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Subaru isn't running under the radar any more

Alex Taylor III
2010-11-12

Subaru, which makes a habit of beating expectations, has done it again.

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    For October, Subaru saw its sales jump 25% in a month where auto sales as a whole rose only 13%. In the year to date, its sales are up 23% vs. the industry's 11%. With two months still to go, Subaru has already beaten its own yearly sales record.

    Subaru doesn't grow by selling the deal instead of the car. According to Edmunds.com, its incentives in October were the second-lowest in the industry at $474 per car, representing 1.8% of the sticker price.

    After more than two years of outperformance, Subaru is no longer autodom's best-kept secret.

    Indeed, a to-be released study of word-of-mouth referrals by nearly 100,000 people, conducted by New Jersey-based Keller Fay Group, showed that Subaru got the highest percentage of favorable mentions of any auto brand and the fewest negatives -- besting BMW.

    How does Subaru do it? It presents no surprises. It is steady, consistent and predictable. It sells the steak, not the sizzle.

    More than most American subsidiaries of Japanese automakers, Subaru is a mirror of its parent, which goes by the distinctly unglamorous name of Fuji Heavy Industries.

    Fuji Heavy is a no-frills company of engineers. Designers, marketers, and product planners take a back seat. Its corporate mission statement calls for the need to first "create advanced technology on an ongoing basis." Only after that is established does it mention any concern for the customer.

    All that technology essentially gets focused on four car lines with two body styles: four-door and five-door/crossover. Note the absence of coupes, convertibles, and minivans. Fuji doesn't let itself get distracted by product niches and it does what it does very well.

    (There is a fifth vehicle, Tribeca, that was conceived in a spasm of creativity a few years ago, but its sales have tailed off to a few hundred a month and represents less than 1% of sales).

    Besides making the same models year after, Subaru has been run by the same people year after. Its top executives understand its customers inside and out, they are on a first-name basis with its 600 or so dealers and they play the long game.

    Tom Doll, who is both chief operating officer and chief financial officer, joined Subaru in 1982 from Arthur Young and brings an accountant's sensibility to his job. He is realistic, focused, and detail-oriented. When asked to name the three main appeals of a Subaru, Doll listed "practical" first and "reliable" second. Only then did he add "fun to drive."

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