Subaru Incentives? Maybe You'll Soon Get A Deal On An Outback Or Forester

Although Subaru is selling more new vehicles than ever before, particularly in North America, the automaker’s run of record profits came to end in the fiscal year ending March 31, 2017. Subaru made money, no doubt, but Subaru’s operating profit was down 27 percent compared with the prior year.

Subaru’s revenue grew 3 percent while global volume rose 11 percent to more than 1 million vehicles, according to Automotive News. That’s the kind of information that matters to investors.

As for consumers, it’s the information from Subaru CEO Yasuyuki Yoshinaga that matters most. Saying the U.S. market has peaked, Yasuyuki Yoshinaga claims, “The market environment has increasingly become tougher.” In a tougher market, Subaru’s largest market, an automaker must either give way or make way.

Subaru’s decision? “We will carefully examine the situation and will take the necessary steps to maintain our sales, including incentives,” Yoshinaga says.

You heard right. Subaru, notorious for limited supply and limited scope for deal-making, might just offer you a bit of a discount on your next Outback or Forester.

Maybe.

In fact, Subaru incentives in the U.S. are already on the rise, though they remain at an industry low. In the fiscal year just ended, Subaru was discounting vehicles in the U.S. by an average of $1,450, up from $900 in 2015/2016.

According to ALG, Subaru spent just $864 per vehicle in incentives in April 2017, up a whopping 45 percent compared with April 2016. But that’s 78 percent less than Nissan was spending last month, 82 percent less than GM spent per vehicle, and less than half of what even stingy Honda spent to get new vehicles out the door.

In other words, there’s room for Subaru to spend much, much more. Doing so will obviously eat into profits especially as Subaru continues to make the kinds of investment that limited profit over the last year: increased R&D and major production expansions.

But a greater willingness to lure buyers with marketable discounts will allow Subaru to continue to gain market share in its most important market while entering a new segment with the Ascent.

For the time being, everything about Subaru’s U.S. sales picture appears rather rosy. Sales more than doubled between 2011 and the brand’s record-setting 2016, and Subaru is on track in 2017 to sell more than 660,000 vehicles.

Thanks to the launch of a new Impreza, Subaru’s growth includes a passenger car sales uptick of 9 percent, year-over-year, to go along with a 7-percent rise in utility vehicle volume. The brand’s overall growth — sales are up 8 percent in the U.S. this year — comes as the industry slowly loses momentum. Subaru’s car improvements, meanwhile, occur despite a 12-percent reduction in overall industry car sales in 2017’s first four months.

Sales momentum means Subaru can afford to provide discounts if need be, which means you can more easily afford a Subaru if need be.

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @timcaincars.