Tom Doll Transformed Subaru Into a Loyal Band of Followers, “The Original Subaru Owners Wanted To Sell Motor Scooters, They Weren’t Interested In Cars”

Tom Doll, the mastermind behind one of America's greatest success stories, was the CEO of Subaru of America. He is the architect who transformed a small Japanese scooter company into an automotive giant. Here is Tom's fascinating story.

All they wanted to do was sell motor scooters. 

That's what Tom Doll said in an interview with the Car Dealership Guy. Tom Doll single-handedly transformed Subaru, a small Japanese automaker in America into one of the most recognized and loved car brands. Before I get into his intriguing story, here are a few of his accomplishments.

• 11 years of consecutive sales growth
• A record of 700,117 vehicle sales in 2019
• Helped implement the Share the Love Event
• Pushed Subaru to become "More Than a Car Company"
• Brought the Subaru Ascent to U.S. customers
• Influential in bringing the Wilderness sub-brand

Doll received the "Legacy of Disruption" honor in March at the third annual Newsweek World's Greatest Auto Disruptors Awards. You can read my report here. 

Dev Prasad, CEO of Newsweek, said, "These visionary executives and companies are elevating standards, positively affecting the lives of consumers. We take pride in recognizing their remarkable contributions."

Let's take a jump back 40 years when Doll took over a struggling company called Subaru. The parent company of Subaru was called Fiji Heavy Industries. 

Doll is asked, What was Subaru's perception when you started 40 years ago?

Harvey Lamb and Malcolm Bricklin (who owned Subaru in the U.S.) essentially really wanted to sell a motor scooter, this Rabbit motor scooter that they happened to see when they were visiting Japan, and as a result of that, they really weren't interested in the car business per se. 

In 1967, Built under the Fuji Heavy Industries name, the Rabbit S-1 scooter started production in June 1946, even predating Vespa. 

However, the Japanese wanted them to sell the Subaru 360 instead of the Rabbit motor scooter, and that's how the whole company started.

In 1968, Subaru introduced the 360 as an inexpensive yet distinctive economy car. It was "Cheap and Ugly" and powered by a two-stroke engine. The Subaru 360 claimed 66.3 mpg and sold for $1,297. It was $300 cheaper than the VW Beetle and was 1000 lbs. lighter.

Subaru was tremendously successful when I got there in the early part of the 80s, and it stayed that way until about 1986 or 1987, and then we went into a slide. We can talk about it now because anyone who thinks of Subaru thinks we have always been successful. 

But we were an underdog, and it was considered unrealistic for a new automaker to emerge as a leader. If you look today at where brand loyalty is, I want to say at all-time lows, if not all-time lows, you know, multi-decade lows, right? It's an excellent time to be a new brand in our market, at least how I see it. 

What was your perspective on the market when you took over as CEO of Subaru of America? 

I came in 1982. The company was started in 1968, and during the late 60s and early part of the 70s, the company almost went out of business because we were selling a car called the 360 at the time, and Ralph Nader had rated it unsafe. 

So the company struggled, and what saved the company was the first Arab oil embargo in 1974, I believe it was. After that, the fuel efficiency of Japanese cars, obviously with gas prices being what they were at the time, created this huge demand for not just Subaru but Toyota and Honda. That's when Nissan and the Japanese really got a foothold in the US market.

And then, through the late 70 through the mid-'70s and the late 70s and the early part of the 80s, the company was growing like crazy, so when I got there in 1982, the company sold about 150,000 vehicles a year.

But, we were subject to what was called the voluntary restraint agreement. There was an agreement between the United States and Japan to limit the number of cars we could bring into the United States because we were a pure importer then, but the market opportunity then was unbelievable. Because of how it started, the company wasn't professionally managed.

How were you able to achieve such success within specific markets?

I talk about this tongue-in-cheek, but when you think of it, how did we achieve such crazy market penetration in the Pacific Northwest in New England? It's because Subaru knows its customers very, very well. 

Our market penetration is so deep within specific segments of audiences because it was something the company deliberately did. 

When I got to the company in 1982, we were a niche brand, so essentially, the strong markets for us were the Northeast from Washington DC north to Vermont. The Pacific Northwest was even more prominent, from San Francisco to Seattle. And the Rocky Mountain States are significant markets.

They probably never heard of Subaru anywhere else. We had retailers in various parts of the country, but they weren't selling any volume. By the time we got to the late 80s and early part of the 1990s, we knew we had to grow. We couldn't stay at 150,000 vehicles a year.

Our market share was small. The U.S. car market had 11 or 14 million vehicles in that sales range. We were too small, so we had to be able to grow. We had to entice retailer operators to take our brand on, and the only way they could do that was if they were selling some meaningful volume.

We were only selling 150,000 vehicles. Our retailers only sold 300 to 330 cars per year. You can't generate the earnings or cash flow necessary to support a franchise in the way that we needed it to be supported, so it was intentional from the early part of the 2000s forward for us to first get to 250,000 vehicles.

Then we grew from 250,000 to 350,000 to 500,000 to 600,000 to 700,000. We would have done much better than the 700,000 when we peaked in 2019, but then, because of COVID, it changed everything. 

My personal goal was to get a 5% U.S. market share or somewhere between 800,000 and 850,000 vehicle sales before I retired in 2023. 

But now, leaving that to the next generation of management, they're going on to take over that responsibility, but the fact of the matter is the franchise is in good shape right now, and to your point, people know that it's in very good shape. 

Our customers know what Subaru stands for from the marketing and experience they get when they visit a Subaru retailer. It's all there for them, so we have our retailers to thank and all of us at the company working so hard to put us into this position. 

Stay tuned for Part 2: Tom Doll Transformed Subaru Into a Loyal Band of Followers, "We Asked, How Can We Be Different? What We Did Is We Asked Our Owners"

I am Denis Flierl, a Senior Torque News Reporter since 2012. My 30+ year tenure in the automotive industry, initially in a consulting role with every major car brand and later as a freelance journalist test-driving new vehicles, has equipped me with a wealth of knowledge. I specialize in reporting the latest automotive news and providing expert analysis on Subaru, which you'll find here, ensuring that you, as a reader, are always well-informed and up-to-date. Follow me on my X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.

Photo credit: Denis Flierl via Subaru