Is Toyota preparing to purchase Fuji Heavy outright?
Winding Road is reporting that a recent change in Japan's anti-trust regulations might mean that Toyota has a clear shot at acquiring a controlling interest in Fujji Heavy Industries, the parent company of Subaru. Lest you think this might be some pie-in-the-sky notion, Subaru admits it could use the help. Toyota already has an 8.7% minority share in Subaru's parent company. With the changes in restrictions, Toyota could make a move and gobble up Subaru and all of its awd motorsports prowess.
TheCarConnection interviewed Subaru CEO Ikuo Mori, who basically admitted that Subaru might not be long for this world without Toyota's cash infusion. That doesn't mean we'd see badge engineering between the brands anytime soon, however. This wouldn't be like its partnership with GM according to the spokesperson. No 9-7X-like crossover projects are expected, but changes are in the works. Subaru apparently has set its sights on Southern California as a new focal point for the future of the company. And some extra cash would certainly help Subaru achieve its goal of increasing worldwide sales by 15% over the next three years.
[Source: Winding Road]
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Reader Comments (Page 1 of 2)
Steve 3:10PM (4/12/2007)
So is that why the new impreza looks like a corrola?
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whofan 3:14PM (4/12/2007)
Subaru builds better cars than Toyota. What a backwards world we live in. If the tables were turned who would bother to purchase Toyota?
Toyota is smart I`ll give them that much.
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J 9:49PM (4/12/2007)
Toyota would castrate subaru... like it did to it's cars.
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Ken 3:22PM (4/12/2007)
I would rather see Porsche buy Subaru - that would be cool.
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Owen 3:23PM (4/12/2007)
#2. You're spot on. Toyota knows how to build inoffensive very well. Subaru’s engineering is top notch, their design is no better than Toyotas. I guess inoffensive Subarus wouldn’t be the end of the world, but I fear that they would also make the suspension "innofensive" as well in the sake of saving a buck as Toyota tends to do, next thing you know they'll lose the Boxer engines and go with a cheaper to produce V6 in the name of cost savings, which will say bye-bye to the symmetrical AWD, which will introduce torque steer and unpredictability. The engineers at Subaru are smart, smarter than the bean counters at toyota. Their designers are the ones that need to be put out to pasture. And as many people bash the new hatch WRX, when I saw it in NYC last weekend, all I could think was that if I couldn’t have my BMW 1 series hatch, this is the closest I was going to come. Yes, they could have done better with the grill and the taillights with all of its faux-bling. But that sheet metal is gorgeous.
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araemo 4:00PM (4/12/2007)
#5: I don't know what subaru's you've driven lately, but the base Impreza(IE, the Impreza without the "WRX" badging) does have an 'inoffensive' suspension(Well, it offended me, but I'm not the target for that kind of car).
I've never felt a suspension so soft or with so much body roll on a 'small' car.
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Fazzster 3:35PM (4/12/2007)
From a pure business standpoint, this will be really good for Subaru. Toyota knows how to run a company. The key is to leave the Subaru product alone and let a Subaru be a Subaru. We have all seen what happened when GM started making GM engineered Saabs; we ended up with Swedish branded Chevy Malibus......
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throwback 3:48PM (4/12/2007)
I don't know why this has not happened sooner. As soon as Toyota bought GM's Subaru stock, I assumed Toyota would absorb them. Say good bye to boxer engines if they do.
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tweezy 3:55PM (4/12/2007)
"So is that why the new impreza looks like a corrola?"
I was about to say something similar, except in my opinion, the Impreza looks more like the previous-gen Camry.
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arcsine 3:59PM (4/12/2007)
Whatever happened to that Subaru-engineered Toyota coupe in the rumor mill? I'd drive a Celica with a WRX drivetrain any day of the week.
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Turbofrog 4:01PM (4/12/2007)
All this speculation of Subaru losing its identity is completely unfounded. There's no reason to eliminate the company's competitive advantage - Toyota already builds Toyotas, they don't need to dedicate resources to a smaller company with a smaller dealer network to sell more of the same.
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Hamud 4:01PM (4/12/2007)
I see this a good think, as far as Toyota could only put money and not hands on Subaru...
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Hamud 4:03PM (4/12/2007)
Woot, i really mistyped up there, I meant "I see this as a good thing".
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Aaron 5:35AM (4/13/2007)
Listen... many of you are either biased or uninformed or both and those that aren't are totally missing the point altogether..
