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Subaru's fortunes sinking - can they turn it around?
Basically, back in 2002, Fuji Heavy Industries (FHI), the Japanese corporation that owns Subaru, set goals for sales and income increases it hoped to achieve at Subaru by March 31, 2007 (the fiscal end of a five-year period). it was also during this period that Subaru announced the goal of moving upmarket over the next few years to become more of a premium brand.
Instead, sales have stagnated and, worse yet, income has fallen sharply. Subaru accounts for 90% of FHI's global revenues (I had no idea it was that high). Subaru expects sales in North America to be about 201K this fiscal year, as opposed to its original goal of 250K. It is hoping that the launch of the new Tribeca will boost those numbers a little. But it cannot be a good sign that its most popular model, the Outback, was completely revised last fall, and yet sales have not increased but rather have remained flat. Other models (Forester and Impreza) are at the very end of their model cycles and will not be completely revised for more than a year.
As for income, SIA (the Subaru plant in Indiana) lost $74 million last year and is on target to lose more than twice that much this year. Meanwhile, GM waits in the wings, already owning 20% of the company and perhaps willing to take a more active role if it perceives the company is performing weakly.
Can Subaru turn it all around? I truly hope they are not selling rebadged Trailblazers in 2010.
2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)