Subaru acknowledges a toughening economic condition has affected prepping a sales expedition for its first electric-assisted cars.

EVER imagined entertaining a hybrid car that perfectly conforms to New Zealand conditions and expectation?

Subaru New Zealand stakes this ability within argument for why the long-awaited e-boxer editions of the XV and Forester will resonate well with Kiwi buyers. Hence a ‘made for our environment’ catchphrase standing tall in the marketing pitch that also encourages this as a better way of keeping New Zealand beautiful.

The Auckland-domiciled distributor also cites high customer excitement since last week’s announcement of the national selection ($42,490 XV Sport, and Forester Sport and Premium, respectively at $47,490 and $54,990).

Seems hundreds of interested car buffs have been contacting the distributor directly, or via dealers, to signal strong enthusiasm to acquaint with Subaru’s first foray in electric driving.

For their part, Subaru NZ is keen to enforce cars taking the 12kW electric motor (and 118V battery) paired to the existing 110kW/196Nm 2.0-litre flat four, which combine to drive all four wheels via a slighty recalibrated version of the range-wide constantly variable transmission are not getting a soft serve, in sense that these editions are true to Subaru tradition.

Maintaining all core strengths our market associates with the brand was critical, the brand says. It asserts they will be capable of achieving everything any other Subaru does. In short, there’s no dilution of that famous DNA and this is the start of a new journey for the brand, the first step toward a more sustainable future.

And while accepting that the hybrid system the cars carry is a walk on the mild side when it comes to considering what else is becoming available from a global car market pushing ever more into electrification, it nonetheless assures the ‘self-regenerative’ set up (translation: It’s old school and cannot quality for electric car status because there’s no facility for external recharging) will achieve tangible and easily-attained improvements in economy and emissions.

Wallis Dumper and daile stephens (below)

Still, many questions remain. Is Subaru already behind the times with a drivetrain that others in the car-making game are treating as a sunset tech, why hasn’t the Outback also achieved this option and, gosh, when supply is set to be limited, how easy will it be to secure these models?

Here’s the outcome of a sit down with Subaru NZ managing director Wallis Dumper and marketing manager Daile Stephens.

MotoringNZ: Let’s start by exploring the sales expectation. You’ve already indicated the hybrid are in limited supply - just 20 examples a month and the first full shipment not coming until September – and also signal allocation is being managed through head office. What can customers expect from all this?

Dumper: Covid-19 created some operational disruption and yes, we needed to change the business model a little bit for this car. Our dealers only ever run on a months’ stock; we’re not like other brands. Hybrid supply is tight and, based on our research, we know we can sell every one. The last thing we want is having one or two dealers buying them all, so we have gone to an allocation system to ensure we can spread them fairly.

Stephens: Our dealers still buy the cars from us. The phase we are going through now is a pre-launch: The dealers have demonstration cars (from June 1). It’s about trying to be a responsible distributor and maintaining careful management of our inventory.

MNZ: You’ve gone on an economy drive before with diesel and that proved short-lived (2013 to 2017);. What makes this hybrid pitch any different?

Dumper: I don’t think it’s about thrift, it’s about capability and satisfying an emergent need. It’s a mild hybrid, we’re not pretending it’s anything more, but this is about evolution of the brand and we have to go that way.

Stephens: Diesel was a lot different. This (hybrid) is a clearer pathway to a more sustainable future. We were late to the diesel party anyway, it was over-priced and it was always going to be a tough ask, to be honest.

:With diesel we weren’t really set up for success where with this (hybrid) we feel we are. We feel we are priced thereabouts with many, though acknowledging that one is particularly sharp, and the return from our focus group suggests we have it right with the $5000 premium we’ve set for hybrid. We’ve had hundreds and hundreds of registrations over the last week which suggests there is a desire and hunger for hybrid. We didn’t see that around diesel. There’s a completely different feeling around this (hybrid) product that wasn’t there with diesel.

MNZ: Your Outback is a key model here and yet there’s no word on when, or if, it will go hybrid. Any news on that and how much urgency is there for that car to adopt this system?

Dumper: There’s not a lot of urgency. From what we can see the smaller style of cars are more popular as hybrid and EV types.

Stephens: Given that Outback has been one of our most commercially successful vehicles it would be awesome to have one (a hybrid variant) if that was an option. As far as we know, there’s nothing on the horizon. But something might be going on, but is being kept secret. It might go to full electric for all we know.

MNZ: The motoring world is moving fast toward electrification and, in the overall scheme of things, going hybrid is a small-scale adoption. Really, too, Subaru could be seen as a slow mover; others have had hybrid for years. So how long before it engages at a higher level?

Stephens: We (Subaru Japan) announced in February that by 2030 at least 40 percent of the models that will be available globally will be electric or hybrid. By the mid 2030s there’s another goal of applying electrification technologies to all all Subarus sold worldwide. There’s a clear pathway.

