we're talking about how can we be different? What is it that we can do that nobody else can do? And what we did is we actually asked our owners, when you have a Subaru, what do you think about it? Oh, I love it. Oh, it does this. I love it. I love it. I love it. And that's how the whole idea of the love the audience. They told us that they love their Subaru. They love its reliability. They love its durability. They love the fuel economy. They love the utility. They love everything about it. So that was the whole genesis of the idea of the love campaign.
Tran Thrill to chat with Tom Dole, the former CEO of Subaru of America. After a remarkable two-decade career steering the Japanese automakers growth in the US, we dive into his journey as CEO and how he transformed Subaru from a niche brand until beloved Cole. A big thank you to our sponsors for making today's episode possible, dealer DMV, Open Lane, and car dealership guy news. And now let's get into the show. Tom Dole on the CDG podcast. Tom, welcome. Good to see you. Good to have you here. It's so great to finally meet the real car dealership guy. My man and a loyal follower. So I love it. And this is a new type of episode because I have Alan here as well. Alan Higg is a guest co host. So we're really pumped about this. It's always great being with Alan. I'll tell you. It's going to be a great conversation. Wow, where to start.
I have to tell you a story. We've been talking for 20 minutes already. But I actually interviewed at Subaru of America. You did? When was this? This was in 20, probably a 2013 or something. Really? Yeah. So your word CEO, yeah. I checked your LinkedIn to make sure that I was president though. You were president. Yeah. But you, this is going to sound crazy. But your Subaru is actually the reason I stuck to auto retail. No kidding. I swear. You got to tell me the story. What happened?
So here's the story. So I walk in first. I remember this very vividly because there's such a monumental point in my career. I walked in and you're this like front desk and you make a left. There's all these like, open space and then you make another left. There's a conference room where I guess you do interviews. Right. And it was really compelling opportunity. I was college at the time. And I remember, and this is going to sound crazy. The interviewer, he asked me and he's like, so, or not the end. So what do you currently do? Now, I didn't know any better. I was like, oh, I'm the chief operating officer and it gets a little car lot. And it looks up. He's like, what? But in my head, I was running. I was doing all these things, you know, at the car lot of doing everything. I was, you know, ops buying this sale of fame. If I, how about that? So long story short, he ended up, they ended up offering an opportunity and expect it was an internship or something. But I was just some intro of a position. But I took it. I was like, wait, I was like, I can't do this. I was like, I'm already doing X, Y and Z. And I was like, maybe, you know, going corporate, it's not for me. Maybe I'm going to stick to retail. And if that was, I swear to you, that was the day. I remember walking to my car, calling my dad. I'm like, I think I think I'm going to stick to this auto retail thing.
Well, I hope we didn't, I hope we didn't, we didn't shoot away. Right. By the way, it was a great experience. Yeah. It was just, what was it, a marketing job or what was it? Marketing role. Yeah. Well, we are a lot of interns for marketing for sure. Well, that's, yeah, I mean, it was, so anyways, that's, I had a story I had to tell you, and I was holding it in when we were talking, like, I was holding it in. I was like, I got to tell you, but we'll wait for the podcast. It's my world, isn't it? So you have a part in the success of what we're doing here today. All right. So you should ask for stock, Tom. That's how we should find your seat. So less about me, more about you, 39 years in eight months. Why didn't you stick around for another four months? Could have hit 40 at Subaru. Well, it was time, you know, in a Japanese car company, you know, your contract goes until March 31st. So technically March 31st of 2023, my contract that expired. So there's a good reason. There's a good reason. But the company did, they kept me on for as an advisor position through the end of the year. So that's kind of how that whole thing ended up. But yeah. So you started at Subaru of America in accounting, right? In a very, you know, numbers-driven roles, work to have all the way to CEO for literally almost 40 years. Give us a, just a little bit of your story. What was that like? Right? Take us through your journey. Well, before I came to Subaru, this was, I came to Subaru, I know the exact date, March 15th, 1982. 1982. Got it. 1982. So you can figure out, I've been there a long time. Now for five years before that, I graduated from Villanova, so I'm a local kid. I graduated from Villanova, worked in an accounting firm, Arthur Young, in company for five years. And then that's when I left the company, Subaru, in 1982. And what happened at the time, Subaru was a public company and it was just starting now to become more professionalized. It was growing. It was probably at the time one of the few companies in the Philadelphia area that was really growing well. And so they needed to kind of professionalize their operations. So I came in and my job title was manager of operations, operating procedures. So my job was to essentially document all of the operating procedures that the company had for cash receipts and inventory, accounts payable. And so it got me a great opportunity to see the company from the top level down. So I knew pretty well what the operations of the company were back in the time. And that's kind of how I started and it kind of worked my way up. Various jobs went down to Delaware and we had a Delaware holding company at one time, did some treasury work. Then ultimately went back into the accounting department to become an accounting director. And then one thing kind of led to another. And over time, victim, I guess, if you stay around long enough, right, you get these roles.
