Brand Freshness - The Secret of Subaru's Success?

Cocoa Beach Bum · 03-22-2013, 06:38 PM

The Automotive Lease Guide (ALG) published an interesting blog entry two days ago at https://www.alg.com/march-april-2013-industry-report/. One section was devoted to hyping ALG's new Retention Factors whitepaper and contains a fascinating chart. The "X" axis is labelled "Brand Age." For each brand, ALG calculated what it calls "brand age" which is the average age of the models under that particular brand, weighted by sales. I believe a Subaru's "model age" is calculated from a new model's introduction, the case for the XV Crosstrek and BRZ, or from a model's last "full model change" (FMC), the case for the older models like Impreza, Legacy, Forester, etc.

The most striking feature of this graph is that Subaru brand cars have a higher overall residual (AKA "resale") value percentage after 3 years of ownership than ANY other brand, premium or mainstream, except for Mini. Subaru is also one of the "freshest" brands. The graph suggests a very strong correlation between brand age (AKA, "freshness") and residual value.

Subaru has been setting sales records for the last few years, which implies the number of late model Subarus available in the used car market should also be increasing. Yet residual values remain breathtakingly high for those used Subarus. Anyone in the market for a late-model used WRX/STI can testify that this is a fact. These high residual values frequently convince people to buy a new Subaru instead of a used one. I wonder how long this "virtuous feedback cycle" can persist?

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chanomatik · 03-22-2013, 07:46 PM

I can attest to that when I went to sell my 2011 WRX Limited. People would lowball and justify with, "Well, for that price I could spend a little bit more and buy a new one with significantly less miles." Always made me shake my head.

ajsti24 · 03-22-2013, 08:52 PM

Nice!!

Synchromesh123 · 03-22-2013, 09:05 PM

The reason why they sell so well is because Subaru is becoming more and more Toyota-like and Toyota sells well. Subaru has been taking quirkiness out of its cars and that makes them appealing to a wider audience.

I hate the new Outback. That thing is just titanic in size. I wouldn't be caught dead in one. But SUV moms love it. Similar with Forester although it's a tad more likeable.

All this has little to do with freshness. Subaru has been around since late 60s so they're hardly a fresh new brand in any way. It's just that they're more mainstream now and awd seems to be in fashion.

53x12 · 03-22-2013, 09:08 PM

Quote:

Originally Posted by chanomatik

I can attest to that when I went to sell my 2011 WRX Limited. People would lowball and justify with, "Well, for that price I could spend a little bit more and buy a new one with significantly less miles." Always made me shake my head.

Not sure what extent the lowball is but I can attest some WRX owners over value their car and many times it makes more sense to just buy a new one. So not sure what lowballed means in this situation.

4wdwrx · 03-22-2013, 10:33 PM

Quote:

Originally Posted by Synchromesh123

The reason why they sell so well is because Subaru is becoming more and more Toyota-like and Toyota sells well. Subaru has been taking quirkiness out of its cars and that makes them appealing to a wider audience.

I hate the new Outback. That thing is just titanic in size. I wouldn't be caught dead in one. But SUV moms love it. Similar with Forester although it's a tad more likeable.

All this has little to do with freshness. Subaru has been around since late 60s so they're hardly a fresh new brand in any way. It's just that they're more mainstream now and awd seems to be in fashion.

I don't see how they changed from what they used to be. The Outback is still a lifted up rugged wagon, the Forester is still a compact SUV, The Impreza actually went back to the original formula. They all got bigger... because people got bigger.

I think they are still quirky, but they are just making better automobiles these days and buyers eventually find out. Subaru cars were always quirky and bland and boring looking, but utilitarian.

C4RBON_F1BER · 03-22-2013, 10:37 PM

Quote:

Originally Posted by 4wdwrx

I don't see how they changed from what they used to be. The Outback is still a lifted up rugged wagon, the Forester is still a compact SUV, The Impreza actually went back to the original formula. They all got bigger... because people got bigger.

I think they are still quirky, but they are just making better automobiles these days and buyers eventually find out. Subaru cars were always quirky and bland and boring looking, but utilitarian.

I want my frameless windows back!

03-22-2013, 06:38 PM	#1
Cocoa Beach Bum Scooby Specialist Member#: 17355 Join Date: Apr 2002	Brand Freshness - The Secret of Subaru's Success? The Automotive Lease Guide (ALG) published an interesting blog entry two days ago at https://www.alg.com/march-april-2013-industry-report/. One section was devoted to hyping ALG's new Retention Factors whitepaper and contains a fascinating chart. The "X" axis is labelled "Brand Age." For each brand, ALG calculated what it calls "brand age" which is the average age of the models under that particular brand, weighted by sales. I believe a Subaru's "model age" is calculated from a new model's introduction, the case for the XV Crosstrek and BRZ, or from a model's last "full model change" (FMC), the case for the older models like Impreza, Legacy, Forester, etc. The most striking feature of this graph is that Subaru brand cars have a higher overall residual (AKA "resale") value percentage after 3 years of ownership than ANY other brand, premium or mainstream, except for Mini. Subaru is also one of the "freshest" brands. The graph suggests a very strong correlation between brand age (AKA, "freshness") and residual value. Subaru has been setting sales records for the last few years, which implies the number of late model Subarus available in the used car market should also be increasing. Yet residual values remain breathtakingly high for those used Subarus. Anyone in the market for a late-model used WRX/STI can testify that this is a fact. These high residual values frequently convince people to buy a new Subaru instead of a used one. I wonder how long this "virtuous feedback cycle" can persist? * Registered users of the site do not see these ads. Last edited by Cocoa Beach Bum; 03-22-2013 at 06:50 PM.

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03-22-2013, 07:46 PM	#2
chanomatik NASIOC Supporter Member#: 159474 Join Date: Sep 2007 Chapter/Region: AKIC Location: East Anchorage (yuck!) Vehicle: 2013 BRZ Ltd 6MT CBS Counter-steer like a boss	I can attest to that when I went to sell my 2011 WRX Limited. People would lowball and justify with, "Well, for that price I could spend a little bit more and buy a new one with significantly less miles." Always made me shake my head.

03-22-2013, 08:52 PM	#3
ajsti24 Scooby Newbie Member#: 345666 Join Date: Feb 2013 Location: Los Angeles Vehicle: 2013 STi SE TOP	Nice!!

03-22-2013, 09:05 PM	#4
Synchromesh123 Scooby Newbie Member#: 287293 Join Date: Jul 2011 Location: Central MA Vehicle: 2012 WRX Premium DGM	The reason why they sell so well is because Subaru is becoming more and more Toyota-like and Toyota sells well. Subaru has been taking quirkiness out of its cars and that makes them appealing to a wider audience. I hate the new Outback. That thing is just titanic in size. I wouldn't be caught dead in one. But SUV moms love it. Similar with Forester although it's a tad more likeable. All this has little to do with freshness. Subaru has been around since late 60s so they're hardly a fresh new brand in any way. It's just that they're more mainstream now and awd seems to be in fashion.