Subaru chases growth by adding more trims

Subaru of America has added a trim level to its largest vehicle — the three-row Ascent Onyx — as the Japanese automaker expands its strategy to appeal to new customers while retaining brand loyalists with blacked-out versions and other packages aimed squarely at adventurers.

The Japanese automaker's tactic mimics that of one of its chief rivals in the U.S., Jeep, which carved out niches with appearance and performance trims such as the TrailHawk and Overland.

"So much of our growth has been keyed in on conquest in general," explained Jeff Walters, head of sales for Subaru of America. "We're always looking for ways to appeal to new buyers."

Like the Outback Onyx, the Ascent Onyx features dark-toned exterior trim, including blacked-out badges and black 20-inch wheels. Based on its Premium line, the Onyx adds reverse gear automatic braking, a heated steering wheel and a hands-free power liftgate.

The Ascent Onyx follows on the heels of the spring introduction of the Outback Wilderness, a beefed-up, off-road-centric version of the two-row crossover that comes with a more-robust suspension, under-vehicle protection and a roof rack that can accommodate a rooftop tent and two people. Subaru has also launched Sport trims of its Forester and Crosstrek crossovers to appeal to younger buyers.

A survey this year by Naked Lime, a marketing company owned by Reynolds and Reynolds, found Subaru had the seventh-best customer loyalty rate in the industry at 49 percent. Six brands were above 50 percent loyalty in the annual survey, with Toyota topping all others as the only automotive brand to break 60 percent customer retention, followed by Ferrari, Lamborghini, Lexus, Honda and Ram.

Even brands with high retention rates have to find ways to keep consumers interested, curious and engaged when there aren't new nameplates to do so. That's one reason there are 14 models of the Jeep Wrangler and six different trim levels of the Toyota Tacoma.

"The challenge we have, just like any other brand, is to keep it fresh, keep it attractive, find ways to appeal to different groups of people — like a group of people that might be a little bit more in tune with the styling enhancements on an Onyx edition," Walters explained. The brand introduced Onyx trim and appearance packages with the 2020 Outback, and Walters said the blacked-out look "has done well for us. It's a decent part of our sales mix and we do find that it does bring in a different customer."

Adding trim levels can add to manufacturing complexity, said Doug Betts, president of the automotive division at J.D. Power and a former quality executive with several automakers.

"If a car has three trim levels with maybe 100 different configurations possible, and you add a different trim level, you're adding another 100 different configurations" to the plant, Betts explained. "It just makes it more complicated, but automakers are set up to deal with a certain amount of complexity already."

Walters said automakers always struggle to find a proper balance, not only with manufacturing complexity but also on the marketing and retail side.

"If you're looking at models within a car line or option packages within a car line, and it gets to be pretty low volume, at that point, it starts being counterbalanced with [the] need to be efficient and work with simplicity," Walters said. "You can't send out so many different variations that you have very little hope that the right car is going to be in the right place to get that right customer."

Despite the manufacturing challenges, Walters said Subaru is likely to expand further. He said the Wilderness package launched this spring on the Outback is likely to spread to other models.

"That's not just a trim level for a car line, but what we would anticipate and what we want to do is really look at Wilderness as a subbrand for Subaru, something that we can build upon and that we think is a terrific fit for our brand and what we're all about," Walters said.

The Ascent, which debuted in the 2019 model year, will become key to keeping young Subaru customers in the brand as their families grow, he said. The three-row "filled what was a doughnut hole in our lineup. We would do really well with people before they got going with their families, and at the tail end as their adult children were leaving the household. But that was an area where we were losing our customers for that period in their lives, and then they were coming back."

In its first full year on sale in the U.S. in 2019, Subaru sold 81,958 Ascents. But sales took a hit during the pandemic, dropping 17 percent in 2020 to 67,623. Ascent sales are down 8.4 percent through the first five months of 2021 to 23,181 as the automaker deals with microchip shortages and other supply chain problems.

"I look at that as a segment that's going to become increasingly important to Subaru," Walters said of the large three-row crossover.

"It's a little hard to kind of gauge results and performance over the last year and a half just because everything's so crazy, but when we get back to just normal chaos, that's a segment that I would anticipate will continue to perform well."