What was Subaru perceived 40 years ago? Right? Was it what was the OEM market like, generally speaking, right? Were you an underdog? Was it considered something realistic for some, a new automaker to kind of emerge as a leader? I mean, if you look today where brand loyalties, I want to say at all time lows, if not all time multi-decade lows, right? It's actually a pretty good time to be a new brand in our market, at least how I see it. I don't think it's your perspective because you can actually get into the market, right?
After what we went through, COVID boom, and with supply being so low, people had no choice, but to explore other brands. So what was it like when you started? And Subaru, was it, what was the market like and ability for you to kind of grow as a brand? It was interesting because again, I came in 1982. The company was started in 1968. And I would say during the late 60s and early part of the 70s, the company almost went out of business because we were selling a car called the 360 at the time. And Ralph Nader had rated it unsafe. So the company struggled. And what saved the company was the first Arab oil embargo in 1974, I believe it was. And after that, the fuel efficiency of Japanese cars, obviously, with gas prices being what they were at the time, created this huge demand for not just Subaru, but Toyota Honda. That's when Nissan, that's when the Japanese really got a foothold into the US market in a big way.
And then through the late 70s and the late 70s and through the early part of the 80s, the company was growing like crazy. So when I get there in 1982, the company's selling about 150,000 vehicles a year, but we're subject to what was called the voluntary restraint agreement. There was an agreement between the United States and Japan to limit the amount of cars that we could bring into the United States because we were pure import at that time. But the market opportunity then was unbelievable.
The company, because of how it started, it really wasn't professionally managed. Remember, the company was started by two gentlemen, Harvey Lamb and Malcolm Bricklin. And essentially, what they really wanted to sell was a motor scooter, this rabbit motor scooter that they happened to see when they were visiting Japan. And as a result of that, they really weren't interested in the car business per se. But the Japanese wanted them to sell the Subaru instead of the rabbit motor scooter. And that's kind of how the whole company started. But it was tremendously successful when I got there in the early part of the 80s. And it really stayed that way up until about 1986 or 1987. And then we went into a little bit of a slide, which we can talk about.
You know, anyone who thinks of Subaru, they think I've tweeted about this or tongue in cheek. But you think of how have you been able to achieve such crazy market penetration in Pacific Northwest, in New England? Like Subaru knows it's costumer very, very well. And you're, you know, like I said, the market penetration is so deep within specific segments of audiences. Was that something that was deliberately done by the company? And if so, like, how was that done? How have you been able to achieve such success within specific markets?
Really good question. Originally, when I got to the company in 1982, we were a niche brand. So essentially, we were the strong markets for us were the Northeast, like, you know, Washington, DC on North Pacific Northwest, bigger, Southern, you know, San Francisco, up to Seattle, and of course, the Rocky Mountain States, everywhere else. Probably never heard of Subaru. We had, yes, we had retailers in various parts of the country, but they really weren't selling any type of volume. We really knew by the time we get to the late 80s and early part of the 1990s, we know we have to grow, right? We, you can't be at 150,000 vehicles here, your market share, even at the time, I think the car market was 11 or 14 million vehicles in that sales range. We were too small.
So we had to be able to grow. We had to be able to entice retailer operators to be able to take our brand on. And the only way they can do that is if they're selling some meaningful volume. When you're only selling 180,000 vehicles, 150,000 vehicles, our sales were what three, based on a number of retails, we had 300 to 330 per store. You can't generate the earnings or cash flow that's necessary to be able to support a franchise in a way that we needed it to be supported. So it was intentional. You know, from the early part of the 2000s forward for us to first get to 250,000 vehicles, then from 250,000 grow to 350,000 to 500 to 600 to 700. Now, I think we would have done a lot better than the 700,000. We peaked in 2019, but that was because of COVID.
My personal goal was to get to a 5% market share or somewhere between 800, 850,000 vehicles before I retired. But now leaving that to the next generation of management, they're going to take over that responsibility. But the fact of the matter is the franchise is in good shape right now. And to your point, people know what's very good. Very good. People know what Subaru stands for from the marketing through the experience that our customers get when they visit a Subaru retailer. It's all there for them. So we really, we really have our retailers and all of us really at the company that worked so hard to put us into this position.
