Subaru won’t engage in a price war with its Chinese challengers, vowing to stick to the formula that has made it one of Australia’s best-selling brands even if it means raising prices.
The Japanese brand has been leap-frogged in the sales charts by MG and is facing an increasing threat from GWM, specifically its Haval models, which compete against Subaru’s core models; the XV-turned-Crosstrek and Forester.
A key to the success of the Chinese brand’s sales growth in Australia is lower entry-prices than Japanese, South Korean and European competition. Case-in-point, the MG ZS small SUV is priced from $23,990 drive-away while Subaru’s competitor model, the new Crosstrek, begins at $34,990 plus on-road costs.
What’s more, the entry price to the Crosstrek range is $1800 more than where the XV ended up in December 2022, but is more than $5000 dearer than it was 12 months ago as car makers contend with higher material costs in the post-pandemic economy.
But Subaru Australia managing director Blair Read is unconcerned about the Chinese challengers and the impact it could have on his brand’s sales position.
“You’ve got to back your product,” Read told CarsGuide. “Subaru has always had strong customer retention and strong retained value, so those are two really strong points that our customers give us feedback on.
“We’ve got to make sure we stay true to the brand positioning. Competitors will come into the market in different ways, and you’ve got to make sure that you’re true to your positioning and not try and be everything to everybody in the market.”
Instead, Subaru will rely on its reputation and image as a rugged and capable brand to sell its core models – Forester, Outback and Crosstrek. And so far in 2023 it appears to be working, with the brand’s sales up more than 43 per cent to the end of April.
“You’ve always got to remain competitive, so we focus on doing the best job with what we’ve got. Our job is really to communicate to customers the Subaru difference – the technology, what it can do for them and what it means,” Read explained.
“If you look at it, the Australian market has had a lot of change in the last five to 10 years. If we look at our market share, it’s been steady over that time, so we’ve been very steady.
“We’ve been able to hold our ground through some strong model names – Outback, Forester, XV and now Crosstrek – which have all played very strongly in their segments. So, our big focus is not so much looking at competitors but making sure we do a really strong job with the product we’ve got.”
Keyword: Subaru won't cut prices to compete against emerging challenger brands like GWM Haval, MG and Mahindra: 'We can't be all things to all people'