Imagine a car manufacturer with sales that rose 5% in the first 11 months, against a flat U.S. market. Imagine a car company that only has a 23-day supply of vehicles on dealer lots, compared to an industry average of 72 days. Imagine a car company rated number two in the Consumer Reports 2016 Auto Issue. That company is Subaru.
This was the year in which Subaru climbed out of relative anonymity. The company did not have any scandals or recalls of millions of units. It did not have any flashy model introductions at major car shows. It did not flood the media with advertising. It sold cars basically on competence.
“Days to turn” is among the best, but least-known measures of a car manufacturer’s success. It is fundamentally how long dealers keep a car company’s inventory in stock. No other car company was anywhere near the low 23-day count for Subaru in October. Subaru did not have a single month in 2016 in which its figure rose above 30. In March and April, the figure was 19.
Across the industry, days to turn averaged 72. The number was never below 60 in any month of 2016. It has gotten larger since the year has passed, up from 62 in January. By contrast with Subaru, the number for Fiat Chrysler Automobile N.V.’s (NYSE: FCAU) Ram pickup division was 128 in October. Dodge and Fiat were both over 100.
Subaru does not have the sort of parent company most car manufacturers do. It is owned by huge conglomerate, Fuji Heavy Industries. Its first cars were produced in 1953. Among the Japanese car companies, it sits behind huge Toyota Motor Corp. (NYSE: TM), off and on the largest manufacturer in the world, as well as Honda Motor Co. Ltd. (NYSE: HMC) and Nissan. It sold 551,955 cars in the United States in the first 11 months of the year.
Industry experts continue to wonder at Subaru’s success. Among the reasons may be that it was early to the market with a lineup of all four-wheel drive cars, which have become a growing part of the entire industry. Subaru builds sturdy but mostly boring cars. The exceptions are its sexy BRZ coupe and ultra-fast WRX STI, a favorite among rally drivers. Subaru has only seven basic models. None has a base price above $26,000.
Why does Subaru do so well? In an industry that has had a rocky year, it has been a pillar of the ordinary.
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