I want to dig one level deeper into the marketing here because I love marketing and, you know, it's really interesting. So what it was a deliberate decision, I understand that now. And it's clearly a successful decision, right? But what was, can you give us a little bit more behind the scenes of the marketing strategy? I just think it's so tough to break into the automotive market. It's such a saturated market. There's so many players. And again, you go to my father was in Vermont like a month ago. And you know, he's car guy. He's going to look at cars. And he's like, he's like, you don't understand. He's like, every car is a Subaru. He's never been there. And I haven't been here either. But I was like, it's incredible. So it just got me thinking like how, was it just a marketing messaging? Was it not? Was it, you know, coupled with the features in the vehicle? Was it a simplicity of the vehicle? Like, what was it that allowed you to achieve such intense, you know, such a win within your, you know, specific regions of the country?
The car has always been very well received in the colder climates, if you will, because of its all wheel drive capabilities, right? So that was never really an issue. Really what the issue was for us was really name recognition. We had to get our name out there to make people want to consider and purchase a Subaru vehicle. And so what do we, what do we do? I come along in 2006 where I get this job is the CEO or COO at the time, executive vice president COO over the company. And we're sitting around with the marketing gentleman, gentleman by the name of Tim Mahoney at the time. And we're talking about how can we be different? What is it that we can do that nobody else can do? And what we did is we actually asked our owners, what do you think, when you have a Subaru, what do you think about it? And oh, I love it. Oh, it does this. I love it. I love it. I love it. And that's how the whole idea of the love the audience they told us that they love their Subaru. They love this reliability. They love the storyability. They love the fuel economy. They love the utility. They love everything about it. So that, so that was the whole genesis of the idea of the love campaign.
Now, to be very honest with you, it's very difficult to own an emotion. I remember when we first came out with this idea of love, it's what makes Subaru a Subaru. People doubted it. I had people would come up to us at the New York Auto Show or the Detroit Auto Show at the time. And they would say, you guys are crazy. There's no way you can bring an emotion like that. But we had nothing to lose. Remember, in 2005, 2006, we're on hard times. We're trying to figure out how we can grow this thing. Because otherwise, there might not be a franchise. So we're trying to figure out what can we do to be different. And so we tried the love thing. We figured if it did work, we would go back and what was the love thing? Because I Google Subaru love and there's a lot of different things that came up. Well, we always had the moniker is what makes Subaru Subaru. So it could be all-wheel drive, make Subaru Subaru. And what we just do, put love in front of it, love us, what makes Subaru Subaru.
And then we had a genius idea in 2008 that if we're going to do this love, we're going to advertise love. We want the whole brand to be considered love. Right? So that's when we came up with the idea of share the love, where we took five national charities at the time. And we decided at the end of the year, when everybody's advertising low-mostly payments or how much they can get, how cheap they can get the car for with incentives and so forth, we said to ourselves, what if we took $250,000 out of our incentive budget and put it towards this love campaign and we're going to donate the money, let the customers decide when they come into purchase a car, how they want to divide that money up. They could put all 250 to one particular charity, they could put it to five different charities by splitting it. They could decide. And what was the result of that? Results were fantastic. And that's what was the genesis for it. And then ultimately over time, we started to add what we call the love promise activations where now there's every other month, there's something going on at Subaru. So we have Subaru loves the care in February. Subaru loves the environment in April. Subaru loves the help in in like June. Subaru loves to learn in August, the month where now, then Subaru loves pets. And then at the end of the year, of course, we have Subaru share the love.
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So I want to ask you a fun question about this. Yeah. Do you consider Subaru a marketing company or a manufacturing company or neither? Or retailing? I mean, what do you consider Subaru? Because it's like, this is so slick from a marketing perspective, you kind of paved your own path. Well, we have to build right. I mean, we have to, we have to understand, here's the product that we have. And this is what we did is we have to sell. But now how can we make this such, and we can make it appealing to our customers rather, not just not just to our customers, but we need to grow the pie. You know, we went from literally 1% market share to over 4% market share. Right. I mean, and this is an industry where people fight for a 10th of a share of market share every year. And we're picking up tons of market share every year from, particularly once you got past the earthquake in tsunami year in 2011. I think during that period of time, we were probably growing like 15 17% compound annual growth rate all the way up through 2019. So it's a combination of both. But you need the product in order to be able to support the marketing positioning.
