Recently, Riley, a listener to the Autoblog Podcast, wrote in and asked why Subaru doesn't have a luxury brand. Reading the email, neurons began firing immediately, and a whole bunch of new thoughts rushed in at once, mingling with old data in my brain. Indeed, why doesn't Subaru have its own luxury brand?
My initial conclusion was that it just didn't make sense for the brand. It's too small of a company to warrant another brand. The higher-end offerings — namely top-trim Ascents — are probably the ceiling at the moment. If those can sell consistently, then maybe it would be time to toy with luxury-leaning models the way Hyundai did before spinning off Genesis (and perhaps adopt a wait-and-see attitude with regard to that potential competitor.) A luxury brand might dilute the value of Subaru's mainstream offerings, giving it the look of a budget brand, but luxury models within the brand could do the opposite.
... Unless ...
What if Subaru's luxury brand was all electrified?
Subaru is a company that is genuinely concerned with sustainability and environmental issues. Famously, its factories are zero-landfill facilities, and the company takes part in a multitude of environmental initiatives both on its own and with various partners. This mirrors the values of a large part of Subaru's customer base, who have earned a reputation as outdoor adventurers who love nature — and dogs. It's no surprise to see Subaru overrepresented on the roads of Denver, Portland, Ore., and Burlington, Vt.
Subaru doesn't offer any plug-in models yet, but they're in the works. As of now, we can expect them to be based on current nameplates. What if Subaru gave its upcoming Crosstrek PHEV the luxury treatment and a new brand name ("Pleiades" would be the easy grab).
Sure, Subaru retains customers really well already, but what happens when people outgrow Subaru? At least they have the option of the Ascent, but I'm interested to see how many Subaru owners move on to luxury brands (I'm in the process of finding those answers).
BEVs and PHEVs are more expensive than their ICE counterparts. The people who are willing to pay more for a premium brand are willing to pay more for hybrids or plug-in vehicles, especially if they can make it back. The downside is that lower end premiums get sold back early — but that makes for a nice CPO market, which would allow more people to participate in electrification.
And, dude, all of Subaru's EV and hybrid incentives are still on the table!
Screw it, I thought. I want to buy a Jaguar I-Pace competitor based on a Forester called the Pleiades Lannister.
But then, with the help of the other editors at Autoblog, I came to my senses.
Autoblog Editor-in-Chief Greg Migliore said:
"The marketing costs and added products would dilute the brands ... I think Subaru is strong enough on its own, rather than trying to go the Hyundai-Genesis route."
Senior Editor Alex Kierstein added:
"[I] agree with Greg. They're doing fine as it stands (selling as many as they can produce) without taking on the risk or expense of a lux brand. Remember, the SVX was a dismal failure here. Even Toyota did a long test run before launching Lexus (the Cressida). That was a success, so they did Lexus. I don't think any Subaru products have adequate bones, either, to build convincing luxury products off of."
A voice of reason from Consumer Editor Jeremy Korzeniewski:
"The electrification angle is interesting, but likely prohibitively expensive for a brand like Subaru. I don't think Subie needs a dedicated premium brand considering the upward trend they are already experiencing with their bread and butter core models."
... As well as from Associate Editor Joel Stocksdale:
"I think it's a case of, if it ain't broke don't fix it. Subaru would have a lot more to lose than it would to gain by introducing a luxury brand. If they want to move up market, offering a luxury trim of their popular vehicles would be a better way to go, a la Denali. And they're in the sweet spot of the market with a bunch of fuel-efficient car-like crossovers. Simply adjust and adapt that model as the market needs, don't go through the hassle of adding brands."
After that, I was back to where I started, my gut instinct: Subaru doesn't need a luxury brand. Customer retention is so strong already. Subaru will do well to offer the greener options to its core customer base, without the risk of dinging its own image or failing to create a new one. Subaru will be happy to be able to offer those EV incentives to its current, loyal customers — who are hungry for greener options — rather than leaving them swinging in order to attract new, high-dollar luxury buyers.
Stay the course, Subaru. What you're doing is already working. Your fans and owners are looking forward to plugging in, and they'll be glad that it'll be the brand they already know and love.