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Subaru cuts annual profit outlook on strength of yen, typhoon impact

TOKYO — Subaru lowered its annual profit forecast on expectations of a stronger yen and the impact on production from a typhoon last month, driving its shares down as much as 4.5%. Japan's smallest major automaker, one fifth of which is owned by top-ranked Toyota, cut its forecast for operating profit to 220 billion yen ($2 billion) for the year ending March 2020, from a previous forecast of 260 billion yen. Subaru revised its forecast for the yen to average 107 versus the dollar over the period, from 110 previously. A stronger currency eats into profits because cars exported from Japan become more expensive and the value of earnings made overseas decreases. The United States is Subaru's biggest market, accounting for about 60% of overall sales. Typhoon Hagibis forced Subaru to halt production at its factories in Gumna, north of Tokyo, for more than a week in October due to supply chain disruptions. The stoppage, which lasted until Oct. 25, resulted in lost production of 11,000 vehicles, Chief Executive Officer Tomomi Nakamura told a briefing in Tokyo on Wednesday. Hagibis was the worst typhoon to hit Japan in decades, leaving at least 80 people dead, according to national broadcaster NHK. "We have restarted production, but we couldn't return to full capacity immediately," Nakamura said. "Some of our suppliers' factories were completely submerged." Subaru also said vehicle sales rose nearly 20% in the first half of the fiscal year compared with a year earlier, driven almost entirely by an improvement in the United States amid strong demand for the Forester SUV crossover. Subaru shares were down 1% at 3,102 yen by 0440 GMT, after touching a low of 2,995.5 yen earlier.

Subaru will cap sales, introduce US-only SUV and PHEV

With Subaru's meteoric growth over the past few years, it seems like the company would double down on the success and expand. However, the Japanese brand has announced that it will take the opposite approach. Rather than continually increasing global deliveries, the automaker will instead cap annual volume to between 1.03 million and 1.1 million units, according to Automotive News. While the strategy will keep Subaru's niche status, the brand's lineup certainly won't stagnate. After abundant rumors, a US-only, seven-seat crossover will eventually be assembled in Indiana, and Impreza production will reportedly move there in 2016. In addition, the company will launch a plug-in hybrid around 2018, but it'll only be sold where necessary to meet zero-emissions requirements. While the Japanese brand is widely known for crossovers and wagons, Subaru isn't forgetting its performance fans, either. Fuji Heavy Industries President Yasuyuki Yoshinaga confirmed yet again that a second-gen BRZ is under development. "We have already agreed with Toyota we will do a full model change. We have not decided when it will be introduced," he said to Automotive News. Subaru has been considering whether to grow for years, but the planning eventually favored maximizing the current factories. For example, Subaru decided not to build a plant in China but has chosen to boost capacity at the line in Lafayette, IN. Yoshinaga sees the strategy as a way to maintain the brand's soul. "Many companies try to be bigger or sell more vehicles. If Subaru does the same thing, we will lose our characteristics," he said to Automotive News. Related Video:

2015 Subaru Outback offers more room and better econ behind that new face

While its new front fascia makes the biggest obvious impact, Subaru says changes to the entire 2015 Outback package make it roomier, more powerful, more efficient and quieter. The hexagonal grille gets it in line with the corporate template, to go along with a new shape to the lower grille and fog light cladding, a sharp crease for a shoulder line and a faster rake to the windshield. The rocker panel cladding and its 'toothed' molding remain, but it now also doubles as a step for when you want to place items on the roof rack.
Under the aluminum hood will either be a 2.5-liter, four-cylinder boxer engine with 175 horsepower and a carryover 174 pound-feet of torque, or a 3.6-liter inline-six-cylinder with 256 hp and 247 lb-ft exclusively in the 3.6R Limited model. Paired to the lower-friction Lineartronic CVT that is the only shifting choice, and aided by features like the active grille shutter system and electric power steering, Subaru estimates fuel economy for the four-cylinder at 25 miles per gallon city, 33 highway and 28 combined, an increase of 1/3/2 mpg over the outgoing car. The sixer is pegged at 19 city, 27 highway and 22 combined, an increase of 2 mpg across the board.
The Outback has grown in every dimension, but never by more than 0.7 of an inch. The passenger cabin grows by 2.7 cubic feet, though, so occupants have more shoulder, hip, elbow and legroom. The cargo hold is enlarged by 1.2 cu-ft with the rear seats up, by 2.0 cu-ft with them down and the load floor is flatter. Accessing it is made easier by the memory height function on the power tailgate and new release handles for the rear thrones. Cabin ambiance is improved by sound abatement measures like an acoustic windshield, thicker panels and more noise-insulating foam.