Subaru price cuts : Japanese brand explains its dramatic adjustments

“Obviously it’s a process that’s locked into negotiations with the factory, currency, hedging and that sort of stuff,” Senior said.

He said currency was the “biggest impact” on the price of imported goods, while a new free trade agreement with Japan – which has yet to be officiated – has also been factored into the pricing.

Senior suggested the ever-changing nature of the new car market had also forced Subaru to act on its positioning – namely the fact that buyers who once chose Japanese could now choose European models for similar prices.

“The Europeans have moved into more mainstream segments and we too have changed strategy with Liberty in particular - making the price versus specification ratio more attractive than ever before."

But when asked if the existing pricing situation – whereby the top-of-the-pops Liberty 3.6R was priced at $55,990 plus on-road costs (now $41,990) and the Outback 3.6R was $57,990 plus on-road costs (now $47,990) was truly reflective of what buyers had been paying for the six-cylinder models, it was clear the list price wasn’t truly indicative of the money changing hands.

“The reality is nowadays that there’s an RRP and there’s a transaction price,” he said, indicating the six-pot models were seeing decent discounts from dealers.

“That’s the world everyone lives in – whether it’s cars, or whether it’s Surface Pro 3. That’s how it is,” he said.

Senior is also of the belief that the new Outback and Liberty pricing will entice buyers over from the likes of Holden and Ford, particularly those who may not choose to buy an Aussie-built car with the end of production of those local icons imminent.

According to Senior, the brand has a distinct selling point that it will continue to push to gain more attention from those potential customers.

“We’ve got all-wheel drive, which I still think is a fantastic advantage to have,” he said. “And as some of these locally developed cars with rear-wheel drive come to an end, I think we’re in a pretty good space with an Outback to offer a choice, to at least put a Subaru Outback on the shopping list.

“And we do it with our features and specification, we’re going to do it with aggressive pricing, and hopefully see it work,” he said.

Speaking specifically of the Outback and Liberty, Senior suggest the pricing changes were essentially a tying up of a loose end in the brand’s portfolio.

“This is the last car in our changeover cycle – we saw WRX and STI earlier in the year where we had aggressive price cuts as well,” he said.

“Forester, previously, got a stack of extra equipment. Impreza pricing we’ve changed, that’s probably now had $3000 (of value added) with driveaway pricing. That’s where we are,” Senior said.

“This is the last cab off the rank, if you like, in terms of being able to look at some of those prices.”

Senior admitted, though, that getting enough cars to satisfy those new buyers could be problematic.

“Our biggest challenge is going to be production. Subaru in North America has been a runaway success over the last couple of years. They’re selling 13,000 Outbacks per month in the US, and something like 6000 Libertys. In Canada they’re selling over 1000 Outbacks per month,” he said.

“So our challenge is to be able to secure production, so that’s why we’re not talking any great volume gains next year,” Senior said.

Subaru is predicting it will double Liberty sales from their current rate of 75 units per month to 150 cars, while Outback sales are also expected to double to 400 per month in 2015.

The all-new Subaru Liberty and Subaru Outback are set to go on sale on January 1, 2015.