Report Outlines How Subaru is Coping With Quality Control Issues

Matt Posky
by Matt Posky
report outlines how subaru is coping with quality control issues

Subaru was one of the few automakers experiencing growth going into the Great Recession. When the financial crisis struck in earnest, Subaru’s volume briefly dipped to pre-recession levels before resuming its climb. Thanks largely to an enviable public image and desirable lineup, Subaru’s annual deliveries tripled between 2009 and 2018 inside the United States.

However Subaru’s quality rankings have lapsed in its quest to meet elevated demand. There has been a surge in recalls for the brand and some unsavory claims coming from the factory. According to internal documents seen by Automotive News, one of the primary reasons for this was due to rampant supply chain issues. The papers indicate that nearly half of Subaru’s suppliers were recently operating at quality levels below the company’s internal targets. Subaru is currently overhauling its own production processes and working with suppliers to improve quality and avoid developing a poor reputation with customers.

The automaker is familiar with its problems. An April 26th report by Subaru’s Quality Improvement Committee in Lafayette, Indiana, addressed an unpleasant increase of warranty, recall and other quality-related claims on U.S. vehicles ⁠— going from $241 million in the fiscal year ending March 31, 2015, to $900.1 million in the fiscal year ending March 31, 2019. The outlay over the five-year period surpassed $2.7 billion. It also said 70 percent of new Subaru vehicles are now the object of recalls or service campaigns within two years of being purchased, noting that the “permissible limit” should be around 10 percent.

From Automotive News:

Subaru is now focused on earning, in 2020, the top spot in Consumer Reports’ reliability ranking and escaping the lower ranks of J.D. Power’s Initial Quality Study, which is widely cited in auto advertising. Those goals were outlined in an internal report about Subaru of Indiana Automotive, the company’s manufacturing operations in Lafayette, Ind., issued in April by the company’s quality planning and management department.

In the closely watched Auto Reliability Survey from Consumer Reports, Subaru flourishes, finishing fourth in the fall 2018 report and second when the magazine updated the survey’s scores this spring. It wants to jump to No. 1 in 2020, the Subaru document says.

But in J.D. Power’s IQS report card, Subaru has consistently struggled. In 2018, it ranked fourth from the bottom in the industry, with 115 problems per 100 vehicles.

Subaru’s internal report said it wanted to “break out of the bottom” and improve to 101 problems in 2019, then move up to “middle ranking,” with 90 problems in 2020. But in the 2019 results, released last week, it finished seventh from the bottom, with 113 problems.

While Subaru did not authenticate the files, it did back up their assessment of the situation. “We acknowledge that over the past year we had more recalls than Subaru would like,” a corporate spokeswoman explained. “We want there to be zero. But when faced with a quality problem, we have been able to move quickly to get ahead of issues that might affect our customers.”

Subaru of Indiana Automotive has previously cited high turnover as a reoccurring problem. However, due to the sudden surge in demand and the factory adding more models, Subaru had little recourse but to hire more people after 2014. The internal report only makes minor issue of the elevated turnover and lack of veteran employees saying the site’s “sense of teamwork and sense of process ownership has degraded with the growth experienced since 2015,” adding it had hindered the factory’s “ability and previous strength to solve problems quickly.”

Some of those quality issues surfaced upon the launch of the Ascent, which Subaru President Tomomi Nakamura has noted. “I have already heard from our U.S. dealers that they are worried about brand image,” Nakamura said late in 2018. “It is true quality-related issues have been on the increase … There is a sense of complacency in various areas of our company.”

The company has been working overtime to ensure the sixth-generation Outback launch goes better.

Subaru of America (SOA) has directed most of those quality issues back at Japan. While the Ascent did suffer from supply problems and on-site quality control, the broader issue comes from its engineering if SOA is to be trusted. “The majority are conditions that SOA believes should have been identified during development and pre-production confirmation testing,” the report states.

It’s, of course, more complex than that. While internal reports from June 5th showcased improvements within Subaru’s domestic supply chain. Each month of the fiscal year that ended in March of 2019 showed suppliers missing Subaru’s target average defective part rate. The target, measured in parts per million (ppm), currently stands at 6 ppm. In four of the months, the average remained at 20 ppm or higher. Despite 107 suppliers having met Subaru’s internal quality goals, 101 others didn’t. Of those that failed, 32 had an average defect rate over 50 ppm.

That said, the company is still bending over backward to solve these problems. Headway is being made and internal documents stipulate that SOA is asking that Japan allow it to make more decisions for itself, rather than waiting for blessing from Asia to make supply chain changes. Hopefully, it comes together for the brand — lest it risk its stellar reputation to become the cheeky AWD manufacturer with the pleasant demeanor and some unpleasant quality problems.

[Image: Subaru]

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  • DeadWeight DeadWeight on Jun 24, 2019

    Can't comment to specific posters b/c WordPress is a mess on this site but I disliked, almost every Fuji Heavy - oops - almost every Subaru vehicle I've ever driven. Flaccid chassis', tin can feeling doors, cheap plastics/trim, many models (not all) with lifeless steering, many models (not all) with very loud interiors in terms of road noise, many models with cramped interiors regardless of segment, awful CVT transmissions, poor fuel economy, etc. I had a soft spot for the gen of Legacy GT that had the great gauges and the frameless side windows, though. Overall, middling quality/reliability vehicles with a massively inflated reliability reputation, with many expensive, recurring problem areas, with an overall feeling of cheapness... ...but man knowing what I do now, bring me back as the largest franchisee of Subaru Dealerships coast to coast (and especially in Washington, Colorado, Oregon, Utah, Massachusetts, California, etc., etc., etc.). I'm down for 300 dealerships or more! Proving once again that the general publics' tastebuds reside in its collective a$$!!!

  • Jeff S Jeff S on Jun 25, 2019

    I would choose a Rav4 over a Subaru. I might prefer a Rav4 over the newer CRVs and some of the other compact SUVs. Toyotas would be much easier to get parts and service for.

  • Art Vandelay Best? PCH from Ventura to somewhere near Lompoc. Most Famous? Route Irish
  • GT Ross The black wheel fad cannot die soon enough for me.
  • Brett Woods My 4-Runner had a manual with the 4-cylinder. It was acceptable but not really fun. I have thought before that auto with a six cylinder would have been smoother, more comfortable, and need less maintenance. Ditto my 4 banger manual Japanese pick-up. Nowhere near as nice as a GM with auto and six cylinders that I tried a bit later. Drove with a U.S. buddy who got one of the first C8s. He said he didn't even consider a manual. There was an article about how fewer than ten percent of buyers optioned a manual in the U.S. when they were available. Visited my English cousin who lived in a hilly suburb and she had a manual Range Rover and said she never even considered an automatic. That's culture for you.  Miata, Boxster, Mustang, Corvette and Camaro; I only want manual but I can see both sides of the argument for a Mustang, Camaro or Challenger. Once you get past a certain size and weight, cruising with automatic is a better dynamic. A dual clutch automatic is smoother, faster, probably more reliable, and still allows you to select and hold a gear. When you get these vehicles with a high performance envelope, dual-clutch automatic is what brings home the numbers. 
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  • Inside Looking Out In June 1973, Leonid Brezhnev arrived in Washington for his second summit meeting with President Richard Nixon. Knowing of the Soviet leader’s fondness for luxury automobiles, Nixon gave him a shiny Lincoln Continental. Brezhnev was delighted with the present and insisted on taking a spin around Camp David, speeding through turns while the president nervously asked him to slow down.