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You're forgetting something there, it is primarily "mums and dads" that sit with the money.
Perhaps, but it's always been the goal of a mid-range car company to get into the youth market. "Youth" meaning not 16-20, but 20-25; those buying their first new car with their own money. VW does it perfectly, for example.
Freddiehttp://www1.vg.no/uploaded/image/bilderigg/2007/08/10/1186730995867_507.jpg
http://www1.vg.no/uploaded/image/bilderigg/2007/08/10/1186730676800_705.jpg
Now, imagine that on the road. Not so bad anymore, is it?
It is bad. No amount of WRC kit can overcome bad proportions. It's still a 5-door hatchback. Hatchbacks really only work in 3-door versions. Five-doors look like stunted wagons. And then there's the drunken detail lines around the front & rear lights.... There's nothing wrong with being generic (e.g., Subaru circa 1995), but just don't be lazy when you do it.
I've said my piece many times about the design, but there's also much to be said about the mechanics this time around. For example, the change to 2.5L engines across the board (2006) created a much lazier, effortless drive. It used to be a bit of work to keep the 2.0L turbo on boil, and while it was a challenge, it also was part of the character that made the Impreza a bit unique. No lag, no challenge; no challenge, less character.
The front:rear drive distribution was also changed (also 2006) to mimic the weight balance. What one has to do with the other is beyond me (and seems quite irrelevant), but the result was the far less tail-happy nature of the Impreza. No spin, no challenge; no challenge, less character.
The wheelbase has been extended by a few inches (2008) to give not only more legroom & cabin space, but to soften the ride, to make the car seem more comfortable & "mature". How exactly is a sports car supposed to be more sporty if the ride is more cushy? The ride, while it used to be a bit harsh, certainly let you know what was going on under the wheels. No info from the road, no challenge; no challenge, less character.
The detrimental aesthetic changes combined with this incremental softening of the character of the drive results in a car that is far removed from what it was just 3 years ago. It doesn't even make marketing sense. Subaru has no reputation for being just another generic car company. How can it expect to increase sales against long-time everyday-transport companies like Honda and Toyota? What is going to happen with Subaru is what happened with Saab: the existing user base was given the same old car on one hand while being alienated with new models that were non-Saab's on the other hand. Result? Year after year of plummeting sales.
Both Subaru and Saab need to do what they do best, and that's be themselves. Subaru was really getting into that groove up until 2006. The cars were getting better (both visually, mechanically, and in terms of reliability). Then they threw themselves a bit of curveball with Zapatinas, followed by shotgunning both feet just this year. Saab seems to have some idea of what to do, and judging by this thread, if going back to their best cars, they may be on the right track.
Whoever greenlighted the 2008 Impreza needs to be re-introduced to the shopfloor broom.
By the way, the Impreza had two peaks: one in terms of drive, the other in terms of looks.