Subaru goes into top gear

After maintaining a low profile as a niche brand for more than 10 years, Subaru is now planning to go public – well, at least in Thailand. Tanchong International and Motor Image Subaru CEO Glen Tan said during the third quarter of last year that Subaru is heading towards a major transformation in the Asean region.

He said Subaru sales in Thailand are expected to grow by three times to more than 2,000 vehicles in 2013, which will turn the country into a major market for the Japanese brand. Subaru’s sales network in the Asean region will be expanded by ten times, with 60 new showrooms to be built in Malaysia, Thailand and Indonesia – up from the present 76.

In Thailand, the number of Subaru dealers will increase by 10-15 from the present six.

To achieve these goals, Motor Image Subaru – the Subaru distributor in Thailand – has an important challenge ahead. Company manager Apichai Thammasirarak, talked to The Nation about Subaru’s planned comeback in the Thai market.

“Subaru in Thailand is going through major restructuring, starting with the organisation, and especially in designating a new marketing strategy,” he revealed.

Apichai said the plan would cost as much as Bt500 million, with Bt300 million-Bt400 million being for sales network expansion and Bt100 million for marketing.

Subaru hopes the shake-up will help sales reach 500 vehicles this year, up from just 100 last year. With more new models to be introduced in 2013, Subaru sales in Thailand are expected to break the 2,500-vehicle mark.

“Next year will be a turning point for Subaru," he said. “Since we started business in Thailand 10 years ago, sales have never been above 200 vehicles per year. This is because the vehicles are imported as CBU (completely built-up) and suffer from high duty. However, next year production will commence in Malaysia, and being able to import the vehicles using the Asean free trade privileges will help us compete against locally assembled brands.” 

The new Subaru to be introduced is the XV crossover, which is targeted at young families and individuals.

This is a new market segment for Subaru in Thailand as previously its customers comprised mainly car enthusiasts.

“Production of the XV will commence in September this year and we will accept pre-orders so that we can deliver the vehicles in October," Apichai revealed. “The XV will become our major product. After meeting with the Tanchong management in Singapore recently, I can say that we are fully prepared because next year will be a year of great change for Subaru.” 

Apichai said Malaysian production significantly helps make retail prices competitive, while the showroom network expansion will cater to increased customer demand.

Another model that will be addd to the line-up is the BRZ sportscar, which is co-developed with Toyota (GT86). Meanwhile, the all-new Forester and Outback minor change will also be introduced.

“The two new models will help grow the Subaru customer base in Thailand, particularly the XV, which will be priced at the same level as locally assembled SUVs such as the Honda CR-V and Chevrolet Captiva. If the response to this CKD model is positive, we may decide to offer more CKD models in the future,” he added.

Initially 5,000 XVs would be assembled in Malaysia during the first year, and Subaru dearly hopes that it will become a hit in Thailand as the carmaker hopes to win a 10-per-cent market share in the growing recreational vehicle market.

 

Subaru to spend Bt1 billion next year

With sales expected to grow by three times, Subaru will have to invest in expanding its network and marketing activities.

Next year the number of showrooms is expected to rise to 16 (five in Bangkok and 11 upcountry), and 26 in 2015 (with ten in Bangkok).

“Much of the expansion is based on old showroom facilities, so it requires lower investment, approximately Bt20 million per venue. We must also be careful not to overlap new showrooms with the perimeters of existing showrooms, and study how the city expands,” Apichai said.

In Bangkok, new showrooms will be built in Vibhavadee and Bang Na, as well as in Nakhon Sawan. These are owned by Motor Image Subaru. Showrooms in Pattaya, Chiang Mai and two more provinces will also be opened for dealers.

“So by the end of this year Subaru will have 9 or 10 showrooms,” he said.

 

Expanding the warehouse

Apichai said Subaru also needs to expand its inventory due to the growing sales.

“We are investing Bt200 million for a warehouse in Lat Krabang Industral Estate. The parts warehouse is 5,000sqm while the vehicle warehouse is another 15,000sqm,” he said, adding that construction will be completed next year.

Subaru is also busy upgrading facilities and training employees in marketing, sales and after sales.

Furthermore, it is planning to undertake a strong marketing offence and hopes to dramatically raise consumer awareness through full-scale public relations.

“Apart from various media, including our website which is now in Thai, we will be organising a large number of road shows and events by joining hands with our allies in order to reach new customer groups. We will spend about Bt80 million-Bt100 million for marketing this year, and the public will see us more often, for example through newspaper commercials,” he said.