5 Reasons Why 2014 Subaru Forester Sales Could Keep Climbing

Fuji Heavy Industries (NASDAQOTH: FUJHY  ) has every right to gloat over the latest achievements of its automotive division, Subaru. The company's 2014 Forester recently won the Motor Trend Sport/Utility of the Year for 2014. In the contest's six-year history, this is the Forester's second win, and Subaru's third, in that hotly contested category.

The 2014 Subaru Forester XT. Photo credit: Subaru.

As critics rave about the compact SUV's design, engineering, and performance, buyers are queuing up before dealer lots. Before launching the 2014 Forester, Subaru had in mind a monthly sales target of 8,000 Foresters  in the U.S. -- but it underestimated the new Forester's appeal. Subaru easily sold around 10,000 units every month, and in August and October sales went north of 12,000 units.

While investors surely love this winning streak, they may also wonder whether it's sustainable. Fortunately for Subaru, there are plenty of reasons why this run will likely continue. 

5 reasons why Forester's sales could keep rising
1. The small SUV/ crossover segment is growing fast: Small families with babies and pets are increasingly turning to small SUVs and crossovers -- utility vehicles built on car platforms. These vehicles are less bulky, more fuel-efficient, less expensive, and easier to maneuver , and take up less garage space than bigger SUVs.

LMC Automotive estimates that crossover sales grew from 405,000 in 2000 to over 1.6 million last year.  And, in 2003 sales have already crossed that mark with two months to spare. The growing popularity of crossovers augurs well for the Forester.

 2. The Forester appeals to Americans: The Japanese automakers understand American tastes uncannily well. The design and appearance of the Honda (NYSE: HMC  ) CR-V or Toyota (NYSE: TM  ) RAV4 are as American as you can get; no wonder they dominate the popularity charts year after year.

Subaru has also honed its skills in this department. The Forester is much wider and roomier than before, customized to American preferences. Via this clever redesign, the new Forester has secured a position for itself beside the segment leaders.

Vehicle

2013
YTD

% Change over 2012

2013 Market share

Honda CR-V

251,636

7.7%

14.3%

Ford Escape

250,543

13.9%

14.3%

Chevrolet Equinox

202,583

11.2%

11.5%

Toyota RAV4

177,832

22.6%

10.1%

Nissan Rogue

137,588

16.4%

7.8%

Subaru Forester

96,953

56.7%

5.5%

Source: GoodCarBadCar.net 

3. AWD is a big attraction: Most compact crossovers including CR-V and RAV4 offer front wheel drives (FWD) as a standard feature, and all-wheel drive (AWD) as an option, making Forester's standard AWD is a big scoring point. Whether climbing up mountain roads or simply going to the neighborhood supermarket in a snowy winter, people find the AWD extremely handy.

People also often associate AWD with additional safety, which works for Forester in areas that do not get snowfall. Subaru has been trying to build a presence in the Sun Belt for quite some time, and 2014 Forester's top safety rating from the Insurance Institute for Highway Safety will bring it closer to this goal.

 4. Good mileage: Forester's fuel efficiency is encouraging for an AWD crossover. The 2014 model achieves 22/32 mpg city/highway with the base engine, according to automotive website thecarconnecton.com. In comparison, the 2014 CR-V and 2014 RAV4 with base engines and FWD offer 22/31 and 24/31 city/highway mpg, respectively.

5. New design: The 2014 model year marks a total makeover for the Forester. Subaru fans are revelling in the new features, like more interior space, upgraded materials, and turbocharged engines. And their fondness is showing up in the new Forester's sales numbers.

The 2014 Forester also distinguishes itself from its competition through its low beltline and large windows, which allow very good visibility. Automotive website newcars.com says that many crossover models have a coupe-like tapered window design, which limits visibility.  

Ever since the 2014 Forester arrived at the dealer lots in spring, there has been no looking back for it. In October, sales increased by an incredible 137% year over year .

 

Source: GoodCarBadCar.net 

Wrapping up

The U.S. is Subaru's largest market, accounting for nearly half of its total sales, and it has a big bearing on the company's future prospects. Luckily for investors, the company's heading in the right direction.

Subaru will most likely double its 2009 U.S sales this year. And while most of its models sell well, but the Forester is a perennial favorite. It alone has accounted for 28% of total U.S. sales in 2013. The new Forester's bright prospects portend well for Subaru's future success in America. 


Read/Post Comments (3) | Recommend This Article (5)

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  • Report this Comment On November 30, 2013, at 1:42 PM, TheOstrich wrote:

    I don't know about the Forester but the RAV4 has got to be one of the worst riding vehicles in existence. The one I rode in was new and it felt as if it didn't have any shock absorbers. Absolutely terrible.

  • Report this Comment On December 01, 2013, at 11:29 AM, AcuraT wrote:

    While this article is right about everything it says, it ignores Subaru's biggest problem - capacity. Subaru has no more capacity to build any more vehicles. Demand has outstripped its ability to supply the market. As a result, sales are capped for now around 10,000 to 12,000 a month. That is it. Toyota is going to help Subaru in 2015 when it abandons the factory in Indiana where it builds its Camry and Subaru builds the Legacy/Tribeca/Outback. That will give Subaru needed capacity to add the same platform Forrester - in a couple more years. Until then, unless Subaru invests to build a new factory or heavily invest in expanding one (which it is reported it is currently considering/doing), they won't be selling any more Forresters any time soon.

  • Report this Comment On December 24, 2013, at 3:20 PM, tttown1 wrote:

    MY wife is hard to please but she loves the Subaru Forester limited. She gets about 36 MPG on the Highway and around 28 mpg around town and it is so easy for me to get in and out of. unlike the Toyota Prius which almost killed by getting me me stuck in snow in the middle of the road in winter as a result of a lack of Traction Control release button like their Sienna has.

    The 2014 Subaru Forester HAS a traction control release button on the Dash and in the limited THE X mode button that can really get you out of deep snow with Snow Tires.

    I JUST CANT SAY ENOUGH ABOUT THIS SUV!

    BUY IT

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