Over the years, Fuji Heavy Industries (NASDAQOTH:FUJHY), the parent company of Subaru, has increased the Outback in size, moving from a smaller, zippier wagon, to a larger, heavier vehicle. Has this been a good move by Subaru or are customers up in arms about the change, refusing to buy the model?
Although the design of the Outback has changed, it's purpose and practicality has not. As Motor Trend wrote in its review of the 2014 Outback:
"[Subaru] moved from selling smaller wagons to making unibody crossovers, and these vehicles resonate with buyers. The company's Forester and Outback have gotten larger over time, but not so large that they scare off loyal Subaru fans."
A deeper look at the Outback
Let's examine how the car size has increased over time, starting in 2000. The blue line represents the overall dimension of the vehicle by combining the height, length and width. The green data represents the vehicle's cargo space. Here are the results:
For instance, in 2008 the Outback's cargo space climbed to ~34 cubic feet from 28 cubic feet. The vehicle's miles per gallon fell from 21.5 in the city and 27.5 on the highway in 2007, to 18.5 in the city and 25.5 on the highway in 2008.
Although to be fair, the miles per gallon in 2010 actually increased slightly from 2009, despite the vehicle gaining in overall size, but its acceleration took a hit.
But Subaru appears to have recognized the importance of a bigger ride, which is both more comfortable and convenient for American customers. Looking at the vehicle's sales customers would seem to agree.
|Year||Outback Sales||Change (year-over-year)|
|2014 (year-to-date)||62,755||Not Available Yet|
Currently, the Outback is on pace to top its sales from 2013. Seasonally, the second half of the year has generally been stronger for the Outback than the first half of the year, dating back to 2010, so we'll see if that's the case this year as well.
As you can see in the chart above, Outback sales increased somewhat drastically in 2010. But the sales spike likely had less to do with the vehicle's size and more to do with the economy, which was in "recovery mode" in 2010.
Overall however, sales have trended higher over the past five years, indicating that customers do indeed enjoy the added size to their ride.
While "Americanizing" today's automobiles to be larger and larger is sometimes frowned upon, most enjoy the added comfort and increased cargo space.
According to the Wall Street Journal, car sales in 2014 -- as in, actual cars -- are up just 0.4%, when compared to the same time period in 2013. On the other hand, crossover sales are the highest growing segment, with a 12.9% increase in sales, while large, small and luxury SUV sales are up 11.4%, 10.9% and 10.3%, respectively.
While customers love the compact size of the older Outback models, the newer ones have perks too. Clearly overall, customers feel comfortable trading up to a larger model, as sales have increased each year as a result.
Based on strong overall auto sales in the United States and the Outback's tendency to sell better in the second half of the year than the first half, I'm looking for it have a strong finish to 2014 and end the year with a modest sales gain of approximately 5%. Look for the overall trend of SUV and crossover sales to continue higher.
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Bret Kenwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.