Why Subaru is worried about its soaring sales

The company's vehicles are so popular that its parent company's CEO is now concerned the carmaker may get too big for its own good.

By Jonathan Berr Aug 13, 2013 7:04AM
Subaru Foresters are lined up at Twin City Subaru in Berlin, Vt. on Feb. 26, 2013 (© Toby Talbot/AP Photo)Subarus are proving to be so popular that the CEO of the Japanese automaker's parent company, whose shares have surged by 412% since 2012, is worried that it may be getting too big. His concern is understandable.

In the current fiscal year, sales of Subaru, which is part of Fuji Heavy Industries, skyrocketed by 13% to 724,000 and may hit 752,000 by next March and 1 million by the end of the decade, according to Bloomberg News. Earlier this year, Subaru denied a Wall Street Journal story that it was concerned about shortages.

One reason for Subaru's success is the quality of its cars. The U.S. Insurance Institute for Highway Safety has given the new Forrester SUV (pictured) its highest safety award, making Subaru the only automaker to receive the accolade for four straight years, according to Bloomberg News.

Sales of Subaru's Impreza sedans more than doubled in 2012, and the new BRZ sports car was so popular that at one point consumers had to wait eight months to buy one. 

"We're standing at a major turning point for Subaru," Fuji Heavy Industries president Yasuyuki Yoshinaga told Bloomberg News. "Some people in the company may want to make mass-market products or cheaper cars, but is this really the right direction for Subaru? We're not a carmaker that can grow as big as Toyota. And even if we could, reaching that sort of scale would mean we'd stop being Subaru."

During the past quarter, Fuji Heavy Industries' profit almost tripled to a record 48.5 billion yen (about $500 million). Analysts estimate the company will finish the fiscal year in March earning more than Suzuki, which makes twice as many vehicles as Fuji Heavy Industries, Bloomberg said.

Still, Subaru shows no signs of slowing. It plans to invest $400 million to boost output as demand for its vehicles continues to rise. CEO Yoshinaga will likely be looking over his shoulder, though, for any problems that appear because of rising production.

Follow Jonathan Berr on Twitter @jdberr.


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121Comments
Aug 13, 2013 10:39AM
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Nice to see a CEO and President thinking about the quality of the product over the profit to be made.

You never see Subaru having  a sale or having to give incentives to get customers.

Aug 13, 2013 11:08AM
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It is nice to see a company worried about what will happen to them if they expand too much or too quickly.  Something the small company feel is much better than a large company.  They need to stay in touch with who is purchasing their cars and why they are buying these cars. 

Aug 13, 2013 10:34AM
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I've got a 2012 Impreza 5 Door Sport Premium.  Excellent car for the money.  AWD up here in the North is a plus and 36 mpg hwy for an awd is decent.   I only h ave 30k miles on it so far, but zero repairs have been needed.  Great steering and road control on this model also.  Steering and control very close to a BMW 3 series I use to drive.
Aug 13, 2013 10:38AM
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US car makers still have a ways to go. Japan has forced them to get better or they would still be making total junk.

Aug 13, 2013 11:07AM
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Subaru has been making rock solid vehicles since the 80s; the problem with the older cars was the quirkiness, those strange features, odd layout, weird design  queues and funky engine layout.  Today the boxer engine is no longer considered funky, they've cut out the quirky interior design and exterior design queues, but left everything that made them great machines.  Solid construction, green manufacturing, top tier AWD systems, and peppy (or downright powerful) engines.

Subaru currently has one of the most loyal buyer bases.

Sales won't flag from quality, that's always been their, sales will flag if their quality flags.  If they stop being subaru, why buy a subaru? And THAT, is why they're worried.  

Sounds to me like they're learning a lesson from what happened to US Mitsubishi.  Cars started out with a mission, a goal, but as they became popular and volumes increased, quality left and the cars' souls were stripped down to the point that they were Toyota clones... and if you're gonna buy a Mitsubishi that behaves like a Toyota copy, why not buy a Toyota?

unrelated, except that it falls into the quirky category, is that the Subaru Justy of the mid-80s could be ordered with a CVT... a bad one, but a CVT none the less, now 30 years before they started hitting mainstream.
Aug 13, 2013 11:31AM
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Don't sacrifice Quality for Quanitity

 

