The Legacy wagon was Subaru New Zealand’s most popular car. It was a bestseller, a huge chunk of its sales and its brand.
So when the company got the call that the flagship wagon was being discontinued worldwide, it marked the biggest potential disaster Subaru New Zealand had faced in nearly two decades.
Despite the fact the wagon was a perennial bestseller here, with Kiwis driving more Subarus per capita than any other market in the world, other countries had moved to adopt more traditional SUV shapes. And New Zealand just wasn’t large enough to sustain demand on its own.
With the wagon accounting for 25 percent of the company’s sales, the team saw its discontinuation was going to leave a “bloody big hole”.
Despite this, Subaru New Zealand was expected to make up the millions of dollars in Legacy wagon sales in order to meet its usual targets set by global headquarters.
But this wasn’t going to be easy, and especially not on its modest marketing budget.
Getting rid of the wagon was going to come as a shock to loyal customers and dealerships alike, and Subaru New Zealand feared hurting the extremely loyal Legacy buyers.
The obvious solution was to try and make up the Legacy loss by increasing sales incrementally across all Subaru’s remaining products.
But the company only had a limited budget, and didn’t want to dilute it over too many models and risk having no impact at all. So it went for a much bolder approach: try and establish the soon-to-arrive new Subaru Outback as its new flagship.
So it poured its marketing resources into the very focused task of giving the new Outback all they had, moving it to the flagship position in the brand and hoping its sales alone could fill the Legacy gap.
First, the team spent weeks preparing for a meeting where they convinced their global partners at Subaru in Japan to release the new model Outback at the same price as the runout Legacy. After all, they couldn’t take away New Zealand’s favourite Subaru model and try and replace it with something more expensive.
Subaru New Zealand then broke the bad news about the Legacy to its national dealer network, but was able to counter that with good news revealing the new Outback and its special price, getting its partners onboard.
The marketing team then identified Kiwis’ love of the land, and ability to explore it in new ways, and connected that to the fact they were the biggest Subaru purchasers per capita in the world. The heart of the campaign became: ‘New Outback. For the world’s greatest Subaru drivers, New Zealanders.’
It used every channel at its disposal to push out the message, spending over 80 percent of its-above-the-line budget on relaunching the Outback as its flagship. It also used digital to tease its audience with previews of the new car, and PR to tell the Outback story, and invested in the rights to a soundtrack by The Who, in order to drive the emotional connection.
Not only did sales of the Outback replace those lost by the Legacy, sales of new Subarus in 2015 shot up by 25 percent, far surpassing the passenger car market growth of five percent
over 2014/15. This made it Subaru New Zealand’s best year ever, in its 35 year history – all thanks
to the Outback.
When previously the most units the Outback had ever sold were 591 in 2006, last year Subaru New Zealand sold a whopping 1175 of the model.
These sales meant the model accounted for more than half of the brand’s total sales in 2015, and the trend has continued into 2016. The company is set to grow sales by another 19 percent for 2016.
This was an industry-beating performance for Subaru. Looking back, Subaru believes the death of the Legacy was an opportunity in disguise. And with a bold, focused approach it was able to turn disaster into triumph.