* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *

Subaru Corporation (Japan)

Profile subscribers click here for full profile

Fuji Heavy Industries (FHI) is best-known for its automobile brand Subaru, although it also makes a variety of other products including forestry and agricultural machinery, military and commercial aircraft. Its passenger car brands include the Outback, Legacy and Impreza as well as a range of minivehicles for its domestic market, including the Stella and Pleo. A six-year alliance with General Motors was wound down in 2005, and instead Subaru now has a close working relationship with domestic giant Toyota. Performance has improved significantly as a result, and FHI has reported record sales and profits for the past four years, underpinned by excellent performance in its biggest market by far, the US. The company will finally change its name to Subaru Corporation on its centenary in April 2017.

Advertising

Who handles advertising? Click here for agency account assignments from adbrands.net. In the US, Kantar (in Advertising Age) reported measured expenditure of $326m for 2016, out of an estimated total of $487m.

Competitors

See Cars & Motor Vehicles Sector index for other companies

Brands & Activities

The Subaru brand encompasses a range of medium and small passenger cars, all of which feature FHI's proprietary AWD ("all wheel drive") steering for improved performance and safety. Among other features, Subaru's engines also have horizontally-opposed pistons which move from side-to-side rather than up and down like other manufacturers, reducing vibration and giving the marque a reputation as a sporty, high performance brand. The cars are currently marketed under the message "Confidence in motion."

For many years, FHI was one of General Motors' key partners in Asia, and the US company accumulated a shareholding of just over 20%. In 2005, however, GM ended the relationship, and sold its shares. Just under half of them were acquired by Toyota, with whom FHI agreed an new alliance. Under the terms of this partnership, FHI began producing Toyota's Camry model at its US factory in Indiana, and the two companies also work together on other projects including hybrid engine technology. In 2008, Toyota and FHI agreed a new partnership to jointly develop a new compact sports car for launch in 2011. As a result, Toyota increased its shareholding in FHI to 16.5%.

For calendar 2015, Subaru's total worldwide vehicle sales rose 6% to a new record of almost 972,000 vehicles (Focus2move figures). To put that figure in context it was slightly behind Skoda (1.1m) and ahead of Dodge or Lexus. Sales are concentrated quite tightly on North America and Japan, which between them account for more than 80% of volumes. The company has made a concerted effort to pull away from the minivehicle segment, which has traditionally formed the core of domestic sales. These include the Pleo and Stella models. Instead it has pushed hard to develop Japanese sales of the full-size passenger cars it sells internationally. The top seller among these is the Forester SUV, with global sales of 276k units in 2015, putting it just outside the Top 50 worldwide. The company sold a total of 162,250 vehicles in its domestic market in calendar 2015, ranking #7 nationally behind Mazda. Top sellers were the Impreza sports sedan and Levorg midsize tourer.

However, the US is by far the company's most important market, now accounting for almost 60% of total volumes. Sales have almost tripled there since 2008. Another impressive 13% increase in 2015 brought the total to 582,675 vehicles, making it the #9 best-selling make in the US, and the 4th largest Japanese brand behind Toyota, Honda and Nissan. It is the only auto brand to increase its sales in the US every year between 1998 and 2015. Much of Subaru's success in the US has been achieved through effective, memorable advertising. It has played heavily on its safety record, and its reputation as a manufacturer of family cars, with a superb series of witty but warm-hearted spots from long-serving agency Carmichael Lynch, under-pinned by the slogan "Love. It's what makes a Subaru, a Subaru". In 1986, FHI began manufacturing operations in the US, initially through a joint venture with Isuzu. In 2003, FHI took full ownership of that operation, now Subaru of Indiana Automotive. China, Canada and Australia are also important markets with sales of between 40,000 and 55,000 units. The group has manufacturing plants in the US and Taiwan, as well as five in Japan.

Automobiles form the largest part of the group's business, but it also has a number of other divisions. Its aerospace unit works with Boeing on commercial aircraft development, and also builds unmanned aircraft and military helicopters. The group's industrial products division makes pumps and engines under the Robin brandname and also supplied US company Polaris with all-terrain and snowmobile engines. It sold the divisions which make garbage collection trucks and generators during 2012.

Financials

FHI has delivered strong performance over the past few years. Net revenues have risen steadily by double digit percentages for more than four years, reaching a record Y3,232bn ($26.9bn) for the year to Mar 2016. Bottom line has also done exceptionally well, almost tripling in ye 2013 and then jumping by 73% in ye 2014. Another 67% jump in ye 2016 took the total to Y436.7bn ($3.6bn), also a best-ever result. Automobile manufacturing accounted for 94% of group revenues.

Background

The company was first conceived in 1917 by navy engineer Chikuhei Nakajima to design and build military aircraft, and by 1940 Nakajima Aircraft Company was one of Japan's leading manufacturers of warplanes. As a result the business was broken up following the end of World War II. Its main manufacturing division turned its attention instead to consumer transportation, developing the Rabbit motor scooter during the late 1940s, followed by mass-transit buses and trains. In 1953, permission was granted for the various parts of the former Nakajima company to be reconsolidated under the name Fuji Heavy Industries, and the business began developing its first prototype passenger car shortly afterwards. The Subaru brand name was selected in honour of the Japanese word for the constellation of stars commonly known as the Pleiades, and still featured in the brand's logo.

The Subaru 360 minicar was launched in 1958, and the company also began to build railway rolling stock and aircraft. The Subaru 1000, launched in 1965, was Japan's first mass-produced front-wheel-drive car, and FHI developed its own advanced symmetrical drive system, later known as AWD or all-wheel-drive. The company formed a business alliance with Nissan Motors in 1968, but this was terminated in 1999, and FHI agreed a new partnership with General Motors. The American company acquired just over 20% of the business, and the two companies set up a number of joint venture projects in Asia and Europe, making passenger cars and buses. That relationship too was terminated in 2005.

Last full revision 12th July 2016

* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *


All rights reserved © Mind Advertising Ltd 1998-2021