Why Subaru Can't Meet New Forester Demand And What They Can Do To Fix It
Subaru has the most loyal customers, and they are willing to wait to get new models like the 2022 Forester compact SUV and the 2022 Crosstrek subcompact SUV. How long will they keep waiting, and how can Subaru fix their lack of inventory?
Demand for the Subaru is so high customers are willing to wait
A report from Automotive News (by subscription) says customers are ordering new models like the Forester and Crosstrek and waiting for them to be built and shipped from Japan. Subaru CEO Tomomi Nakamura told AN its backorders now stand at around 45,000 vehicles in the U.S. The excessive number is because Subaru of America has so few new cars on the ground to sell.
The AN report says, "Subaru's U.S. inventory of vehicles has dipped to a super-tight five-day supply (data from Cox Automotive). Its normal comfort level is 45 days. And the popular all-wheel-drive niche brand is still adding about 10,000 vehicles a month to the swelling backlog."
The problem is SOA has few models to sell
Subaru of America could only sell 3,719 Forester models last month compared with 12,211 in November 2020 and dropped the most of any carline with a decrease of 69.5 percent.
photo credit: North Fort Lauderdale Subaru
Subaru manufactures the Forester and Crosstrek in Japan, supplying all global markets. According to a report from Subaru, the microchip shortage has dropped production by 40.3 percent in the last four months.
How does Subaru accommodate their Forester and Crosstrek customers?
Subaru of America adopts a sold-order system in which customer orders are logged somewhat like backorders. "This system existed from years ago, and when we have abundant inventory, we don't use it. But now, we've put it into action and evolved the system to make it better," Nakamura told AN.
Many orders are for the Outback and Forester Wilderness models
Nakamura says, "When you look into the sold orders, they aren't for the basic models but the unique or high-end models. Like the Wilderness editions of the Forester and Outback that we launched this year. The customers putting in orders for these vehicles are willing to wait."
How can Subaru fix their low Forester and Crosstrek inventory problem?
Subaru of America is the Japanese automaker's largest market by far, selling close to 70 percent of its vehicles. But only 35 percent of its cars are manufactured by Subaru Indiana Automotive (SIA).
Subaru has not said this, but we think the Japanese automaker needs to shift the Forester and Crosstrek production to the U.S. plant in Lafayette, Indiana. Or like Mazda, partner with Toyota and build a new plant in Alabama or Texas to build the 2022 Subaru Forester and 2022 Subaru Crosstrek. The plans should start now as Forester and Crosstrek demand increases each year.
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Denis Flierl has invested over 30 years in the automotive industry in a consulting role working with every major car brand. He is an accredited member of the Rocky Mountain Automotive Press. Check out Subaru Report where he covers all of the Japanese automaker's models. More stories can be found on the Torque News Subaru page. Follow Denis on Facebook, Twitter, and Instagram.
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Photo credit: Subaru USA