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Subaru says they now face an “uncertain situation” because of the strategy they adopted years ago. Subaru Corporation recently released its financial report, and the outlook is dismal to start the new year. The Japanese automaker says its profits dropped by two-thirds in the latest quarter as the production of its refreshed 2022 Forester, Outback, Crosstrek, and other new models fell and affected sales results.
Subaru of America was the envy of the automotive world with an industry-best 11 straight years of sales record in-a-row and it came to an end in 2020 when COVID hit. But the Camden, N.J. automaker has different concerns now.
photo credit: Subaru of America
Everything changed for Subaru with the microchip shortages and supply chain issues that have limited production of its popular Forester compact SUV, Outback midsize SUV, and Crosstrek subcompact SUV. Now instead of setting records, the automaker is trying to figure out how to satisfy its customers.
Why was Subaru hit harder than other automakers?
"We have embraced this select and focused strategy, and because of this, I think we have been hit harder by chip shortages," he said. "This is the fate of taking this strategy,” Subaru CFO Katsuyuki Mizuma told Automotive News.
photo credit: Boise Subaru
"We only have two production sites in Japan and the U.S., and have also narrowed down our models, and have been promoting the use of shared parts," Mizuma said.
Subaru narrows down its models
Subaru Corporation paired down its models. They discontinued the Forester XT turbocharged model, and now have no manual transmission trim levels in the 2022 Forester, Outback or Legacy models. They discontinued the Tribeca although they replaced it with the Ascent 3-Row SUV.
Subaru also discontinued the WRX hatchback body style and the WRX STI hatchback is also gone. Subaru also got rid of the Baja, SVX, Subaru Loyale, and Subaru Brat over the past fifteen to twenty years. They did all this to streamline its all-wheel-drive lineup.
Subaru of America has only nine models.
The Camden, N.J. automaker has a small lineup with the Forester compact SUV, Outback midsize SUV/crossover, Crosstrek subcompact SUV, Ascent 3-Row SUV, Impreza compact, Legacy sedan, WRX and WRX STI performance sports cars, and BRZ sports coupe.
Subaru shared parts
The Outback and Legacy are manufactured at the plant in Lafayette, Indiana, and share many of the same parts. The WRX and WRX STI are manufactured in Gunma, Japan, and also share many of the same parts. The Subaru Impreza compact and Crosstrek subcompact SUV also share many of the same parts.
All next-generation Subaru models ride on the new Subaru Global Platform using many of the same parts.
Subaru’s shared parts help them keep low inventories
Because Subaru models share many of the same parts, the Japanese automaker doesn’t need as many different microchips for each model helping them to keep a lower inventory of many parts.
What’s next for Subaru?
Subaru currently has a four-day supply of new vehicles in the U.S. and that includes those in transit to its retailers. Automotive News says the supply of new cars improved from December at both Honda and Mazda while staying flat at Toyota, Subaru, and Volvo.
With the microchip shortage and supply chain issues, Subaru was hit harder than other automakers. They need a new plan of action as the select and focused strategy is not working in the current global automotive environment.
Subaru shuts down its planet in Gunma, Japan on Friday, February 18, and Monday, February 21 because they don’t have the parts to build the refreshed 2022 Subaru Forester, hot-selling Crosstrek subcompact SUV, and other new models. Stay tuned.
It's not all bad news for Subaru. Check out Subaru Jumps 2 Spots To Claim Best Car Brand Title in 2022
You Might Also Like: The Top-10 Cars Of 2022 - CR Says Refreshed Subaru Forester Is the Best-In-Class
Denis Flierl has invested over 30 years in the automotive industry in a consulting role working with every major car brand. He is an accredited member of the Rocky Mountain Automotive Press. Check out Subaru Report where he covers all of the Japanese automaker's models. More stories can be found on the Torque News Subaru page. Follow Denis on Facebook, Twitter, and Instagram.
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Comments
A pandemic that occurs every
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A pandemic that occurs every hundred years has caused deaths, injuries, and supply shortages. Subaru, a relatively small manufacturer, although hit hard by supply shortages, is envied by many because they make products in high demand and will return to full production in about one year. Too many other manufacturers with products not in demand have much more difficult problems to solve. A recent Consumer Reports study of reliability, consumer satisfaction, road test scores, safety, etc ranked Subaru #1, and Lexus 5th. Remarkable because the higher the cost, the more money that can be devoted to customer satisfaction.