The Fusion:
First and foremost, for the last time the Fusion just used Mazda 6's platform, of which the Mazda 6 already uses Ford's Duratec 23 and Duratec 30 engines as well. Moreover the Fusion has been made to handle much better than the Mazda 6 (per MANY test drivers and journalists); and C&R also put it up against the Camry Accord and Sonata earlier last year BEFORE it had an AWD option and it STILL handled better. Moreover, the quality of the Fusion is not only superior to the Mazda 6 (per many quality testing organizations, JD/CR/etc) but also in some instances, (specifically CR), the Fusion has thus far proven to be a little more reliable than the Accord and Camry. Which leads me to another point.. Fusion sales. For those of you who must compare the sales of the Fusion with the Accord and Camry you must acknowledge than even if its sales are only 1/3 that of the Accord or Camry... how long has the Accord and Camry been around and had the chance to build a name for itself? Far more than 3/1 times the chance of the Fusions measly two years on the market! So given that data if Fusion sales increase at the same rate they are now it'll only take 6 short years for the brand new Fusion name to be as popular as two other nameplates DECADES old that are known to be the two best sedans in America up to now.. How clueless do you have to be to not understand this simple fact!!
Mazda:
There are many of you that love to say "something something Ford...is actually made by Mazda, so it's Japanese..something something, Ford can't do anything right something something.." Well I'll have you know that most of Mazda's North American products are actually Fords are were already sharing Ford parts. For instance Mazda 6 (See above) uses Ford's Duratec 23 and Duratec 30 engines, the same engines used in the Ranger, the Taurus, the Focus, Escape, Freestyle, etc. The Mazda 3, is actually a Euro Ford Focus. The B-Series truck is a Ford Ranger. The Mazda Tribute.. pretty simple, it's a Ford Escape with new body panels. The RX-8, while it doesn't share parts with a Ford, Ford had a large part in why it has been successful, i.e. they would not allow Mazda to build it unless they were sure the new rotary engine will be much more reliable than the last few and that it had to have four doors (something that has made it very successful, even though I'd prefer it had just two). Mazda Miata.. to be honest I'm not too familiar with the Miata's development but the Mazdaspeed Miata in other countries uses the Ford Duratec 23 base engine.. but Miata and RX-8 aside.. unless I'm forgetting a model, all of their other cars are either Ford's or use a large amount of Ford parts. So please the whole Mazda builds better cars Ford is imcompotent arguement can stop.. it's oximoronic. Furthermore, please go to JD Power and look at the Vehicle Dependability study for the last few years to see that Ford has consistently been more reliable than Mazda.
Ford:
No doubt has made some serious mistakes in the past and became very complacent with its vehicles, rarely if ever updating them expecting their past popularity to sell itself.. WRONG! I'll start by at least identifying the full scope of their neglect just to clarify exactly had bad they were versus how much they've improved as of late: Ford had at one point in time almost the best selling model of EVERY single category or class, (hence why despite the situation they are in the Ford brand is still the best selling nameplate today). They HAD the best selling small car - Ford Escort; they HAD the best selling sedan - Taurus; they HAD the best selling small truck - Ranger; and they may still HAVE, but lately declining, the best selling large car - Ford Crown Victoria; the best selling full-size van - Ford Econoline; the best selling SUV - Ford Explorer; the best selling full-size pick-up - Ford F-Series; ETC. This is quite depressing..but I believe FINALLY with the amount of feedback they've been paying attention to online they realized many (not all) of the mistakes they've made with their cars and trucks and are taking huge steps to fix them.. They are going to refresh all of their lineup by 2010, and until then they have significantly remodeled the Focus, came out with a new sedan to compete with the Accord and Camry (which is already in many cases better). They are coming out with new more versitle engines (3.5, 5.0 to replace the 3.0 and 4.6), although they still need more. And they're reliability has been improving greatly, (as they were the only domestic automaker with all of their main brands under the industry average on JD Powers VDS) etc. The problem is too many people expect one of the world's top ten largest companies to be able to change overnight, (it's a lot harder to turn around an aircraft carrier than a canoe!). Which is why they are cutting jobs and closing factories and pulling out of rental fleet sales; to become a smaller more manueverable "boat".. it's called trimming the fat; something they've needed to do, but is misconstrued as a failing company whereas they are in a better position to succeed from this point forward than they have been in decades, IT JUST TAKES TIME TO SEE RESULTS!! When you pay for education you don't consider yourself making a bad investment because your funds depleat term after term, because you know after a couple years it pays off and you have a degree to better market yourself in the workforce. Get over your long time prejudice of Ford.. you can't use old precedents to attribut the Ford of today and where it's headed because it's a completely different Ford than it has ever been.
