2019 Ascent - Subaru’s Plan to Woo Americans: A Roomy SUV With 19 Cup Holders

Subaru Corp. FUJHY -0.92% has become one of the world’s most profitable car companies by selling Japanese-inspired wagons to American buyers with unconventional tastes.

Now, with its dependence on the U.S. market increasing, the Tokyo-based auto maker is launching the Ascent, an eight-seater sport-utility vehicle that it hopes will appeal to Middle America’s infatuation with larger and heavier transportation.

Two-thirds of new vehicle buyers in the U.S. choose SUVs or pickup trucks, according to Kelley Blue Book, up from about half in 2013—a trend that has helped boost overall transaction prices. When the Ascent goes on sale this summer—starting in the low $30,000s—Subaru will join Volkswagen AG , Nissan Motor Co. , Hyundai Motor Corp. and other foreign brands adding bigger vehicles to their lineups.

The U.S. accounts for nearly 70% of Subaru’s global sales volume. Scandals involving questionable factory inspection protocols and fuel-economy numbers are severely denting the company’s sales in Japan. Its European business is stagnant, and Subaru sold fewer than 50,000 cars in 2016 in China—the world’s largest car market with a total of 28 million vehicles sold that year.

Subaru’s Ascent, with an all-wheel drive and a prominent trucklike front grille, is designed for the preferences of American drivers. The model has 19 cup holders and boasts nearly twice as much towing capacity as the company’s popular Outback model, a crossover wagon.

Many Subaru dealerships are welcoming the new addition, saying the brand’s existing line is losing Subaru owners seeking more towing power, seating options and extra room.

“Our customers have been asking for it,” said Wally Sommer, president of an eponymous Subaru dealer near Milwaukee. “We’ve lost business because we didn’t have a vehicle like this.”

Subaru has tried to expand its portfolio before. It stumbled badly the last time with a three-row SUV called the Tribeca, which made its debut as a 2006 model. Many customers saw it as cramped and ungainly, and the company pulled the vehicle in 2014.

Subaru says the Ascent is designed to be roomier and more stylish than its star-crossed predecessor, capable of taking on the Honda Pilot or Toyota Highlander, two of the most popular midsize SUVs and both featuring plenty of cargo space and plush interiors.

“Our best business opportunity is to go big,” Subaru executive vice president Takeshi Tachimori said during an interview at the Los Angeles Auto Show in November. The century-old company has pumped $1.5 billion over the past five years to expand an Indiana plant where the Ascent will be built alongside smaller models.

Americans bought a record 647,956 Subaru vehicles last year, nearly twice as many as five years ago, the company said. That gave Subaru a 3.8% market share—on par with Hyundai’s 3.9%, according to Autodata Corp.

Having entered the U.S. five decades ago when Detroit’s Big Three dominated, Subaru has evolved from marketing itself in the 1960s as “A Cheap and Ugly Little Car” manufacturer—as an early ad campaign read—to one that offers reliable and sporty, if quirky, cars that are ubiquitous in many coastal Snowbelt states.

The U.S. overtook Japan as Subaru’s top market in 2009, and today the company sells four times more in the U.S. than in its home market. However, it still earns far more from sales in Japan than anywhere else, and increased price competition in the U.S. has crimped profit growth.

Subaru’s net profit fell 25% in its last fiscal year to ¥282 billion ($2.51 billion). The company blamed increased discounts in the U.S., amounting on average to $1,850 per vehicle, up 22% from the previous year. That compressed Subaru’s profit margins from 17.5% to 12.4%, though still comparing favorably with the single-digit margins of most rivals, including Honda Motor Co., Ford Motor Co. and General Motors Co.

Subaru expects U.S. growth to continue with the Ascent coming to market, and has forecast a slight sales increase for its current fiscal year through March to 668,000 vehicles. By 2021, it envisions selling 800,000 vehicles in North America, mostly in the U.S.

“With our market share growth, we’re no longer niche,” said Bob Alvine, president of Premier Subaru in Branford, Conn.

Why do they even make concept cars? Production versions never look anything like concepts.

Prototype looks nice. The production might as well call it anotger kia.

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KIA are actually much better looking cars. But this one is just plain…nothing.

There has to be a reason because all manufacturers are consistent in this. They would have a hit here and they still might, just would have considered it if it looked like prototyoe. We should open a thread with other cars that look nothing like their prototype.

Subaru takes #1 spot, no doubt LOL
But it will be popular, sure.

I checked one out at the auto show for a few minutes. No idea why one would get it over Highlander, Pilot, CX-9, Traverse, Acadia, or the million other three-row SUVs out there. The Ascent seems antithetical to Subaru’s quirky utilitarian dependable image.

Agree, but Subaru enthusiasts will buy it. Best AWD, resale, safety and dependability will be good (I would expect), competitive pricing may sway some buyers from other brands.

Pricing just came out for Subaru Ascent, you can check it out on Subaru.com, there are 4 different models with price range from 32K - 44K. My lease is up in about 5 month on QX60, I will definitely check out Subaru Ascent, I believe it will be available this summer.

with new models like this are there favorable lease options or do they pretty much go for msrp?

You should be able to negotiate close to invoice or below, I think.

I am waiting for Subaru Ascent SEL with option 23.
Currently leasing Lexus GX460 and paying 620 monthly including tax, lease is ending next year.

Subaru could woo my by putting a turbo in the Crosstrek

They killed XT on Forester, so don’t hold your breath. They won’t be putting turbo in small cars, bar WRX.

I’m thinking about picking up a Forester XT before they go the way of the do-do bird…I think enthusiasts will be looking for them on the used car market in a few years…

You could also look at an EVO

You’re in Seattle right? They love Subarus up there. You wont have to worry about much depreciation at all

Correct. But there is still first year depreciation and so far my record ownership length is 30 months…

I hadn’t even heard of this! Subaru is just giving 9 customers a brand new one? I guess the age old adage of never buying the first model year stands true!