I'm going to propose another element to your success. Okay. So about a year and a half ago, you and I were at NADA. Yep. And I invited you to join me on stage at the Auto Team America Conference. And we talked about Subaru, your success, some of the same topics about marketing, engineering, et cetera. And I joked a little bit. I mean, the Subaru to me is it's not going to win many designs for beauty. It's not going to be in a hall of fame next to Ferrari. So there was another element of your success, which I really feel was evident in that after you spoke for an hour, hour and a half or so, when you got up to leave the stage, do you remember what happened? I do remember that it was, I'll be honest with you, Alan, it was really emotional when that happened. Because as I as I as Alan is ending the the Q&A and I'm standing up, I received a standing ovation from the people in the crowd. Well, 300 400, though 300 retailers, probably another 100 people like me in the audience, over 400 people standing and applauding what Tom and Subaru had accomplished. These are retailers. Now, I only know of one other person on auto retail. I've seen get a standing applause and that's Jack Hollis from Toyota.
我将提出另一个关于你成功的因素。好的。大约一年半前,你和我在NADA。在Auto Team America会议上,我邀请你和我一起上台。我们谈论了斯巴鲁、你的成功以及一些关于市场营销、工程等相同的话题。我开了点玩笑,对我来说,斯巴鲁的设计不太可能赢得美学奖项,不会在法拉利的名人堂旁边。然而,还有一个因素,我确实在你演讲一个小时乃至一个半小时后,当你准备离开舞台时显而易见。你还记得当时发生了什么吗?
我记得,那一刻对我来说真的很感动,因为当艾伦结束了问答环节,我站起来时,观众席响起了热烈的掌声。大约有300到400名零售商,还有大约100个像我一样的观众,总共超过400人起立为汤姆和斯巴鲁所取得的成就鼓掌。这些可是零售商啊。我只知道另一个在汽车零售行业中获得过这种掌声的人,那就是丰田的杰克・霍利斯。
Because I think both of you will share something in common, which is a partnership. Well, I should let you describe it. How do you view your retailers? Right. Well, that's a great question now because I review them. I view them as retailers, not dealers. What's the difference? Oh, it's a big difference. You know, to me, a retailer is somebody who's actually retailing and showing the product in a professional manner. Somebody who's deal, let's go make a deal. Okay, it's to me, the sellers price then. Yeah, it becomes all about the price and how cheap you can get it for. Retailing, you're taking something and you're making it, and it is, you're making it beautiful. You're adding value to the product. You're adding value to the process. And that's actually a really good point because we focused a lot, not just on our jobs. I mean, when you think about this business, it really does get back to the customer, right?
Everything that we do at the manufacturer level, the marketing level, and the retail level is all about the customer. So, when you work back from the customer, okay, if the customer is the most important thing, which they are, okay, we need the retailers to make sure that they understand that customer is the most important thing. How are they going to build their organization to support that? How are we at Super America going to build our organization to support the retailers? Because believe me, when I tell you, and one time I said this to our Japanese executives, when I was in Japan one time, I think it was 2014, the year that we went over 500,000 vehicles for the first time, and we're in Japan and we're doing all this compying and so forth. And it finally struck me, you know, because the Japanese executive, Mr. Yoshinaga at the time was saying, we sold 500,000 cars in the US market, unbelievable accomplishment.
We sold 500,000. It's a new Yoshinaga son. We didn't sell anything. What do you mean we didn't sell anything? No, the retailers sold those cars. We didn't sell them. They did. So, it really was through their effort. And when you look at the business from that perspective and you work it backwards, now you have to be in partnership. The retailers have to know what our strategy to go to the markets all about. They have to embrace it. And not only that, it makes them feel good, because they want to commend, they want to make the customers happy. They want to do right by their local communities. They want to contribute.
I think another part of the success too, along with the branding and the product, was the business model that you helped to establish for your retailers. And I remember the first time that I was involved in selling a Subaru dealership, I was excited to get the financials. Looking to the average gross profits per vehicle, not that impressive. It was pretty low, I think, at the time with $1,300. But the bottom line was pretty solid. It was more than the Audi store next door, more than the Volkswagen store, a little bit less than the Mercedes store. This is a group of stores outside of Baltimore. And I was digging into, well, how do they make the bottom line like that if they don't have much front and gross?
And it was from all the little areas. Because you don't have a big supply sitting on the lot, floor plan expense is low. Because the marketing is doing a good job bringing those customers to you, advertising expenses are low. Because the throughput per salespeople was pretty high, because they didn't have to sell the customer, they were able to really show the benefits and features, and then the value with the price. They could sell more units per salesperson than other stores. That was less turnover. So there was less training and expense. And there was a kind of a virtuous super interesting virtuous circle created within the dealership, partly because of there wasn't an oversupply, there was no push going. I should really show up and let you tell. Well, you're doing a great job. It seems like it's like a leader cost structure, because he said something earlier where people were putting dollars towards charity instead of incentives, which to me signals a consumer that maybe has more disposable income is like a little less price sensitive.