Aug 13, 2013 11:23AM
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Have a 2000 Forester and LOVE it.  Let it go another 10 years.
Aug 13, 2013 11:16AM
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Subaru builds a fantastic automobile.  If I didn't love my '09 Civic, and not having a car payment, I'd be driving a Subaru.
Aug 13, 2013 12:31PM
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A good problem to have! Domestic auto makers should of taken notice along time ago.
Aug 13, 2013 12:25PM
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Back before they were a popular car (early 80's) I had a wagon version.
Subaru stood behind any and all issues I had with this car.
Timing belt broke @ 60k miles, Cost me the tow to get it to the dealer.
and I had it back that DAY!
This was a great car that stood up to all the hype it didn't get at that time
This car was totaled in a head-on that left my wife with some moderate bruises
Posted speed limit for that street is 50mph.
They made damn good cars then and under their current leadership that looks to continue.


Aug 13, 2013 11:23AM
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It's great to see manufacturers who embrace quality be rewarded for their commitment to excellence.
The world has become so pumped full of m****duced "replaceable" products that consumers barely understand what the word quality means anymore. 
This is the type of good news we need to see more often. 
Aug 13, 2013 12:46PM
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My Subie is a 1998 with 235,000 miles on it and counting. Just used it for a beach vacation driving 9 hours each way. These cars don't get enough credit for their quality. I've had BMW, Jaguar, Volvo, Honda(Acura), Mitsubishi, Chevy, Ford (probably forgetting something) and the Subie has been the most reliable by far. Not even close.

 

Every once in a while I'll catch myself thinking that maybe next time I'll get something else, and then I realize that it would be stupid to buy anything other than a Subaru for my climate and my needs.

Aug 13, 2013 11:12AM
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My parents had a Loyal wagon and even with being lazy about the upkeep; that car lasted 10 winters for them, two years with me, and five years with my step sons before someone broad sided them with a full size car totaling our beloved car, but with no injuries to the boys.

I bought a well used GL 10 Turbo and drove the wheels off of it, endured three accidents and put it back on the road every time.  These cars are built like a tank and just keep going and going even with out regular proper maintenance.  If Subaru wants to ramp up production they should come to Arizona's job starved area to build their next factory.  If these cars can survive AZ's tortuous climate they can hold up under any condition.

Aug 13, 2013 1:37PM
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When our oldest daughter went looking for her first car, we looked at the 2011 Imprezas and were very impressed and she bought one.  We bought a 2012 Impreza and absolutely love it.  My wife and I fight as to who is going to drive it.  We are planning to purchase a Forester next spring and are converts to Subaru. Don't know if we will ever buy anything different, tyey are that good of a car
Aug 13, 2013 11:51AM
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A 1982 Subaru coupe was the toughest car I've ever known. We ripped the doors off it, and rolled it sideways down a very large hill with 4 people inside, it stalled then... then started right back up. We drove it home with a crushed roof, and buried it in the back yard. I bet I could go dig it up, replace the oil, gas, battery, and carb and it would start again. If I was buying Japanese, which I haven't since my 1990 Nissan Pickup, I would buy a Subaru w/o blinking an eye.
Aug 13, 2013 1:50PM
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love our Subaru's (2002 Outback, 2010 Impreza),  even more now knowing the CEO is more worried about quality over quantity and profit, you never hear that from company's! its always about the $$$, My family will always drive Subaru.
Aug 13, 2013 11:50AM
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I've owned a Brat (seats facing backwards, anyone?), a Loyal Wagon, a Justy (3-cylinders!), a Legacy sedan and an Impreza WRX at various times from 1979 until just last year. All were very reliable. True, you have to keep up on the preventative maintenance like Someone said. Subies were always a niche market and quirky (like their owners). Kinda sad that in the last few years they have gone more mainstream (especially with the looks), but they are still great, reliable and safe vehicles.
Aug 13, 2013 1:52PM
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Great way to make an ad look like news!!
Aug 13, 2013 1:23PM
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Subaru , makes awesome cars and SUV's ! All of them carry boxer engines, all wheel drive, then they come standard with power, windows, locks, tilt, keyless remote and cruise. They are the safest vehicles on the road! Anyone who can afford one should, buy one. Because they are very dependable and also they are practically maintenance free. What car manufacture has four vehicles, with four star ratings other than Subaru? Only BMW and that says a lot!!
Aug 13, 2013 6:51PM
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Build as many as you can while keeping the quality at 100 percent.   If you run out, oh well, we can wait.  

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