You probably have ever paid any consideration to the commercials on tv, or those that play earlier than movies on YouTube, you’ll know that it’s “love that makes a Subaru, a Subaru.”
Although it might sound foolish that it’s merely ‘love’ that drives the shopping for public to its showrooms, it’s resoundingly true that many individuals love their Subarus (FUJHY) for what it does for them.
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In accordance with new information from Client Reviews launched earlier this month, the constellation model is on the prime spot within the unbiased product testers’ annual checklist of the yr’s most dependable automakers, dethroning a years-long reign that noticed Toyota and its luxurious arm, Lexus, swapping locations on the prime two spots.
Such an achievement brings patrons to Subaru sellers. Nonetheless, with President-elect Donald J. Trump heading to a second time period on the Oval Workplace on January 20, the topic of tariffs has Subaru CEO rethinking his technique in its largest market.
Trump’s tariffs could hinder Subaru’s U.S. progress
As Subaru warns of a potential influence from tariffs underneath an incoming Trump administration, the formidable automaker is trying to intensely enhance its U.S. market share subsequent yr.
Subaru at the moment has a 4.2% market share throughout the larger U.S. auto trade, however its CEO, Atsushi Osaki, advised Tokyo reporters that he desires a strong 5% market share. The model identified for its symmetrical all-wheel-drive programs is on tempo to promote almost 670,000 vehicles within the U.S. this yr, a 6% enhance from 2023.
“First, we hope to realize an enormous goal of 5 p.c market share within the U.S.,” Osaki mentioned throughout a Dec. 18 roundtable with reporters at Subaru Corp.’s international headquarters in Tokyo. “If the general demand is 16 million items, 5% is 800,000 items. So, that could be a large goal for us.”
Subaru’s reliance on Japanese manufacturing could also be an issue
With a purpose to ship on that formidable quantity, Osaki and Subaru are tasked with maneuvering by means of the unsure atmosphere of right now’s auto trade, particularly rules relating to EVs.
Because the Chinese language home auto market strikes away from worldwide manufacturers, Subaru’s competitors is shifting extra consideration to the American market. Osaki notes that “Japanese, European, and U.S. carmakers are struggling within the Chinese language market,” leading to automakers “shifting their focus nearer to the U.S.”
“[…] we anticipate competitors to stay extraordinarily powerful subsequent yr,” Osaki mentioned.
One hurdle it should sort out is its auto manufacturing standing, which leaves it weak to potential tariffs — notably if Trump’s impulses have an effect on Japan.
America buys loads of Subarus, a lot in order that 70% of Subaru’s international gross sales are vehicles offered in the USA. Nevertheless, a way more worrying determine is that half of the metallic it shifts within the States comes from its factories in Japan.
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Trump has singled out Mexico, Canada, and China as targets of his new tariff coverage, however at the same time as Japanese imports appear unaffected by Trump’s insurance policies, Osaki shouldn’t be taking any probabilities.
“Tariffs on our exports from Japan have a big impact on us,” Osaki mentioned. “We’re contemplating potential measures to answer the proposed tariffs. One of many a number of choices we’re contemplating is to extend manufacturing capability on the Indiana plant within the U.S.”
Subaru’s Indiana plant, identified internally as Subaru of Indiana Automotive, or SIA, is its sole manufacturing facility within the States.
Initially constructed as a three way partnership with Izuzu, it at the moment has an annual capability of round 360,000 vehicles. Nevertheless, the Subaru CEO notes that it may possibly enhance that quantity by including further shifts after hours and on the weekends, although he didn’t say exactly how rather more it might squeeze out.
In accordance with information publicly obtainable on the SIA web site, over 6,000 associates work on 4 fashions on the sprawling Indiana plant: the Subaru Ascent SUV, the Legacy sedan, the Outback station wagon-styled crossover, and choose trim ranges of the Crosstrek compact crossover. In 2023, the plant produced 298,837 vehicles and is projected to supply 377,500 automobiles by the top of this yr.
Associated: Subaru is bidding farewell to a fan-favorite mannequin after 36 years
Subaru’s Indiana manufacturing facility can be getting some respiration room. Earlier this yr, the automaker introduced that 2025 would be the last mannequin yr for the Legacy midsize sedan, citing a shift in buyer preferences that prefers crossovers and SUVs over sedans.
“Although the Legacy is the longest-running Subaru mannequin line, its discontinuation displays market shifts from passenger vehicles to SUVs and crossovers and Subaru’s transition to electrified and absolutely electrical automobiles,” Subaru mentioned in a press release on the time.
In 2026, Osaki plans to convey manufacturing of its bestselling Forester crossover SUV to Indiana.
Subaru Corp. is traded on OTC markets as FUJHY and on the Tokyo Inventory Alternate underneath ticker quantity 7270.
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