That's exactly right. But it doesn't mean they're not a savvy consumer. They're just very deliberate about how they want to allocate their money. Yeah, exactly. In fact, the Subaru customer can afford to buy anything. But that was all purposely done that way. Because we knew based on where we were positioned in the market at that time, we weren't able to go to the market above certain price points. So that meant the retailer margin was what it was going to be. But by keeping the inventory turns high, by helping them and assisting them with advertising and marketing support, which is what we did.
These are the types of things where they could pick up a little bit of extra gross profit here or there, making them more efficient. We were one of the first, I think I'm very proud of it. I think of all the manufacturers that really embraced fleets and lead management and understanding as these leads were coming in. These are real people that are interested to buy a car. We got to get them in here. That was another aspect that allowed traffic to blossom and allowed us to expand our operations. But yeah, it was all great stuff. It still is. How did you develop this perspective about wanting the retailers to win? That it wasn't you trying to take margin away from them? Are you trying to go around them? You were really viewing ultimately the retailer was your customer. How did you come up with that? Because that's not common in our industry.
Well, here's how I came up with it. Back around 2003, 2004, we came out with, I remember correctly, a signature facility program that we wanted the retailers. We wanted to upgrade the look of our stores. And we thought we were deserving of it. But of course, at the time, we're only selling about 180,000 vehicles a year. Average retailers. For that perspective, yeah. Average retailers only we had about a little over 600 retailers at the time. So that means the average retailer is only selling 330, 350 cars a year. Not enough. Clearly not enough. Put that perspective for the audience listening. So for the audience listening, what that means, if the average retailer is selling, say, 350 cars, your top retailers are probably selling 700 to 750.
But the average is bought up by the people that are selling more. The median retailer, so exactly half of the retailer network, was probably selling 275 to 150. There's not enough money. When you say 275, you're referring to new and used per month. New. No. New only. Oh, okay. So there's not enough earnings and cash flow for them to build this facility that we're asking to do. And there's not enough for them to attract and retain top talent. Yeah, our franchise was a feeder for the store, the hottest store that they might have. You can't have the best locations down the street in a smaller, so par location. So what we tried to do then was to figure out, okay, how can we work with the retailers to get more marketing and advertising back dollars back to them so that we could first increase the volume? And at the time, we had a co-op program like everybody did. But the co-op program was basically designed around the top retailers. Not everybody was getting their fair share. Or at least I thought anyway, some people might have a different perspective, but I didn't think the retailers were getting their fair share.
So we came up with what we call the unique advertising marketing system that we call the super ad fund to help the retailers with their marketing advertising to draw people in. And what was interesting as we were turning it around in 2007, 2008, 2009, that was the financial crisis years. But because we had implemented the marketing and advertising, which made it more egalitarian based on what the retailers were purchasing from us, the whole sale sales that we were selling to the retailers, right? They were getting advertising and marketing dollars in that they wouldn't have gotten otherwise that they could put into the market. So that's why during the financial crisis years, we were just growing right through it. And people would come up to us and say, well, how are you guys doing this? Well, that's kind of how it started. But we needed to make sure that the retailers were making an adequate enough return on investment. It all gets down to- So say that again. Say that again. A return on investment. That was an important part of your strategy. Yeah. That the retailers had to have an adequate return on investment or else they would invest in the franchise. Exactly. It would move to that location. They wouldn't hire the best talent. Exactly. And now we need it. We need that, continue to need that, because we're going to want our retailers to do the next generation signature facility. We're going to want them to invest in talent and systems and so forth that are going to be necessary to take our franchise, because we want to be successful in the future with this transition, either or whatever it turns out to be in the future. We want to be successful. So we need our retailers invested in it. And you can't get the retailer interest if you're just a collector brand, which is kind of what we were.
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Alan's going to have to ask you, baby. I have a mind. Alan's going to have to ask those other brands that he's in the back of the book. If you look at the brands that have great relationships with the retailers and you can look at the JD Power and NAD8 Attitude Survey, for example, Subaru Toyota and Lexus Honda at the top. There's a reason for that. Actually, one retail actually said this to me one time. We were arguing over something. I don't remember what it was. He said, listen, we know as a retail organization, we can't do everything that you ask us to do. We also know you can't do everything that we ask you to do. But by having this give and take, you can kind of create that. You're from Philadelphia. There's a guy named Sunny Hill who has a radio show around here, Alan, called The Living Room.
So I adopted The Living Room. We want to make a living room conversation, just like we're out in here today with our retailers. When our retailer advisory board came in or we went out to regional meetings and met with them, we said, this is The Living Room. Tell us what's on your mind. What can we do? And then we would take notes and we would decide, hey, we can do this. Let's go back and do it and try to meet the retailers where they were. Again, we want their attitude to be correct because, remember, as I said earlier, what's the goal of our business? Fundamentally, it's to get a loyal customer. We want customer loyalty. We want customer retention.
