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Subaru cuts prices to better compete against two-wheel-drive ‘pretenders’

on August 4 2015 | in Highlights, Industry news, Latest news | by | with Comments Off

Subaru NZ has cut up to $5000 off the price of its SUVs in a bid to attract more buyers to what managing director Wallis Dumper says is the real world of all-wheel drive and foreign territory for two-wheel-drive ‘pretenders’.

It has also chopped $2000 off the new entry-level Impreza S-Edition, adding kit and a conditional free three-year service plan, again to encourage new and used small car buyers to look at an all-wheel-drive (AWD) alternative with a 2.0-litre engine.

“At $29,990 the Impreza (above) is now positioned better price-wise than a front-drive European car with a 1.4- or 1.6-litre engine,” he said. “I know what I’d prefer to be driving on New Zealand’s roads.”

The S-Edition is a facelift that replaces the Impreza 2.0i-X, which sold for $31,990. Its role in the Subaru line-up is as a “brand conversion” model, says Dumper, one priced specifically to “convert non-Subaru people.” It’s one of four 2015 Subarus either upgraded and cut in price, or upgraded but at the old money. The Outback and Legacy are unaffected.

The XV and Forester SUVs join the Impreza S-Edition in the first category, the XV reduced by between $1000 and $4000 and the Forester by between $3000 and $5000. The go-fast WRX and go-faster STi are in the second category, price as before between $48,990 and $64,990.

The upgrades (cosmetic, infotainment) and new prices are the result of two years of negotiations with the factory in Japan, helped by what Dumper calls “an aligning of the planets” and the growth of small SUVs in New Zealand.

Subaru managing director Wallis Dumper

Subaru managing director Wallis Dumper

“We worked with (Subaru parent) Fuji Heavy Industries (FHI) for a long time on recommended retail prices and have closed the gap enough to attract more buyers,” he said.

“Being true to our DNA, we put forward the case that if the small SUV is growing we can hold our high-ground all-wheel-drive position but need to be within reach of customers who actually care about the real features,” he said. “Style with substance as such has a strong niche. It’s how we built Subaru in New Zealand.

“The great thing is that sometimes the planets align – we got FHI reconsidering price changes and upgrades at a time when we had a more favourable exchange rate between the NZ dollar and the yen.”

The galactic get-together came when the NZ dollar was buying 89 US cents and 92 Japanese yen – now it’s buying 66 US cents and 81 yen. “Frankly the current exchange rate is not good for us; we are hoping the dollar recovers,” said Dumper.

“Believe me, the pricing might move up quickly in 2016, as we can only hold some of the recommended retail prices (RRP) for a period. We can’t hold them if the exchange rate stays where it is today. We need to be profitable, as do our dealers. At this RRP level we can do that only until early next year.”

Dumper said he wanted to capitalise on the benefits of Subaru’s full-time AWD in a market overflowing with two-wheel-drive ‘pretenders’. “We see competitors that are literally confusing consumers with acronyms like VDC (vehicle dynamic control) and other stability-type stuff that has nothing to do with all-wheel-drive.

“They are SUV-lookalike models that won’t actually go anywhere other than down a tarseal road. It’s like buying a fake watch. Customers, by just looking at a car, struggle to see what AWD actually is and does,” he said.

“You have to drive it and it’s best to do that in really bad weather or on a really bad road. That’s when you understand why AWD is the ‘invisible advantage.’  It’s the whole Confidence in Motion thing.”

What’s new in pricing:

  • Impreza – 2.0i S-Edition $29,990, down $2000
  • XV – 2.0i manual $37,990, down $1000; 2.0i auto $37,990, down $3000; 2.0i-L auto $40,990, down $4000; 2.0i-S auto $44,990, down $4000
  • Forester – 2.5i auto $39,990, down $5000; 2.5i Sport auto $44,990, down $3000; 2.0 diesel auto $46,990, down $3000; 2.5i Premium auto $49,990, down $5000; 2.0 XT auto $54,990, down $5000





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