Subaru’s boring approach works in tough times

OPINION

By Jerry Flint

updated 10:06 a.m. ET April 22, 2009

Who says you have to be big or global or green to survive? A handful of car models, such as the Jeep Wrangler and the Smart, are maintaining their sales despite the general auto collapse. But the only full-sized companies that are holding their own are Korea's Hyundai and Kia, and Subaru, the Japanese automaker that builds cars in Indiana.

The Koreans have the advantage of a sharply declining home currency against the dollar. That leaves plenty of room for incentives. Plus, they've been pushing fleet sales.

But how is Subaru doing it? It has no hybrid or electric car. Its fuel efficiency is nothing special, and Subarus are definitely not the darlings of Hollywood stars. The company sells only 600,000 vehicles a year worldwide, making it maybe the 20th largest automaker.

Its major markets are Japan and then the U.S., with 187,699 sales here last year, outselling only Mitsubishi, Suzuki, and Porsche. But those 2008 sales were a notch above the year before, and first-quarter 2009 sales are a notch above, too. Subaru is proof that you don't have to be huge to hold your own.

All Subarus sold in the U.S. are all-wheel-drive, but as for looks, they're plain — even dull — family-type wagons and sedans. The exceptions are the WRX and STI models. They look plain, too — all the better not to provoke the police — but these models are for the "fast and furious" crowd who like 'em hot.

So why the success? Well, Subarus have good quality; they are always recommended by Consumer Reports. They were early into the all-wheel-drive market. Also, the Subaru engine, called a "boxer" design, is unusual — imagine a V engine turned on its side.

But there's more to the company's success, especially now. "We're fortunate. Our customer is a financially secure customer," says Executive Vice President Tom Doll. But, then, Subarus aren't expensive. They run between $20,000 to $30,000 for the most part, maybe closer to $40,000 for a just few models. Personally, I think there are people who want all-wheel-drive, but don't like the size, the gas-guzzler label, the macho looks of the other SUVs and crossovers. The Subaru crowd is terribly loyal, too, and you hardly ever hear a bad word about them.

I must admit I have a soft spot for Subaru. I once was in an accident with a Subaru wagon. Entirely my fault, a one-car accident. The Subaru was totaled, but my only injury was a tiny scratch on the palm of one hand. I figure I owe my life to Subaru.

While Japanese cars are particularly popular in California, Subaru's big regional markets are the Northeast, New England and the Pacific Northwest.

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