If we can keep our customer retention loyalty high, then we don't have to worry about requesting as much. The customers will see the value that we're providing and the retails are providing. That's why it's great when you go into a super retailer and somebody, the salesperson has been there for 15, 20 years. That customer has now been through three or four car buying cycles with that customer. And they know that customer. There's a relationship there. And this business really is all about the relationship. And so that's really the key.
Fundamentally, it's about creating a loyal customer. We can create the loyal customer, but we can't do it ourselves. We have to have the retailer. You're creating a loyal customer because you show the retailer that you care about their success. They're loyal to us. Yes. They're willing to write that check, to spend their time, to spend time in the community, to invest now for a better future because they have confidence that your way is a good way. Yeah. So it's not always about dollars and cents. Once you get to be a certain amount, we have an obligation to help our local communities to become better places.
That's why we try to say to our retailers, it's more than about selling a car. Anybody can sell a car. There's 32 brands out there, maybe more manufacturers that are out there that want to sell somebody a car. But not every one of them wants a relationship with the customer. And that's where we come in. We want that relationship with that customer. And that's why we always say, you're more than a typical car dealer. You're a super retailer. I want to just concept of more is very important. Yeah. I want to dig in one level deeper into the customer.
Because we've been talking a lot about the retailer and what it's like being a super retailer. Talk to me about, you were at Super Rope-Til very recently. And so you've seen this evolution of consumer preferences. I have this funny post that I posted on Twitter a couple months ago. And it went viral, which was all people want nowadays are four wheels and apple car play, which is meant to be a joke about the fact that consumer preferences are changing. And people are very specific about what they're looking for. When I purchased my last car, my wife said, does it have apple car play?
It's crazy that that was the first consideration that came up. It wasn't, is there enough room in the car or there enough seats? Does it have apple car play? I've seen that with many customers as well. But it's really meant to just be a, it's really just a proxy for, can I use my phone in a frictionless way in my vehicle? So from your perspective, what are like three ways or if you can give us a couple of ways, how are consumer preferences changing or behavior? What are people looking for, especially given the fact that, as Alan mentioned, you weren't selling the flashiest car out there. It was very practical. But what are some key ways that you're seeing consumer behavior changing that you think it's really top of mind should be for retailers and market?
Well, I think what's happening, I think customers assume, for example, that our cars have all of those types of features and benefits that other manufacturers have. We have apple car play, Android Auto, and then they expect to be able to use their phone for navigation, or they could use our navigation if they want through the navigation that we might provide. But also, I think what's happening is because of the telematics units that's in these vehicles now, remember, we're getting a lot of information about how that car is running and how that information is being, how that customer is using that particular vehicle so we can become more of service to that customer. We might know that the check engine light came on before the customer notices it. And so that gives us the opportunity to be proactive to that customer.
How so? Like what would you do? Well, because we would then send that information back to the retailer. The retailer then gets in contact with the customer. Hey, listen, we just noticed that your check engine light came on. Maybe there's something that we need to take a look at. Let's schedule your car for this Friday at 10 o'clock. And that way, oh, wow, the customer is kind of wowed by that. But these are the kinds of things that you can do once the customer is trusting of you.
They know that you as a retailer and as a manufacturer have their best interest at heart. It's not that we're trying to get them into to try to sell them all of these other types of services that aren't necessary. No, it's because we see something in how you're driving this vehicle where we can help you. And we can keep the car safe and keep it reliable and durable and keep your investment. And the most important things that are important to your family safe in the car.
So Tom, you presided over this incredible rise, 200,000 units to 700,000 was at the right where the industry really didn't go up much at all. We were in 16, 17 million units when you started in 16, 17 million when you ended, right? So that was you taking share from some pretty ferocious competitors. That's right.
Who would you take share from? We took it. Basically, we took it from everybody. Was there like a standout? No, I mean, obviously, obviously, probably more some of the job. We took a lot of share from the domestic sedan business. We did. And you prevented them from gaining much share and the crossover segment, I would say, for a long time. It was with the cross track and the forest or any outback that we bought out. Yeah. So that segment grew more than any other segment. We were positioned well to capture a sweet spot. That's right.
You had four or three or four vehicles that were in that business. But so incredible rise. And the retailers weren't really selling that many units more, but it was shifting from their Chevy store to their Subaru store. And they noticed that, right? They could see the customers coming to Subaru. They could see the salespeople going from Chevy Subaru. They could see the techs from Chevy Subaru, right? They could see this, you know, every month it happened a little bit. But what message do you have for the retailers in the next 10 or 20 years?
