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Subaru puts China production on hold amidst slowing growth

Subaru's 2015 sales and production forecast estimates the Japanese brand to sell about 60,000 vehicles in China this year, a 10 percent rise. However, a recent decision not to build a factory there might make future growth more difficult. Given the changing state of the market, the automaker doesn't seem concerned by the potentially lost sales. According to Bloomberg, even if the Chinese government gave permission for Subaru to build its planned joint venture factory with Chery, the Japanese brand would not take advantage of it. "Since the profits are split with your partner, you would have to double the sales to maintain the profits you earn by exporting from Japan," said Akira Mabuchi, the company's executive in charge of China, according to Bloomberg. Subaru is in the odd position of being the only major Japanese automaker without a joint venture partner to build cars in China, but the massive year-over-year growth there seems to be slowing. Auto sales in China were up 6.9 percent in 2014, according to Bloomberg, compared to 14 percent in 2013. Also, Chinese consumers have been famously averse to buying Japanese vehicles with only half of the consumers there even willing to purchase one. Instead, the company is focusing on the US market, according to Bloomberg. The decision makes sense. While Subie's sales in China shrunk 2 percent in 2014 to about 55,000 vehicles, the company grew 21 percent in the US to 514,000 units. The automaker already has plans to add capacity to its factory in Indiana. News Source: BloombergImage Credit: Jae C. Hong / AP Photo Plants/Manufacturing Subaru

Subaru posts 15.7% rise in fill-year operating profit

TOKYO — Subaru on Monday posted a 15.7% rise in annual operating profit in the fiscal year that ended in March as it recovered from a raft of product recalls last year, but warned that sales of its cars would take a hit from the coronavirus outbreak. Profit rose to 210.3 billion yen ($1.96 billion) for the year just ended, from 181.7 billion yen a year earlier under international financial reporting standards. It exceeded a consensus estimate of 204.7 billion yen profit drawn from 17 analysts polled by Refinitiv. Global automakers are struggling to recover from the coronavirus, which has pummeled car sales as shelter-in-place orders in many countries clobbered car demand, while plant workers had been left unable to commute to work. Though Subaru and its rivals have begun to restart vehicle factories, anaemic demand, supply chain disruption and social distancing measures at factories are expected to limit output in the coming months. "We saw a limited impact of the coronavirus on our results for the year just ended," Chief Executive Tomomi Nakamura told a teleconference. "But although we have resumed production this month, we are only operating one shift in Japan, and the pace of U.S. output has slowed significantly ... we see many uncertainties related to the virus." As a result, the maker of the Outback and Forester SUV crossovers declined to give an earnings forecast for the current business year, while it slashed its year-end dividend for the year just ended by 61% to 28 yen per share. Some analysts believe industry-wide global auto sales could slump by a third this year and that any recovery will be slow and patchy as job losses and reduced incomes weigh on consumer spending. Subaru, which earns two-thirds of its vehicle sales from the United States, acknowledged that it may take a hit in the coming months as its biggest market struggles get the coronavirus pandemic under control. The automaker saw a 3% rise in global vehicle sales in the year to March to 1.03 million units, bouncing back from last year, when a defective steering component and measures to improve inspection tests had stopped output for two weeks at its sole assembly plant in Japan. The process to restart its U.S. plants would take time, Subaru said, and it expects to produce only around 5,000 units this month, a fraction of last year's 40,000. The virus would result in a global production hit of around 150,000 units, it added.

2016 Subaru WRX makes IIHS TSP+ fun

We write about boring, utilitarian compacts being named to the Insurance Institute for Highway Safety's Top Safety Pick+ list pretty regularly. Today, we've got yet another fun car to add to the tally – the Subaru WRX. Thanks to the inclusion of the company's impressive EyeSight active safety system, the WRX was able to score a "Superior" rating on IIHS' frontal crash prevention test, which is the highest score possible. Vehicles are required to score at least an "Advanced" rating to earn the TSP+ mark. In addition to the active safety system, TSP+ vehicles must also record "Good" ratings across the four basic crash tests – front, side, rear, and rollover – and a "Good" or "Acceptable" rating the small-overlap crash test. Of course, Subaru is no stranger to IIHS' biggest honor – the Legacy and Outback were named Top Safety Pick + vehicles in April 2014. We're still scouring the Internet for the actual crash test video from IIHS. Once we uncover it, we'll update this post. Until then, scroll down for the official press release from Subaru. 2016 Subaru WRX Awarded IIHS' Highest Standard of Safety "2015 TOP SAFETY PICK (TSP) +" ? "EyeSight" achieved the highest possible rating of "Superior" for front crash prevention. ? Seven models have earned 2015 safety awards from IIHS. Tokyo, September 14, 2015 - Fuji Heavy Industries Ltd. (FHI), the manufacturer of Subaru automobiles, today announced that the Insurance Institute for Highway Safety (IIHS; a nonprofit organization supported by auto insurers in the US) has awarded the highest standard of safety, 2015 TOP SAFETY PICK+ (TSP+) along with the highest possible rating of "Superior" for front crash prevention to the 2016 Subaru WRX (US specs.), equipped with Subaru's EyeSight* driver assist technology. By adopting the EyeSight for 2016 model, WRX earned 6 of 6 points for front crash prevention. Including 2016 Subaru WRX, Subaru has seven models that have earned 2015 safety awards from IIHS - six with TOP SAFETY PICK+ and one with TOP SAFETY PICK. The EyeSight was the first system ever to use only stereo camera technology to detect the objects such as vehicles, pedestrians and cyclists. Since its Japanese debut in May 2008, features available on this system have been highly praised; they included pre-collision braking control and all-speed range adaptive cruise control tracking function.