Subaru Crosstrek still going strong as it enters its 3rd generation

PALM SPRINGS, Calif. — Any of these three things can happen when a vehicle nears the end of its product cycle: It drops on the sales charts, gets discounted, or volume is relegated to fleet channels.

Subaru's Crosstrek, introduced in 2012 and a pioneer among subcompact crossovers, is proving a prized workhorse over the long run. Subaru said it is its fastest-growing nameplate ever, with sales of over 1 million to date.

As the brand launches sales of the third-generation Crosstrek, the outgoing model is dominating segment sales, even posting record February U.S. sales of 14,816 and record March deliveries of 14,040. And since its introduction a decade ago with standard all-wheel drive, expanding Subaru's off-road appeal to a wider audience below the Forester and Outback, it has been the top-selling subcompact crossover 8 of 11 years.

Subaru said it is among its nameplates least impacted by the chip shortages that have dogged many automakers, allowing Crosstrek sales to hit a record 155,142 last year and become the brand's top seller for the first time.

And now with two assembly plants — one each in Japan and the United States — cranking out the latest Crosstrek, Subaru sees nothing but upside with the nameplate and segment. U.S. sales of subcompact crossovers briefly topped 1 million for the first time in 2021 before the chip shortage upended output. And nearly 1 in 10 light-truck sales last year was a baby utility, up from just 0.9 percent in 2012.

As more Americans embrace utility vehicles, and cars vanish, baby utility vehicles have become a key entry point for many automakers. Chevrolet, Kia, Hyundai and Volkswagen, field two separate nameplates in the segment, though priced and equipped widely apart.

The Crosstrek has become a key entry to the Subaru lineup over time, and one reason the brand enjoys one of the highest loyalty rates in the industry.

Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, called the third-generation Crosstrek, with 2.0- and 2.5-liter engines, one of the industry's most important launches of the year, because Subaru will be boosting output of one its most profitable and highest-volume models.

The 2.5-liter Crosstrek will be assembled in Indiana, allowing Subaru to adjust output in anticipation of more demand in the U.S., where buyers prize higher horsepower.

"Subaru sits in an enviable position," said Fiorani. "Shortening the delivery times will also improve the Crosstrek's place in the market."

While planning the third-generation Crosstrek, Subaru turned once again to existing owners, who are more likely to use a roof rack, cycle, hike, camp and drive off-road, than owners of other baby utility vehicles.

"Our customers are not looking to show off," said Garrick Goh, planning manager for the Crosstrek.

Goh wanted engineers and designers to have some fun with the 2024 Crosstrek, from the addition of new colors and a bolder and frameless hexagonal grille to the wheel design, which resembles bicycle sprockets.

And there are plenty of Easter eggs and other functional improvements.

• For the first time on the Crosstrek, Subaru's bigger 11.6-inch Starlink Multimedia Plus system is available. The high-resolution touch screen has wireless Apple CarPlay and wireless Android Auto. It serves as a giant information display with on-screen controls for climate, vehicle functions and audio.
• An electronic parking brake, a first for the Crosstrek, freed up interior space.
• Automatic emergency steering will guide the vehicle around a parked car without changing lanes. Dynamic ventilation monitors occupants and directs the HVAC accordingly.
• Door checks are more regulated; for example, an open door won't fly open further in a strong wind when loading or unloading.
• The rear doors open at 90 degrees to allow greater access to the rear seat and the roof rack.
• The rear camera features a washer and the rear wiper covers more glass.

The competition, aware of the growing role baby utility vehicles play in attracting first-time buyers, is also regrouping. Honda has introduced a second-generation HR-V developed specifically for the U.S. market, and is looking for more volume as the chip shortage eases.

Chevrolet is reloading with a redesigned Trax and updated Trailblazer, available with awd, with a bigger infotainment screen and more standard safety gear for 2024. Toyota Motor Corp., which dominates the compact crossover and large crossover segments with the RAV4 and Highlander, is a newer entrant with the Corolla Cross.

But analysts say Toyota likely isn't seeking high volumes from the Corolla Cross at the expense of the more profitable RAV4.

While the outgoing Crosstrek was available in only 10 states as a hybrid, with just 2 percent of customers opting for it, Goh said it is "probable" Subaru will add a hybrid to the third-generation lineup. And while the Crosstrek's 8.7-inch ground clearance is greater than many SUVs, with a low step-in height for front and rear passengers, Subaru is adding a Wilderness package for 2024 that adds even more ground clearance. The Wilderness package, launched on the Outback and added to the Forester last year, accounts for up to 30 percent of sales of those models in some markets.

"We build these vehicles for our adventure-seeking customers," Goh said of the 2024 Crosstrek and its prospects. "We are still looking for the ceiling."