Thursday, December 23, 2004

Subaru Upscale?

It's a longshot as far as I'm concerned, but evidentally Subaru wants to move upscale, according to an Autoweek interview with their CEO Kyoji Takenaka. They really should move with caution. The last sort of niche player to try to move upscale, Volkswagen, is now reaping the whirlwind with losses of over a billion dollars this year.

Before they move forward with this idea, they have to understand how people view Subaru. Subaru is a brand that is probably only common in blue state/foreign buying states, that have harsh winter weather. Massachusetts? You bet. Mississippi? No way. So they are sort of like the Japanese version of Saab. It's a small market. To move upscale would mean additional competition. I don't think it's a smart move. Subaru is best known for AWD, and there are a lot of people who want cheap AWD. I think there's a market downstream rather than upstream.

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