Subaru stands by Impreza... for now: Why the Toyota Corolla, Mazda3, Hyundai i30 rival could make electric switch as small car sales decline

Subaru Australia will launch the new-generation Impreza before the end of 2023, but the long-term future of the Japanese small car remains unclear.

Subaru Australia managing director Blair Read told CarsGuide that despite committing to this latest model, which was first revealed in November 2022, the company is continuing to monitor the small car market as sales decline across the segment.

The small car market under $40,000 has declined to just six models, with the Hyundai i30, Kia Cerato, Mazda3, Skoda Scala and Toyota Corolla challenging the Impreza after Ford withdrew its Focus and Toyota canned the Prius in Australia. Sales for the segment are down more than 30 per cent year-to-date in the first five months of 2023.

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"It's a changing segment," Read said.

Asked if that meant Subaru could ultimately drop the Impreza - which would be a repeat of the fate of the once-popular Liberty large sedan - Read didn't rule it out.

"If it's not meeting the market demand for customers, you've got to remain competitive and deliver for customers what they want," he said.

However, he quickly added his support for the incoming model, saying: "We're committed to Impreza, the next-generation Impreza will launch in quarter four of this year so it will be coming to Australia. We will be launching the next gen of Impreza. We see it still plays an important role for loyal Impreza owners, it's a strong nameplate [so] you don't make a decision to give that up lightly. And we think, for the segment it plays in, it still plays an important role to bring people into the brand."

One likely future for the Impreza is the addition of a hybrid model, which will almost-certainly be the same 2.0-litre petrol-electric combination used in the new Crosstrek SUV, which shares its platform with the Impreza. And Read opened the door to a possible all-electric Impreza in the future, as sales of electric sedans like the Tesla Model 3 grow.

"It could go hybrid, it could go electric," Read said. "You want to make sure you have diversity in the range, so Impreza is an important part of [the range], it's different from our SUVs and [makes for] a broader Subaru range."

Subaru has confirmed it will launch three all-electric models by 2026, but it's believed those will all come in the form of SUVs to play on the brand's strengths.

The new-generation Impreza features evolutionary styling and sits on an updated version of the modular Subaru Global Platform that was launched with the current model back in 2016. It gets a new infotainment system and other technology updates shared with the Crosstrek. Expect a similar line-up for the Impreza and Crosstrek, with the pair likely to share powertrain and similar trimlines.