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

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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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.

  • ToolGuy North America is already the greatest country on the planet, and I have learned to be careful about what I wish for in terms of making changes. I mean, if Greenland wants to buy JDM vehicles, isn't that for the Danes to decide?
  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.
  • B-BodyBuick84 Mitsubishi Pajero Sport of course, a 7 seater, 2.4 turbo-diesel I4 BOF SUV with Super-Select 4WD, centre and rear locking diffs standard of course.
  • Corey Lewis Think how dated this 80s design was by 1995!
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