As Troubles At Home Hit Subaru's Bottom Line, Americans Do Their Duty and Hand the Brand Another Record

Steph Willems
by Steph Willems
as troubles at home hit subaru s bottom line americans do their duty and hand the

Subaru reported an operating loss in its most recent fiscal quarter, with recalls and regulatory scandals in its home market dragging the company into the red. The company said it lost $22 million in the quarter ending September 30th, a departure from last year’s $816.3 million operating profit. Meanwhile, global volume fell 6 percent.

In the company’s largest market — the United States — it was an entirely different scenario, with American buyers conspiring to give the brand its 83rd consecutive year-over-year sales increase. A record for October, too, but that’s sort of a given. Very nice of those buyers, but the credit really belongs to the Ascent crossover.

Like September, last month saw a year-over-year U.S. sales gain only because of the extra buyers dumped into the brand by the new three-row utility vehicle. The model’s best month so far saw an additional 6,008 vehicles added to Subaru’s sales roster, pushing the brand to a 2.5 percent monthly gain. Year to date, Subaru’s up 4.9 percent — mainly thanks to the Ascent.

Subtracting last year’s October YTD number from last month’s shows Subaru sold an additional 25,919 vehicles over the first 10 months of the year, not that far above the Ascent’s 22,588 figure. The automaker would still be up for the year without the new model, but it would be a very close thing indeed. The only other model in Subaru’s lineup to post a YTD gain is the Crosstrek, now up 39.7 percent.

With that said, the Crosstrek had company in the year-over-year sales gain club. Thanks to a redesigned ( but not too redesigned) Forester, that model posted a 19 percent YoY volume climb. It’s no surprise that the North American region was a money-maker for Subaru. Operating profit rose 4.4 percent last quarter.

Back in Japan, Subaru’s ongoing inspection scandal expanded Monday, with the automaker adding another 100,000 vehicles built as recently as last month to the roster of improperly inspected cars. No exported vehicles were among the group. In order to make good with the public, Subaru must now recall more than half a million vehicles in order to perform a task that should have been completed before the cars left the factory.

Adding to that headache and financial burden is a very expensive recall announced last week. Fragile valve springs in certain models forced the recall of 411,000 vehicles worldwide, and the work won’t be easy. Expect service technicians to spend many hours with each vehicle, and even more if there’s damage to the engine.

[Image: Subaru]

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  • Felix Hoenikker Felix Hoenikker on Nov 05, 2018

    We are in the market for a CUV for my wife. She likes to "sit high" after driving a minivan for a long time. The Outback is on my list of possible replacements, but this article only reinforces my hesitation about the Subaru brand. That, and the local dealer is a piece of work. Damn, how hard is it to make a valve spring? The problem reminds me of GMs cost cutting in the 80s that ultimately led to the bankruptcy. Any way, I will be asking for a big discount in order to get over the past history long term reliability issues. That, or a really cheap 3 year lease.

  • Vehic1 Vehic1 on Nov 05, 2018

    Subaru deserves credit for this record - which, at this time, is only about the nearly 7 years of monthly increases. Said increases, however, have long since ceased to reach the magnitude of those around the years 2012-2015; in fact, I wonder if a few of them may have been an "all hands on deck" effort, to wheeze forth the barest increase (urging dealers, perhaps, to trade in a personal vehicle) in order to keep the string/bragging rights alive.

  • Dusterdude @El scotto , I'm aware of the history, I have been in the "working world" for close to 40 years with many of them being in automotive. We have to look at situation in the "big picture". Did UAW make concessions in past ? - yes. Do they deserve an increase now ? -yes . Is their pay increase reasonable given their current compensation package ? Not at all ! By the way - are the automotive CEO's overpaid - definitely! (That is the case in many industries, and a separate topic). As the auto industry slowly but surely moves to EV's , the "big 3" will need to be producing top quality competitive vehicles or they will not survive.
  • Art_Vandelay “We skipped it because we didn’t think anyone would want to steal these things”-Hyundai
  • El scotto Huge lumbering SUV? Check. Unknown name soon to be made popular by Tiktok ilk? Check. Scads of these showing up in school drop-off lines? Check. The only real over/under is if these will have as much cachet as Land Rovers themselves? A bespoken item had to be new at one time. Bonus "accepted by the right kind of people" points if EBFlex or Tassos disapproves.
  • El scotto No, "brothers and sisters" are the core strength of the union. So you'll take less money and less benefits because "my company really needs helped out"? The UAW already did that with two-tier employees and concessions on their last contract.The Big 3 have never, ever locked out the UAW. The Big 3 have agreed to every collective bargaining agreement since WWII. Neither side will change.
  • El scotto Never mind that that F-1 is a bigger circus than EBFlex and Tassos shopping together for their new BDSM outfits and personal lubricants. Also, the F1 rumor mill churns more than EBFlex's mind choosing a new Sharpie to make his next "Free Candy" sign for his white Ram work van. GM will spend a year or two learning how things work in F1. By the third or fourth year GM will have a competitive "F-1 LS" engine. After they win a race or two Ferrari will protest to highest F-1 authorities. Something not mentioned: Will GM get tens of millions of dollars from F-1? Ferrari gets 30 million a year as a participation trophy.