Subaru South Africa is a distributorship of fully-imported vehicles from Fuji Heavy Industries in Japan and has been fully-owned by brand-management giant Barloworld since 2001, although the Subaru brand has been in the country for the last decade.
Current and predicted growth has resulted in the company expanding its headquarters in Linbro Park, Gauteng, and undertaking internal restructuring, with new departments being established and the staff complement being increased.
“We are experiencing an exciting time in Subaru South Africa’s history, having posted a 29% growth last year, with sales of close to 700 units,” remarks Subaru South Africa MD Teresita van Gaalen.
Such growth is good news for the company, which is not involved in exporting and therefore does not receive credits to offset import costs through the Motor Industry Development Programme (MIDP).
“With the extension of the MIDP to 2012, we will have to take a rethink in terms of our plans and how we execute them and maybe look into ways that will allow us to benefit from the programme,” observes Van Gaalen.
She indicates that one such way may be for Subaru to do some component sourcing from South Africa.
“In a market that has become stagnant, if not in decline, we are extremely lucky that we seem to find ourselves in this sustainable growth phase with all the signs of this continuing, despite domestic market trends to the contrary,” indicates Van Gaalen.
With such consumer choice in the domestic market (there are about 800 models available in the country) it is a difficult market to establish a share in.
The company currently holds 0,3% of the passenger vehicle market in South Africa and believes it is on track to achieve its aim of holding 1% of the market by 2006.
“Once we reach the 1% market share mark, I believe we will then be in a very competitive sphere and able to truly fight for further market share,” says Van Gaalen.
In 2001, the volatility of the Subaru sales was quite significant in terms of how the market behaved.
However, last year it became far less volatile and was seen to hold its own much better.
Subaru is known for its technology, combining the horizontally-opposed boxer engine and the symmetrical all-wheel drive transmission, with the focus of the company being on preserving and exceeding this combination.
“The Subaru version of all-wheel drive is unique in that it is permanent, that is, an engineered concept in the chassis itself, and is not a reactive mechanism as is the case in other vehicles with all-wheel drive,” points out Van Gaalen.
“The horizontally-opposed boxer engine sits low and flat, giving an extraordinary amount of balance and a low centre of gravity,” she continues.
Clever use of aluminium in the vehicle, in the engine and panels, makes a Subaru both light in weight and aerodynamic.
There are four Subaru models available in South Africa, namely the Impreza and the Legacy in the driver executive sedan segment, and the Forester and the Outback in the leisure and lifestyle segment.
“Subaru is a unique brand in many ways.
“It is not only the technology and the engineering that sets it apart, but also the fact that there is not such a proliferation of models – Subaru has well-proved formulas and improves upon those, rather than continuously creating new products,” remarks Van Gaalen.
Subaru South Africa has been placing much effort on repositioning the range in the country in order to hold a broader appeal.
In 2001 the company had an 80:20 split, selling 80% to existing customers and gaining 20% new market share, to a 60:40 split last year.
This has been achieved through a bold stance the company has taken on pricing.
“We are probably offering the best value for money on the local market, in that Subaru is priced similarly to passenger sedan cars, yet has the superior technology of all-wheel drive and a boxer engine, which offer invaluable safety benefits,” believes Van Gaalen.
Avis Rental is currently Subaru’s largest customer (Barloworld has a 26% stake in the car-rental company), accounting for 20% of its sales.
“This provides a means to penetrate the market and stimulates the used-car market for Subaru,” remarks Van Gaalen.
There are 18 Subaru outlets in Southern Africa, of which ten are fully-fledged dealerships.
Subaru as a brand is, in fact, seeing growth worldwide, especially in Australia and the US.