Earlier this year we posted a blog on Subaru titled, From Rally Stage to Center Stage: Fast-Rising Subaru Holds its Future in its Hands, where we examined the recent year-over-year sales success of the brand and its growing opportunity to escape the shadows of its larger peers in the hopes of becoming a major player in the mainstream segment.
In the aforementioned article it was mentioned that ten years ago Subaru fit the profile of a small automobile manufacturer with a product portfolio consisting of only four models, total yearly sales of nearly 189k units, and total market share of 1.1%. A lot has changed for the brand over the past decade, and in 2012 total yearly sales almost reached 339k units, good for a 79% increase over where things sat ten years ago. During this same period total brand market share nearly doubled as Subaru was able to capture 2.3% of the total mainstream market.
With all of the recent success of the brand, one of the most appealing reasons to own a Subaru model is the high rate of used value retention garnered by most of its models. Let’s take a look at some examples of retention and how Subaru’s most popular models have trended relative to their closest direct competitors. For this comparison we will use NADA’s October 2013 average trade-in values for 3 year old units in relation to each model’s original typically-equipped MSRP.
Looking first at the compact car segment, over the course of the past five years the Impreza has remained towards the top of its respective class ranking. So far this year, a three year old Impreza has retained nearly 72% of its original MSRP, seven points higher than the second place Hyundai Elantra and nine points more than the segment’s volume-leading Toyota Corolla. For 2013, both the Honda Civic and Mazda3 are each currently retaining about 60% of their original MSRPs, while the fleet-heavy Nissan Sentra sits at the bottom of the pack with an average of 58%.
Moving onto slightly larger mid-size cars, much like the compact car segment Subaru finds itself at or near the top of the list for most of the past five calendar years. So far in 2013, an average three year old Legacy has retained nearly 63% of its original MSRP followed by the Hyundai Sonata with second place retention figure of 61%. The big three Japanese brands Honda, Toyota, and Nissan all fall slightly behind within a tight range of 53-54%. Last place in this grouping goes to the only domestic in the mix, the Ford Fusion, which is currently retaining slightly less than 50% of its original MSRP.
As for the compact utility segment, the Forester hasn’t fared quite as well as its competition, but it’s still very competitive within the grouping. While the Forester isn’t segment-leading in terms of retention, it does consistently rank towards the top of the pack. So far in 2013, the Forester’s retention figure of 65% is good enough for a third-place ranking within the group, only coming in slightly under the Honda CR-V’s score of 68% and the segment-leading Kia Sportage’s retention rate of 72%. The Hyundai Tucson and Toyota RAV4’s retention rates come in slightly under the Forester, while the Mazda CX7 brings up the rear of the pack.
Much like the compact utility segment, mid-size utility retention for the Tribeca historically ranks towards the middle of the pack. The Tribeca’s 2013 three year old retention score of 61% is good enough for the number three spot in the group. The Tribeca is currently four points behind the Honda Pilot, and twelve points behind the segment leading Toyota Highlander. The Hyundai Santa Fe, Mazda CX9, and Nissan Murano represent the bottom of the pack with a retention range of 55-60%.
What do these retention figures mean in the real world? The answer is simple really; higher retention is equal to lower deprecation, which ultimately lowers the overall cost of ownership. While compact and mid-size utility retention is not the best for the brand, within the compact and mid-size car segments buying a new Subaru will yield the some of the best returns down the road.
As a brand, Subaru is performing better and better with each passing year and favorable retention values serve as a positive correlation to the company’s growing popularity. The strong value retention complements the automaker’s significant new sales growth, and is one more reason for Subaru’s positive momentum to continue going forward.