It is without a doubt that Subaru is on a roll these days. As mentioned in a previous blog post, the company is mulling expanding the brand and becoming a volume automaker or maintaining its niche player status. The automotive landscape has changed greatly this decade and smaller brands like Subaru have stood out by realizing incredible growth since the U.S. recession shook up the market. Parent company Fuji Heavy Industries Ltd. made a number of successful moves that spurred significant growth in demand for Subaru vehicles and now have put the competition on its heels.
Sales of the automaker’s existing nameplates continue to climb as the brand has shifted towards more mature vehicle designs and improved refinement while its new XV Crosstrek and BRZ models have attracted new buyers. However, the one aberration in the product lineup for years has been the underwhelming Tribeca. Throughout much of its nearly decade-long existence, questions arose over the purpose of the Tribeca as it has never sold more than 18,614 units in any given year. With Subaru now hotter than it has ever been, it appears the company is set on smoothing out any imperfections in its product portfolio, which means the Tribeca’s days are finally coming to an end.
The Subaru Tribeca came to the U.S. market in May 2005 and sold 14,797 units in only eight months. In the following year, the SUV’s first full year of production, it helped the brand break the 200,000 sales mark in America for the first time and contributed 9.3% of the company’s tally. Things began to sour for the Tribeca after that as sales greatly decreased, but seeing how sales for the middle SUV segment fell 85% between 2005 and 2009, it was difficult to discern from where the Tribeca’s struggles stemmed.
After sales bottomed out in the midsize SUV segment during the recession, consumers returned to the market and deliveries were up 125% by 2012; however, the Tribeca continued its decline as 2012’s haul of 2,075 units reflected the model’s worst year on record. For years, although the Subaru SUV encountered disapproval from critics due to its polarizing styling, poor power-to-weight ratio and high price, the Tribeca had an excuse for its sluggish sales in the form of a contracting segment, but once sales of SUVs rebounded it became clear that the Subaru was not merely a victim of a shrinking market. Instead, the Tribeca was an ill-conceived vehicle that has come to languish in the company’s growing product portfolio full of popular models.
As the middle SUV segment began its recovery in 2010, Ford released its latest version of the popular Explorer that December and saw deliveries climb by 215% between 2009 and 2012. Then, in September 2012, Nissan followed suit by launching its new Pathfinder and realized 195% sales growth year-over-year through the first nine months of 2013. While the competition moved quickly to capture a share of the growing SUV market, Subaru was busy focusing on refreshing its existing Impreza and Forester models in addition to rolling out its new XV Crosstrek and BRZ models. However, now that the rest of the product lineup has been tended to, the brand appears to be finally turning its attention towards its neglected midsize crossover offering.
Last week, the automaker announced that it will cease production of the Tribeca at its Lafayette, Indiana plant in January 2014, with final dealer deliveries occurring in February. At first glance, the move raises questions regarding what the brand plans to do until a replacement is developed, but removing the unpopular Tribeca from the equation is the first step toward picking up new sales in the growing midsize SUV segment. Subaru reportedly has plans to produce a new three-row crossover down the road with the intention of competing with the Nissan Pathfinder and Ford Explorer. As the midsize SUV segment continues to grow, replicating the successes of its other models will be critical once its new utility vehicle is released, but if the brand’s recently released products are any indication, it is expected that Subaru will not be repeating past missteps.
Per David Paris’ “Subaru Used Retention Update: Values Remain Strong” blog post from earlier this month, the Tribeca’s 2013 three-year-old value retention score of 61% is respectable and represents the third-highest in the segment behind the Honda Pilot and Toyota Highlander. Now that the brand has announced it will no longer manufacture the Tribeca past this upcoming January, the SUV’s retention figure is likely to be affected. As is the case with many models that are discontinued, used value retention declines and it should be no surprise if the Subaru utility vehicle suffers the same fate. After years of disappointment, the Tribeca is finally not long for this world as it makes way for a new beginning. The midsize SUV segment is ripe with opportunity, and with Subaru starting with a blank canvas, it will be interesting to see if the automaker can continue its hot streak and produce another winner.