Filed under: Subaru, Earnings/Financials
Fuji Heavy eyes America for future profits
Fuji Heavy Industries, parent company of Subaru, has missed its sales goal for a five-year plan that ends next month. The end of one five-year plan, however, is the beginning of another. The next five years will see Subaru putting a much larger emphasis on the U.S. market (w00t!). The Japanese automaker is aware that it can't squeeze any more sales out of the home market, so it's looking to America to supply the extra sales it needs to meet new targets. To achieve this goal, Subaru will supplement its U.S. headquarters in New Jersey with a satellite branch in the City of Angles (Los Angeles). The company hopes that the power of the sun rays combined with the magical properties of California drinking water will give its brand insight into what customers want in the Sun Belt states. In addition, we'll be getting 24 more Subaru dealers by 2010 to help push the all-wheel drive wares. Finally, a new production facility is being considered, though it wouldn't be located in either Japan or the U.S. Currently Subaru sells only 179,000 vehicles in the U.S. compared to 242,000 units in Japan. By 2011, round about when the new five-year plan will be winding down, Subaru expects to be selling about 236,000 in both markets.
[Source: Automotive News]
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Reader Comments (Page 1 of 1)
mk 1:41PM (2/28/2007)
Wow. This could be interesting.
If they fix their marketing, sales support, and product planning issues, they could be in for an upswing.
If they offer their cars with more options that the competitors have, more choices for the buyers to choose from, and don't cut themselves off at the knees with lack of inventory and product awareness, they could do well.
Unfortunatley they are not doing that now.
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Steve 1:45PM (2/28/2007)
They could of course start by offering a model that was attractive that you would want to buy on looks alone instead of having to buy in spite of its looks.
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Dude 2:20PM (2/28/2007)
I am waiting for them to put bigger hood scoops (why stop until they look like funny car hood scoops), larger wings (yes, when they look like they belong on a SuperBird they're no longer spoilers) and flourescent calipers on their cars before I even think about them.
They will learn about all of this when they come to LA.
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the marais 2:20PM (2/28/2007)
I like Subarus. I would have leased one if the residuals had not been so awful. Horrible depreciation rates.
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Michael Karesh 2:36PM (2/28/2007)
Steve #2: what's wrong with the looks of the Legacy?
Anyway, two possible outcomes:
1. The Legacy GT wagon with 5-speed manual returns, along with other products pruned in recent years
2. The next Legacy is a Camry clone
Will the new office be in Torrance, by chance?
My site's page for the Legacy, which loses the wagon for 2008:
http://www.truedelta.com/models/Legacy.php
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Dandy 3:17PM (2/28/2007)
I like Subaru, but I think the same thing that makes them great (AWD on every vehicle) also hurts them. They're very big here where we get snow, but to the lay-person they hear AWD and they don't understand that it helps with more than driving in the snow. That and they're priced higher than the competition, probably because of the AWD.
It's kind of lose/lose. They're not going to make the average american care that AWD is also great for wet, not just snow. And they're not (well they better not) offer FWD cars again.
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whofan 3:19PM (2/28/2007)
They need more dealers in the north. Subaru needs to get rid of the suck a sour lemmon look like that of the Tribeca.
If people would go out and shop for cars instead of going on perception Subaru would rise and Toyota would fall. Mazda, Subaru are the nice Japanese cars.
I enjoy my standard of living so I`d have to be pushed hard not to buy domestic.
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JG 3:44PM (2/28/2007)
Prices need to go down.
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Richard 3:48PM (2/28/2007)
Whofan (#7),
If people would go out and shop for cars looking at the Legacy 3 Series, Passat and A4 sales would drop.
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whofan 4:15PM (2/28/2007)
". Whofan (#7),
If people would go out and shop for cars looking at the Legacy 3 Series, Passat and A4 sales would drop."
I agree with you here. I was refering to the almighty, Toyota.
Ford and GM is allowed to compete in Europe. So if pushed to buy foriegn, the Europeans give us a fare shake. But Subaru has my respect. I do think Subaru is a bit over priced. They are more apples to apples with Volkswagon. I place Audi a bit higher than Subaru on the scale.
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Paul Y 5:08PM (2/28/2007)
For what it's worth, the inverted Alfa grill is going away.
As the owner (sort of, it's NY-style "balloon payment financing") of an 05 Impreza, I have to say a few things in response to this thread:
1) The depreciation is not that bad. I could probably get out of my "lease" (I'm a bit more than halfway through) and still make a solid $1000 or so (i.e., selling the car), maybe a bit more, judging by what comparable 05 Imprezas go for nowadays.
2) The B9 Tribeca is fugly, but the rest of their lineup isn't that ugly. Even still, the looks of these cars grow on you, really. I actually really like the 04-05 Impreza face, in particular, even before I bought it. The 05-up Legacy is a rather handsome car, and the 04-up Forester doesn't look bad, despite its popemobile-esque proportions.