Toyota:
Is beginning to and will face many of the same problems Ford and GM have in the near future.. While the domestics have been playing catch up on quality and fit and finish.. the Japanese have lost much of their upwardly increasing momentum with regards to improving quality. Whether that means they are already as reliable as they can be (not likely) and there is no longer any room for significant improvement or they are just getting to big too fast out-pacing their quality control capacity remains to be seen, but either way they will be facing many of the same problems.
I expect nobody to read all of this.. much less want to set aside their pride to listen.
For the record there is a 2003 Toyota Solara in my driveway, next to my Ford Ranger, (261,000 miles) and I've owned Hondas, GMs, Volkswagens, Audi's, etc.. from all countries of origin.. and am not a fanboy of any kind, just a realist, nor am I a Democrat or Republican (or belong to any party for that matter) so I do not have some political swayed bias to affect my opinions..er, facts.
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Felix 4:15PM (4/12/2007)
I agree with turbofrog. We're not giving toyota enough credit. They know they're boring and they know boring is what MOST people want. They also know they need interesting cars for the rest of us.
Why would they buy subaru simply to turn it into a toyota competitor by making them boring? Toyota may be many things, but they are NOT stupid.
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dcwf 4:21PM (4/12/2007)
Why not leave Subaru as Subaru? (after all, that's what makes a Subaru a Subaru -- sorry) Toyota now has three divisions in this country: Scion, Toyota, and Lexus. They each target a different market segment. In the U.S., Subaru's market segment is totally different from Lexus or Scion, and only partially overalps with Toyota itself.
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BEN 7:40PM (4/12/2007)
IS THAT WHY SUBARU RELASED THE ALL NEW MATRIX?
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Lithous 4:46PM (4/12/2007)
"Subaru CEO Ikuo Mori admits that for all intents and purposes, his company would likely not survive without Toyota’s deep pockets."
So, before the regulations changed, why didn't we see a Subaru Death Watch series? Oh, Farrago knew about the regulation change and that Toyota would buy them and that doesn't count as "death" apparently (well, unless GM got bought by Toyota or some other company then he would be pronouncing himself successful in that the real GM would be dead).
I'm just starting to get a hang of truth as it pertains to cars. Wow, mind boggling stuff.
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Stéphane Dumas 4:48PM (4/12/2007)
Maybe I'm too pessimistic, but I ponder if it could be the beginning of the end for Subaru in the long-term, following a path similar to Hino? I spotted a French article about Hino at
http://www.leblogauto.com/2006/12/tiroirs-de-l%E2%80%99insolite-hino-alpine.html (you need Google translation or Alta-vista to translate from French to English)
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mk 4:50PM (4/12/2007)
I don't know... This could go either way.
Subaru is nailing it's own coffin with ugly designs, lack of support, lack of marketing, and HUGE lack of options. But their chassis design, and inherent AWD Boxer-engined platform is sound, and has great potential.
With money, subaru could turn it around, and bring their designs back up. However, their American headquarters in New Jersey needs to be brought in line. Compare the Legacy/Outback lineup in North America to all the other markets, and you will see what I mean. Tribeca is a US-target product, and the WRX is built in Japan, with less involvement from Subaru's american arm.
OR, with Toyota's control, the integrity of Subaru could be compromized in search of market growth.
The 08 WRX is severely handicapped by trying to play "me too" in the hatchback game, when it has AWD, and a Turbo WRX and STI (coming) variant that play in tougher segments. The soft econobox "corolla-esque" styling will not, and is not playing well there. More of that from the master-of-bland Toyota, and Subaru will die regardless.
Subaru is harder-core and more sporty than Scion, but could learn a few customer-relations lessons from Scion. Subaru is not just a toyota competitor. It offers something different, and much more enthusiast-centered.
Money infusion would be good. The wrong decisions on Toyota OR Subaru's part, regardless of the money, could be lethal to Subaru at this point.
Andy Why southern california? Subarus aren't hot-rod culture cars, even though some are fast, Why not somewhere farther north, where AWD Subarus sell better? (and avoid the costs associated with doing business in the People's Republic of California.)
People in LA don't drive subarus, by and large. They drive more expensive, and less practical cars, if at all possible. How about new england, The upper midwest, or the northwest? somewhere where value, quality and AWD are useful. And performance is still asked for, as well.
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