Subaru Now Faces An “Uncertain Situation” With Its Select-Focused Strategy
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
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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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Photo credit: main image Cross Creek Subaru