What opportunities are you excited about? Or what threats are you worried about? And then what could a retailer do to thrive in the next 10 years? Well, the key, as I said earlier, the key for the retailers to continue to thrive in the next, well, really, for the foreseeable future, whatever that holds. And I can't predict the future. I'm not, I'm not Nostradamus. So I don't know. But what I will say is it really is all about the customer and the customer experience. And we have to look at it from their perspective. And for those brands that do that, well, we'll continue to thrive in the grow.
Now there's tools that are coming down the road that can help. I mentioned telematics. There's there's AI, where they call it, AGI. Oh, I guess the other day that you you had about AI. Yeah, how do you think about AI as a as a manufacturer? Like I get as a retailer, as one thing, but as a manufacturer, how do you think about AI? I think it can help us understanding people's driving habits.
It can help us with helping them to determine when best when it's best for them to get service on their vehicle. It's interesting as it relates to the new car side of it, or even the use car side, because there's so many variables that I don't know that AI can factor in all of those, until that particular customer, you're going to buy this car with these specifications. I don't think that's going to happen. So there's always going to be a need for something. I partially disagree. That's okay. We can we if it lets if you disagree, let's discuss that.
That's what makes the world around. But the fact is, I think that if you boil it all down, we got it. We got to make sure that the customer has a good, memorable experience in a positive way. So no matter what changes happen, and you can't predict what they're going to be, the reaction should always be what's best for the customer. That is correct. To be close to the customer, understand what they want or need and fulfill that need. That's right. Not maybe sometimes we have some technology, EVs, etc. They're getting ahead of us, or subscription model and things that the customers haven't asked for.
Yeah. And the market will decide all this stuff. The market is speaking now, as it relates to electric vehicles. It looks like it's going to be on a little bit longer timetable than what maybe some of the governmental experts would like to do. Probably good for super. Very good. Yeah. I think a couple of things. So I think affordability, which is a big issue in our industry, I would have to imagine it's not the biggest issue for a super customer. It isn't. It isn't. I mean, we have to impact everyone. It impacts everybody. What I get concerned about.
But you're not selling. Well, go ahead. If it were me, if I'm not in the industry, and we're like, I can say, my concern is that instead of the industry being 16.5 million vehicles a year, because of where the price points have elevated to. And the fact that this inflation is real out there. I mean, we all talk to customers and people that are trying to just get by with what it costs them for their mortgage and interest rates and gasoline prices and food and groceries and things and insurance. Right.
Tumterium. Have we permanently made the industry 15.5, 15.6, 15.7? What is it this year? On 15.7, I think it's the highest. Yeah. So last year was 15.5. So it's smart. But everybody's trying to produce cars at 17 million or 18 million vehicles. The plants are there for that. So the inventory is going to grow. Inventory got to create pressure. Now the manufacturers can't get the earnings and cash flow they need. What do you think leasing is going to be the solution here? I'm sorry. I think leasing. It can be. Will be the solution to increase new car sales.
It could be. Now, remember, some of those manufacturers don't have good digital or resale values. We're going to have to invent those lease payments. So it's going to be costly for them. So they're incentive costs are going to go up. But for a brand like Subaru, yeah, I think that's a viable option for us if they decide to do that. One interesting question about future sales is that the U.S. population has gone from 250 million to 320 million. And about the last 12 or 15 years. But auto sales have been the same. So how can that be? Are people poor? No. Cars are lasting longer. Right. They're better built. They used to wear out 70,000 miles back in the 70s, I think.
Right. That's right. Toyota that would go over 100,000. That's right. But now as we move into the EV question is, will those vehicles become a little bit more just about Apple CarPlay? Will they roll 120, 150, 200,000 miles? Or will they not even bother replace the battery? Because the car itself is not worth the cost of the battery. So could we enter into an era where maybe all those minerals are recycled, but sales increase because cars are not being kept as all? I don't know if that's something. I mean, I would hope that would be the benefit of retailers and maybe manufacturers. But it is interesting to see that car sales have been.
They really haven't moved for 15 years. Was it now the average age of a vehicle on the road today is 12.40 years or something? I think even more than that now. It's a power net. Yeah. It's definitely an all-time record. But before, down this point, I remember it was like seven years, eight years. And this isn't that long ago either. This is maybe 10 years ago. I think it's a function of several things. I mean, it's definitely vehicle quality has improved. It's cheaper to fix parts and all that. But also, if you just look at the last couple of years, specifically, many people don't even want to replace their cars because it's more expensive to go out and replace it.