If anything, the worst thing for Subaru right now is that AWD is becoming more common in cars (despite the half-assed mostly-FWD systems that momst cars have), as most people don't bother to make a distinction between AWD systems.
FWIW, I'll never want a 2WD car again, so I'm going to be stuck buying Subarus forever, I think. It's alright, though, as I love my Impreza. It's reasonably efficient, and has enough power to put a smile on my face
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Howard Kerr 5:37PM (2/28/2007)
Several years ago, my aunt went looking for a car to replace her Buick Regal GS (the supercharged model). My cousin (her daughter) researched the hell out of cars for her mom and got her a deal on a Legacy wagon. Since my cuz has a masters in B.A. I don't think she picked the Legacy with the idea it had poor depreciation...but let's get it for the AWD. My aunt wasn't brand loyal and just wanted a "car-like" SUV.
When the lease was about 3/4s of the way up, my aunt was contacted about moving into a new ('06) Legacy. She said no, she liked the car too much, that even with the very sweet deal they offered her (Subaru was/is desperate to move metal) she was going to buy the car. My aunt was 80 years old at the time and used her car mainly for grocery getting and doctor's appointments. It was the typical "little old lady's ride"....she would not have lost money.
Let's hope that while Subaru increases sales, it doesn't go to mainstream....some quirk is okay.
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Allen K. 5:39PM (2/28/2007)
I love my Subie, and don't live in the cold climate. I find the AWD to be a perfect fit for the crazy and often muddy streets in Texas. I find the styling of the Outback to be just fine for me (I like it), and my other ride is an '06 325i. It's my perfect everyday car. I just hope they don't skimp on engineering for looks.
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polar 5:52PM (2/28/2007)
Here's an idea, do NOT stop producing the wagons. In fact, bring the sporty wagon variants stateside!
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Allen Klosowski 6:09PM (2/28/2007)
@ Paul Y.
I agree with you, I'm sold on AWD from now on. The driving experience is just that much more confident in all weathers. I put mine through the paces in a winter trip through the Colorado Rockies, and we were going places with ease while other cars were getting stranded all around us.
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booboojeebies 6:33PM (2/28/2007)
"4. I like Subarus. I would have leased one if the residuals had not been so awful. Horrible depreciation rates."
While I agree that Subaru isn't very competitive with leasing, the legacy has an over 50% residual over a three year period, that's right up there with a 3 series, honda, etc, go check it on truedelta or edmunds.
#10. and #7
We had two A4s. We bought a Legacy Limited this time. We easily saved over 10K. For that much difference, the subie is pretty class inside and out.
Talking about depreciation, VW takes the cake, go check that too. The passat had other issues that we completely disliked (and we've had 4 VWs over the years too) like lots of lag when you step on the gas, needless package options, can't get 2.0 and AWD, etc... I can't say anything bad about Audi, we loved ours, but we just couldn't justify the price any longer...
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akatsuki 11:55AM (3/01/2007)
I think styling has really killed them. The Impreza goes from bland to ugly to bland. The Tribeca was aspiring to Aztek levels of ugliness. The Legacy/Outback look nice, but bland.
You want to increase sales, go hire Giugaro, Ian Callum or Pininfarina to design your cars. Because your in-house studio frankly sucks.
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Steve S 8:00PM (3/01/2007)
Don't get me wrong their cars are not awful looking but they are not pretty. The outback and legacy wagon are fine the legacy sedan is OK but fairly plain. A Spec B competes on price to a G35, CTS and so forth, it needs to offer more than good performance and AWD to capture buyers.
Take a look at Mazda a similar sized company. The 3, 6, RX8, MX5, CX7 are all attractive vehicles and handle reasonably well. Subaru has the quality and performance they just need a pretty wrapper.
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kenneth 7:06AM (3/02/2007)
I love my Subie. I will never own anything else. I think they need to offer some of there "rarer" cars. I also think they need to keep moving up with the engine specs on all the cars. That is what most of America is looking for, "more power." Take the WRX Sti for example, in the 04-05 model the enging was pushing out a good 300 hp/tq. In the new models it went down.
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Jeff Gilleran 1:58PM (3/03/2007)
I agree with #17.
Subaru has had several hits and misses recently with the Impreza in general.
I like the look of the new Legacy.. the Feline shape is nice.
What i wish they would do is bring back another version of the SVX, that was in fact, a Giugaro design and run with it in the sport/luxury class.
I dont agree with the loss of what I feel is the "bread and butter" vehicle, and thats Subarus usual Wagon and Sedan.
They current Outback isnt exactly cheap.
Price is indeed an area Subaru needs to keep tidy with.
The old Addage, "inexpensive and built to stay that way" has really disappeared in todays market for Subaru.
I love Subaru, but they do need to build a nice neat slightly under 15K class for younger drivers to afford, while still netting AWD and great mileage.
Just dont bring back they ultra inexpensive Justy.
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