Subaru Australia says a light city car is unlikely to ever happen as it wouldn’t fit with the brand’s DNA and the requirements of the price-sensitive segment.
Speaking to CarAdvice at the launch of the 2016 Subaru Forester, Liberty and Outback, the brand’s managing director, Nick Senior, admitted that Subaru will likely never compete against the likes of the Mazda2, Toyota Yaris and Ford Fiesta.
“There’s not a light car [now], there’s not a light car in the future,” Senior told CarAdvice.
According to Senior, Subaru’s brand DNA could not stretch to allow a front-wheel-drive city car to sit within the range, meaning that any light car would need all-wheel-drive and, as such, price itself out of the market.
“We operate in the premium end of most segments that we compete in… BRZ was a specialist case, I would not want to dilute the brand any more by having a front-wheel-drive light car. I can live with the BRZ because of what it is, because it’s rear-wheel drive and has Subaru characteristics, but I couldn’t come with a front wheel drive light car.
“So, all of a sudden you come with an all-wheel-drive light car and you’re not going to sell. You do a 1.2-litre Subaru with AWD and it’s $20,000 and it’s not going to sell. I don’t lose any sleep not having a light car.”
Senior says that even those manufacturers that do make front-wheel-drive light cars do so more to get new buyers into their brands rather than to make a profit.
“No one will tell you they make money out of light cars. When your production is overflowing, it’s probably the last thing on your mind, to put a loss-maker in the production line and take Outbacks and everything else away.”
Subaru’s strategy for attracting younger and first-time car buyers is to offer a used Subaru to get them into the family, in the aim of allowing the ownership experience to influence their next purchasing decision in the brand’s favour.
“[Not having a light car] has always been one of our challenges, it’s one of the reasons we drive the dealers with used cars because we don’t have an entry level car at $14,000 or $15,000,” Senior said.
“The entry level to Subaru is $24,000, so we attract those first-car buyers into Subarus with used cars, and once we get them in a Subaru we are confident, because of the experience, that they will stay with the brand.”
In 2015 Subaru Australia increased its sales by 7.6 per cent, with more than 43600 units solds, marking the 16th annual growth year out of last 18 years (the two negative years being the fault of the GFC and the Japanese Tsunami).