Second, in March, Subaru's sales were within 1,010 units of Volkswagen. Volkswagen is a major global player with open ambitions of becoming number one globally, based on sales by 2018, and it has pursued an aggressive growth strategy in the U.S. Right now, though, a much smaller niche make is nipping at the Volkswagen make's heels. I don't mention this as a slight of Volkswagen at all, but rather as a compliment to Subaru.
I see (at least) four drivers of Subaru's success. First, Subaru has carved out a unique position combining the outdoors (including AWD) with fun-to-drive (BRZ, WRX) and Asian quality. No other make attempts to occupy this space. Subaru also has been consistently promoting these three values for years. The Subaru model names themselves – Forester, Outback, Crosstrek – play right into this image.
Secondly, as seen on the table below, Subaru has focused on four core products (which until this year consistently comprised over 90% of all Subaru deliveries) and these four products compete in three large and thriving segments. Unlike many of its competitors, Subaru has never ventured into the large vehicle segments – car or truck – which recently have been losing share. In other words, Subaru's product lineup has been perfectly positioned to take advantage of the movement of the general market.
Third, Subaru has followed its larger Asian rivals in relentlessly redesigning its products to keep them fresh. Last year, a new Impreza came to market and now a redesigned Forester is on sale. A new WRX comes next year followed by a new Legacy and Outback.
Lastly, and perhaps because of the above three facts, Subaru drivers are loyal. They stay with the brand. In the 2012 calendar year, Subaru's household loyalty rate was 50.4%, meaning that over half of all Subaru owners purchased another one. This puts Subaru ninth among all makes in the industry and above the industry average of 48.8%. But, importantly, all of the non-luxury makes ranking above Subaru have broader product portfolios, while Subaru's remains relatively limited with just five products (loyalty tends to diminish as the product portfolio narrows since drivers wanting to change body types are increasingly forced to defect to another make). See Bashar Cholagh's recent blog for a complete loyalty ranking of all makes in 2012.
Given all these trends, it's easy to see why Subaru's U.S. share continues to grow. Subaru accounted for just 1.4% of the market in 2008, but through two months this year it has grabbed 2.55%, an 82% gain. Polk forecasts that the company will hold on to 2.5% of the market for all of 2013 and capture 2.6% in 2014 before retreating slightly after that. But a new Legacy and Outback arriving in 2015 should revive the make's share in years 2016 and beyond.
Posted by Tom Libby, Lead Analyst, North American Forecasting, Polk (04.29.2013)