I see this within my own friends or immediate family people, real anecdotes, obviously Twitter and anecdote machine. I get people sending me stuff all day, but it's a real consideration. It's like, hey, I have this car, I'm in the money or I have equity, but if I go replacing it on my payments, it's going to be $150 higher per month. Do I really want to do that? It's a real issue in the industry. Both here and sure. I also go up a lot. Right. Yeah. It's kind of interesting because with Subaru, when I was there anyway, we paid tremendous attention, believe me, on a test, to our used car and our residual values. Yes. We watched it every month. Another part of the virtuous circle. Exactly. Because that lowers the cost of ownership. Yes. Makes customers happier. It takes it better for the lender. Right.
Then the Oasis point. If now that customer's going to go trade the car, wow, I bought this car. I'm just making up $30,000. But oh, I'm getting 18 for it. If they've owned a car for five or six years, wow, my loan's only going to be this. I can get my payment. I think most people expect their payments to go up between corporate, somewhat, maybe 20, 25 dollars a month. It was just because the price of cars are going to go up at least $250 a year at a minimum. I think they expect some increase in payment. But when you can keep their payment relatively consistent, that's going to fit into their budget, well, now you provided them a service. Why would they leave you?
So Tom, it was an incredible ride at Subaru. I remember I heard a story that when you opened up your new offices a few years ago that there was a really magnificent break room lunch room, cafeteria with all kinds of terrific food. You used to like to go down and sit and see your team, etc. But I was told that because you were so popular at the company that when you sat, you weren't able to eat because people kept on coming up and talking to you. So instead, when you need a nutrition, you stay in your office and you ate a lot of tuna sandwiches. Is that true? How did you know that? This is my job to gain information. There's somebody on the inside. That's true. And the reason I did that was because, well, first off, as you move up within your organization, there's so much demands on your time. And you just need to have like half an hour or so to yourself just to kind of debrief. But also actually freed me up a bit too, because then I could walk around a little bit more and speak with people. And that's what I really enjoyed that part of it. I mean, it is really all about the people. The people make it. And that's what I miss the most about it, right? It's the people.
And I think there was this very special person who wasn't inside the company, but was hoping to get more of your time. And that's your wife. And I know that you are no longer having to hide from your team and grab a tuna sandwich quickly upstairs in the office. Tell me how you're spending your time. Yes. It's interesting. My days are full. It's really interesting. Like I always thought, yeah, yeah. I thought, jeez, when I retire, what am I going to do all day? All I did was work. I would get up at 5, 5, 15, 5, 30 every morning, take a quick shower, get something real quick to eat. I'd typically be on the road by 6 o'clock, 6'10 at my office by 6'45, something like that. And then wouldn't come home until after 7 o'clock at night, most of the time. And so my wife got used to me not being there. And actually, she was pushing me really to be up truth, it's told from around 2020, hey, it's time to kind of slow down a little bit. So, is there anything you didn't get accomplished? I know you wanted to get to the 800,000 or so, but anything else?
That was just a good kind, right? Once we got to 500,000 sales. Looking up who interviewed me at Subaru, by the way, pulling up emails from 2013 right now. Okay. Put it on your phone. You have that score. I set the target out there. I wanted to get to 5% market share or somewhere at 16.5 million vehicles or 17 million vehicles that would equate to somewhere between 800, 850,000 vehicle sales. That was my ultimate goal, which we didn't get to. But I'll leave that for the next. They have to be able to accomplish something on their own. They will. They're going to do a great job.
How about any last suggestions for retailers out there that are maybe not owners of stores, but they're working in a dealership or, excuse me, a retailer. And they want to achieve that ultimate objective, perhaps, of owning their own retail location. What advice would you have for him or her? Obviously, learn the business. Don't take any shortcuts. I think in the past at Subaru, we looked to try to take the shortcut approach, but it doesn't work. You're building something for the long term. It has to be sustainable. It has to be able to stand a test of time. It has to have values and traditions. You're not going to be able to do that if you're cutting corners.
So, understand that it's a marathon. It's not a sprint. There's going to be some years where you're going to question that. But overall, you're going to be much more consistent. You're going to be much, much happier. You're going to build your brand actually faster that way, I believe. Look what happened to Subaru. We read nothing. Come back to 2006, 2007. This was a little brand. I'm telling you. And now look at it. So, once you get it moving and people start buying in, it just takes off on its own.
Well, Tom, this has been awesome. Alan, amazing thing for the intro. This was really great. And we're going to have to keep chatting and get your thoughts on where this industry is heading, which is definitely going to be a lot of change. So, I appreciate you coming on. For you two guys, anytime. Come on, man. Appreciate it. Appreciate it, Tom. Thanks, Tom. Thanks, Tom. Thanks, Tom. Awesome. Thanks, Yoshi.
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