Subaru of America’s President and CEO Tom Doll, has led Subaru through it’s most successful stretch with an industry-best 11 straight years of sales records in-a-row and was hoping for its 12th year in 2020, but that will come to an end. As with all automakers, Subaru has been hit hard with the coronavirus epidemic. Where is Subaru going now and how will it affect your car purchase?
Tom Doll speaks to Bloomberg's Scarlet Fu and Romaine Bostick about the impact of the coronavirus on the auto industry and where things are going. It can give 2020 Forester, Outback, Crosstrek, and other Subaru car shoppers an idea of what’s ahead.
Scarlet Fu says there are indications that American consumers are under a lot of financial pressure and stress. She says about one-quarter of Ally Financial’s auto loan customers, around 1.1 million borrowers are asking for payment deferrals. When asked how the CIVID-19 pandemic is affecting Subaru, Tom Doll had this response.
“We're seeing some customer pushback regarding their credit situation, but not really as much as we’d anticipated. The Subaru customer, in general, is a very affluent type of customer. And as a result, they really haven't asked for the types of payment deferrals that you’re seeing from other manufacturers relatively from that standpoint. We're in pretty good shape", says Doll.
Romaine Bostick asks, “How much do you expect Subaru and the industry sales to decline in April, and are you able to even make projections for the second quarter for 2020 as a whole?” Doll says Subaru of America will probably be down in April somewhere between 55 and 60 percent, about the same as the overall auto industry. “ We're going to probably fall in that range as well,” says Doll.
The 2020 Subaru Outback is made in Lafayette, Indiana
Doll said they are still trying to evaluate what projections for the second half of the year will be. “Obviously it will be less than the 725,000 vehicles we were anticipating on selling in 2020,” Doll says the two Subaru plants will restart on May 11. Subaru Indiana Automotive produces about 50 percent of SOA’s all-wheel-drive vehicles they sell in the U.S., and the plant in Japan produces the other 50 percent.
What’s in store for customers?
There could be additional incentives for Subaru customers in the coming months. When asked about a program like Cash for Clunkers, Doll says, “I think that type of a program could be beneficial.” Tom Doll wants to see a stimulus package for the auto industry that will be beneficial for customers. He says, “We are currently working through our trade association and our lobbying activities in Washington to determine whether or not a Cash for Clunkers program might be in the winds for this year.”
Doll says Subaru and other automakers will need some kind of help. “Something is going to have to stimulate the car industry as a result of this massive shutdown that we’re experiencing. I'm fearful that if we don't get some type of stimulus it's going to take a couple of years for it to get back to this 16.5 to 17 million level of sales we were at. It's vitally important to make sure that this industry gets back on its feet as quickly as possible."
Doll finishes the interview telling Bloomberg what the automaker is doing in the community to help people in need now. “What we're doing is partnering with Feeding America and we're going to be donating 50 million meals. They have roughly 200 food banks around the country that our retailers can get involved with. We have a long history of being able to give back which we think separates us from a lot of the companies that are out there. And we really do want a relationship with our local communities and with our customers to make them better and to make our society better as a whole.”
Customers looking for a new 2020 Subaru Forester, Outback, Crosstrek, Ascent, or another all-wheel-drive model could see additional incentives in the coming months. Stay tuned.
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Denis Flierl has invested over 30 years in the automotive industry in a variety of roles. All of his reports are archived on our Subaru page. Follow Denis on Facebook, Twitter, Instagram, Subaru Report. Check back tomorrow for more Subaru news and updates at Torque News!
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Photo credit: Crosscreek Subaru