Dumper: Within a couple of years we might be able to challenge that. As for being a late adopter? Yes, we’re late at adopting part of it but we also know there are still a lot of brands that do not have what we have. Some of them are much bigger brands than ours.

MNZ: Given that this is an adoption of Toyota technology, are the brand’s fortunes in this regard tied to Toyota’s own programmes?

Dumper: It’s not Toyota technology. Our engineers in Japan are adamant that it is our own. The manufacturer also makes product for Toyota and, yes, Toyota has shareholding in Subaru and, yes, there is product sharing. And they are both self-generating. But ours is quite different. Look at what they do with Lexus, it’s not the same.

MNZ: For all their strengths, your drivetrains have been easy targets for criticism in respect to economy and emissions. The boxer engines tend not to be top performers for output and economy and being paired with a CVT gearbox and symmetrical all-wheel-drive system also has a consequence. Is that why the economy gains claimed for your cars (14 percent for the XV in urban, seven percent overall, and nine percent combined and 19 percent urban for Forester – when comparing to the 2.5 – but according just to in-house and Australian ADR81/02 standard as it has not yet been certified under the WLTP regime) are less extreme that those cited for, for instance, those Toyotas that avail in hybrid and none-hybrid forms?

Stephens: We do loads of fuel economy comparisons and, more often than not, we are in the top few against our competitors. Pre-2008 yes, we could be criticised on fuel economy, but not since then, not with the technology we have now. Unfortunately, there is a hangover of perception versus reality. But we believe we are up there with everybody else

Dumper: We want to be all-wheel-drive, that’s part of our DNA. Likewise with our boxer engines. We have the pricing where it needs to be and we can hold the pricing. We’re only a little bit above one of the world’s largest manufacturers (of hybrids) and a lot of other brands that have this technology are dearer than us. Our story is sustainable.

MNZ: What do you say to those people who might wonder if this is just an exercise of developing a Green vibe that might be challenging to prove. Overseas’ testing of these models has indicated that it is not entirely easy to achieve the cited economy improvements. Plus of course, even if the targets are hit, it will likely take years of ownership to recoup the $5000 purchase premium through pure fuel savings?

Stephens: It’s a package. We are not claiming to be the best from an economical perspective at all; we’re quite up front that it is a mild hybrid. But we are also positioning that it is 100 percent Subaru and we say there are benefits from it being hybrid. The customer will decide what is best for them. It is more economical than a (purely) petrol Subaru. You might find that there is a competitor with hybrid that offers better economy. But against that you have to trade off the benefits of what we offer with all-wheel-drive, all the safety features and other things, and in doing so perhaps you are only going to be saving an extra $100 over six months. We’ve done our research and we are comfortable. We’re not trying to pull the wool over anyone’s eyes in respect to how economical it is. We’ve never said this is the nest of the best; it is the beginning of our journey.

MNZ: Subaru Japan said on Monday it might well produce 150,000 fewer cars this year. What does this potentially mean for NZ?

Dumper: It will impact us. But when we went into (Covid-19) lockdown we knew would have to change our forecasts. We have chosen not to order some cars. The last thing we want is to have too many cars.

MNZ: The Motor Industry Association has suggested the new car market will be down by at least 40 percent this year – what’s your view?

Dumper: I think it could even be 50 percent; the third and fourth quarter of this year will be tough with the Government telling us there will be 10 percent unemployment. And I think next year is going to be really tough. The worst is yet to come.

MNZ: Your 2019 sales were ahead 2.8 percent year-on-year versus 2018 and allowed an all-time record number of Subaru SUV sales. Do you expect to maintain the same market share that was achieved in 2019?

Dumper: If the market halves, we’d like to hold our market share. The market is sure to change and it will get a big messy.

Stephens: We believe there are pockets of people out there who still want a new Subaru. Some might have come through this (coronavirus) and think, well, ‘we’ve got through this let’s buy ourselves the car we’ve always wanted.’ There might be people who might have used public transport and now are thinking they don’t feel so safe doing that before. We know of a dad who handed down his Forester to a child and he went off to the dealership to buy himself a new one. But it is a crystal ball question.

MNZ: Does Subaru have any strengths that might give it a better chance of in NZ than some other brands; is it tough enough to weather this challenging economic condition?

Stephens: Our brand position is in between the Europeans and the mainstream brands; we’ve the one you step into on the way to going to the Europeans like an Audi. Likewise, when times are tough, people might trade in a Euro for a Subaru.

Subarus are seen as a vehicle for someone who wants to be a bit different and we believe we have a high ground based on technology and safety. There is quite a lot of desirably out there in respect to our product, we achieve strong consideration and strong conversion. So, we think that we can weather the storm – perhaps with less sales, but enough to maintain our market share.

Dumper: We run our business very lean and tight and we have done this very successfully for a long time. We outperform glamour brands with our return on sales and have for decades. We have more than doubled our business in the last decade and had to employ just four or five more people.