Word: subaru
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...Subaru's customers are, the company admits, a little oddball. How else do you explain the fact that Subaru of America was the only car company to increase unit sales last year? Subaru buyers tend to be overeducated; they buy less car than they can afford and hang on to it forever. "They pay cash, and then you never see them again," says Tim Mahoney, Subaru of America's chief marketing officer. At least not for an average 7.3 years, when they return like migrating carbirds to buy another one. Recession...
...know, of course, that Detroit is on its knees. But Stuttgart, Tokyo and Seoul aren't faring particularly well either. Toyota's U.S. sales were off 16% last year. Yet Subaru was positive to the tune of 491 cars. The company sold 187,699 vehicles last year, led by value-driven models like the Forester SUV and Outback wagon ($19,995 to $22,295) and the muscled-up Impreza WRX ($24,995), a small sedan. (See pictures of the remains of Detroit...
...That's an increase of just 0.3% over 2007. But in a disastrous year for the industry, it boosted Subaru's market share to 1.92%, from 1.2%. In the auto industry, that's a huge increase - and a higher market share than Cadillac, for instance. Subaru did it without giving away the store too. For 2008, the company decided to roll back its list prices and back off the rebates. The sticker price of the 2009 Forester, for instance, was lowered to $19,995, from $21,295. "We had to bring down our incentive costs and stop selling based...
...Loyalty can help you do that, and Subaru has leveraged its existing customers, who identify more with their cars than perhaps is healthy. "If you stop a Subaru owner at sporting event, ski slope, shopping center, they'll tell you, 'I love this car,' " says Mahoney. And being the opinionated-bumper-sticker type, they are more likely to recommend the brand than even Toyota or Honda owners...
...collapse of the new-car market in the second half of 2008 translates to pain all around. Every major carmaker, with the exception of Subaru, reported a sales decline in 2008, including luxury manufacturers Mercedes-Benz and BMW - once considered invulnerable to a recession...