Subaru has a problem. A problem it hasn’t seen in a long time. The problem? The BRZ is too popular. Its skyrocketing sales growth is forcing the executives of the small company to reconsider their niche status and their growth plans. If Americans would simply stop buying the entry-level sports car so quickly, Subaru would appreciate that. Talk about a good problem to have.
When Subaru launched the BRZ it was quite unlike the rest of their niche SUV, wagon lineup. The BRZ was a sports car after all and while the WRX has been a rally car success, it isn’t the same driving experience. Also, the BRZ was launched with its twin – the Scion FR-S.
The thinking at the launch was that since Scion was backed by Toyota and they had the better known reputation, the FR-S was going to kill the BRZ on sales volume. Then, a funny thing happened. The American consumer got involved.
“In the 12 months the two cars have been on sale, Subaru has sold one BRZ to every 2.6 Scions sold,” according to Edmunds.com in November, 2013.
Huh? Yep, you heard that right. The BRZ is crushing the FR-S. Turns out that the buyers of the entry-level sports car isn’t so brand loyal as they are with regards to say Ford Mustangs or Chevy Camaros. These buyers aren’t looking for a cheap used car either. They are willing to try someone new and shop around. And it turns out that this buyer is not the young 25-30 demographic as car experts thought they would be. In fact, the average age of a BRZ registrant is 45-54 according to Edmunds.com. This buyer is simply looking for the best deal and so far, Subaru is offering more features and rebates than the FR-S.
This has put Subaru in a quandary. They could pull back, yet they are enjoying the success throughout their lineup. When a BRZ buyer comes to their dealership, they see the other models Subaru offers and buy them as well.
According to a press release: “Subaru of America, Inc. today reported 35,994 vehicle sales for the month of July, a 43 percent increase over July 2012. The company also posted best-ever July sales for the Forester, Outback and Impreza models. Year-to-date sales for Subaru total 240,591 – 27 percent higher than the same period in 2012.”
The problem for Subaru is that they have long been a “niche” automaker. This sales success is causing them to have lots of internal debate on their growth plan. Autonews.com reports, in a recent interview, Subaru President Yasuyuki Yoshinaga said: “We’re standing at a major turning point for Subaru. It shouldn’t just be about volumes. We should be making cars only Subaru can make that are a little more expensive and more profitable than the competition.”
What does this mean for sports car fans? We could see more manufactures offer better entry-level sports cars. The demographic that is buying the BRZ (45-54) is the “sweet” range for most of these manufactures. These are the customers who have the money, know what they want and are willing to pay a premium for features. In other words, automakers make a lot more profit on them then the fresh out of college grad.
This sales success has only spurned on rumors of all makers bringing back entry-level offerings like the Toyota Celica or MR2. These cars were initially killed due to poor demand/profit, yet the success of the BRZ is recreating a business case to offer them. In fact, at the Toyota unveil of the FT-1, Toyota executives talked about the desire to bring back those cars.
In the end, Porsche’s, Camaro’s and Mustang’s will have their place, yet entry-level sports cars saw a tremendous growth last year. How will automakers respond to this new growth? We have to wait and see. For niche makers like Subaru that decision will be critical to their future.
Image Sources: Stradablog, Andrew Choy and David Guo’s Master via Flickr.