Subaru's Short-term Plan? Invade the South, Capture Hearts

To think of the Subaru brand is to think of the misty Pacific Northwest, the shimmering peaks of the Rockies, or the pastoral farms and rolling hills of New England. This is Subaru Country — where farmer’s markets and mountain biking awaits.

Well, Subaru head office wants to put an end to regional popularity, rolling out a five-year plan that targets the American South in a bid to boost North American sales by 20 percent.

Freshly minted Subaru President Tomomi Nakamura announced the automaker’s strategy (“STEP”) in Tokyo this week. While some of the initiatives involve rebuilding trust in its home market — where a vehicle inspection controversy devoured some of the public’s goodwill towards the brand — the rest are all about sales, sales, sales. Subaru’s aiming for an 18 percent increase in global sales over the time frame, with the U.S. playing a big role.

Subaru’s five-year window doesn’t start immediately; this newest planning period closes March 31st, 2026.

“The automotive industry is now in a tumultuous time. Subaru’s fast growth in recent years has come to highlight our challenges,” Nakamura said, as reported by Automotive News. “The question is how we, as a small-scale company, will be able to survive in this big-changing area.”

Besides bulking up its sales, Subaru plans to belatedly boost its investment in electrification. While the automaker plans to return a hybrid Crosstrek to the market for 2019, a couple of years after the previous, non plug-in version kicked the bucket, it was only made possible by a partnership with hybrid-heavy Toyota. A second Subaru hybrid should appear in the early 2020s, with an electric vehicle bowing in 2021.

At the same time, Subaru plans to tap into the rising thirst for SUVs. A dedicated “global strategic SUV” should launch around the same time as the aforementioned hybrid, apparently supplementing the new-for-2018 Ascent three-row crossover. Meanwhile, expect bolder styling. STI models will become extra fearsome. A cash infusion of $1.36 billion will target quality improvements.

“The quality of our company has failed to keep pace with our quantitative growth so far,” Nakamura said. “We will focus on improving the quality so that qualitative growth will outpace quantitative growth. That’s how I see growth as a brand.”

As for the brand’s Southern product PR plan, few details exist. But making inroads in that market is absolutely key for its global sales goals — North America counts for more than two-thirds of Subaru’s volume. Currently, the brand enjoys a market share of 3.7 percent, but Nakamura wants to ratchet that figure up to 5 percent by 2026. That means a volume of 920,000 vehicles.

The last fiscal year saw 671,000 vehicles sold in North America, with 770,000 estimated for the current year. The old five-year plan pegged 800,000 vehicles by early 2021.

Unlike some targets floated by rival automakers in recent years, Subaru’s uninterrupted North American sales climb over the past decade makes this plan seem doable. Sales rose 5.9 percent in the U.S. over the first half of 2018.

[Images: Subaru]