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Subaru profit climbs 48% on strong crossover sales in first quarter

TOKYO — Subaru reported a 48% increase in first-quarter operating profit on Monday as global sales grew, led by demand for the Ascent and Forester SUVs in the United States. The smallest of Japan's major automakers posted an operating income of 92.2 billion yen ($870 million) for April-June, versus 62.1 billion yen a year earlier and an average estimate of 65.6 billion yen from eight analysts polled by Refinitiv. Sales in the United States, by far Subaru's biggest market, rose 20%. It accounts for about 60% of Subaru's overall sales. The maker of Legacy sedans and Forester SUV crossovers maintained its forecast for operating income at 260 billion yen for the year to March 2020, up 45% from a year earlier. The previous fiscal year was marred by a string of recalls, production stoppages and inspection improprieties that cut the automaker's earnings in half. Subaru reiterated its annual forecast for global sales of 1.06 million vehicles. It also left unchanged its assumption that the yen will average 110 against the dollar over the course of the fiscal year, versus 111 last year. A stronger currency eats into profits because cars exported from Japan become more expensive and the value of earnings made overseas decreases.

Subaru to stop building Camry for Toyota in the US

It was back in 2007 that Subaru of Indiana Automotive, under contract from Subaru minority shareholder Toyota, built the first Toyota Camry at its plant in Lafayette, Indiana. Rumblings of the end of that contract work have been around for a while, as Subaru talked of expanding capacity to build more units and add a line for the Impreza, and Toyota talked of moving Camry production to its Georgetown, KY plant. The news was official internally last November when SIA Executive Vice President Tom Easterday told the Louisville Courier-Journal that Camry production would end. Now, Automotive News reports that both automakers have admitted publicly that the end will come in 2016.
SIA currently has a 170,000-unit capacity devoted to the home-brand Legacy and Outback models, while a $400-million expansion increases that to 300,000 units to prepare the facility for Impreza production in two years. Freeing up the 100,000 units of production devoted to the Camry means a 400,000-unit capability, which is far more than Subaru needs at the moment, but the Toyota exit will allow it to expand any way it sees fit. Subaru has said it will absorb the workers on the Camry line and no jobs will be lost, the mayor of Lafayette saying the development could change the timetable for the expansion.

2015 Subaru Legacy prototype caught testing in Michigan

The current Subaru Legacy is only three years old, but compared to rival midsize sedans like the Mazda6 and Ford Fusion, which have recently received thorough redesigns, it might as well be a million. In other words, a reworking is in order. Caught in these spy shots, the 2015 Subaru Legacy appears to be about the same size as the current model, but it appears that Subaru is looking to push the sedan a little more upmarket in terms of styling and luxury.
Despite the heavy camouflage, some elements of the new Legacy's design are still visible. The new headlights still have a scalloped shape but are much narrower, and we can also see the deep body creases that run the full length of the sedan. At the rear of the new Legacy, the taillights should get some added depth with a C-shaped brake light design similar to what we saw on the WRX Concept earlier in the year.
Showing that Subaru is aiming a little bit higher for this Legacy, this car is being benchmarked against all-wheel-drive luxury vehicles like the current Infiniti G37 and the Audi Allroad - the latter is likely for comparison with the Legacy's wagon version, the Outback. Following the XV Crosstrek Hybrid, we expect the 2015 Legacy to be the next Subaru product to get a gasoline-electric hybrid powertrain, which we hear will be paired with a turbocharged four-cylinder engine, a CVT and, of course, all-wheel drive.