It’s not the shared parts or
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It’s not the shared parts or fewer models that’s affecting Subaru. Demand has dropped. Consumers no longer want ICE dinosaurs. Subaru did not take electrification seriously. Now, they’re paying the price.
I have an outback on order.
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I have an outback on order. Ordered December 23, 2021 with a 8 to 12 week delivery. Is this delivery real?
I know they'd never do this,
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I know they'd never do this, but Subaru should go back to the basics of what their cars used to be before everyone started making computers with wheels: relatively affordable, incredibly reliable, and quite capable vehicles that were fun to drive.
We have a 2020 Legacy, Love
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We have a 2020 Legacy, Love it . , Dec 2021 all war ing lights came and check engine light. Dealer said just drive it.. They kept it a day, said it was fixed. 3 mo.ths later. 44021. .Iles on car, Same thing. After 2 weeks in shop they gave me a loaner. Still not fixed, Been driving the loaner two weeks and the said it might be at least 2 more weeks. Still not sure what's wrong . Not real confidence in Subra services. Traded a Honda with 375000 miles on it. Was reliable a d so was service.
I don't see how Subaru
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I don't see how Subaru sacrificing their streamlined vehicle selection and switch to having 12 different models would somehow fix their supply issues. They don't have parts for the 5 models they got, the question would be why are they're getting more affected than the other brands. Do they have different suppliers that are failing, or are the same suppliers screwing them over to favor the Toyotas and Hondas? There's no question they'd sell cars if they had them.
Suppliers don't just screw
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In reply to I don't see how Subaru by Beliz (not verified)
Suppliers don't just screw over one customer in favor of another. The customers (which includes automakers) agree in advance buy up a certain amount of the chip production. And when the pandemic hit and vehicle sales went down, automakers reduced the amount of chips they were buying from the silicon manufacturers. Some gave up more than others in order to cut costs, which it seems like Subaru was one of those that gave up more. At the same time, computers and other home electronics went up in demand, so those companies bought up all of the chip supply that the automakers relinquished. Now, automakers want to make more vehicles, but the chips can't be made fast enough to supply everyone who wants them. Obviously, those that have them aren't going to give them up because they like making money. So that's what put Subaru in a tough spot at the moment. The only thing that will fix this is if demand goes down or silicon production goes up (but that takes years to get a new facility up and producing chips).
Currently looking at the
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Currently looking at the Volvo line of Wagons after buying 5 Outback’s over the years for my wife. The dealers were price gouging because they were not allowed to by Subaru corporation using the chip shortage as an excuse. Pathetic management at Subaru reeling in these dealerships.
No question about the price
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In reply to Currently looking at the by Howard Carswell (not verified)
No question about the price gougingAnd when this is over there will be a glut of 2022 vehiclesOn their Lots.Then they will have the 2023 to deal withAnd that's a whole new body style.And people would be less likelyTo buy the 2022 model
No question about the price
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In reply to Currently looking at the by Howard Carswell (not verified)
No question about the price gougingAnd when this is over there will be a glut of 2022 vehiclesOn their Lots.Then they will have the 2023 to deal withAnd that's a whole new body style.And people would be less likelyTo buy the 2022 model
I love how people use
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I love how people use whatever they don't like about Subaru, or the car industry in general, as the reason for Subaru's problems.
It's not a chip shortage problem, it's the CVT... or the ICE engine... Or the head gaskets...or due to tor horrific dealer in my area....
We purchased our 2020
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We purchased our 2020 Forester Touring in CA. It’s by far the best vehicle ever with 38K miles.
Prior to the Covid 19. Pandemic, required maintenance was performed in a good and professional manner. During high Covid and nowadays, it’s a much different story, maybe because we moved from CA to a great mid south state that has only one dealership which is 50 miles from home. Prior to Covid, the staff were all fantastic! But during high Covid case time, the dealer apparently lost good staff to our detriment. Replacement staff in the shop seem to not care what they were (trained?) to do. So, we now regret going to the dealership for required maintenance! However, our Forester is fun to drive, rides great, meets all our needs, and reacts and rides like new!
Subaru seems to be trying to hire good shop mechanics and other shop staff but don’t to be able to in some cases. Maybe Covid issues has been a big issue here. Time will tell?