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Subaru outlines growth plans

Future vision: Subaru’s Viziv 2 concept from this year’s Geneva motor show featured a diesel-electric powertrain, pointing to the company’s electrification plans.

Subaru plots mid-term growth with more SUVs and even bigger US focus on agenda

12 May 2014

SUBARU’S parent company Fuji Heavy Industries (FHI) has outlined a strategy to boost global production by 25 per cent by 2020 as part of a mid-term business plan called “Prominence 2020”.

The strategy, which will cement North America as Subaru’s “top priority”, encompasses a sharper focus on SUVs, the continuous rollout of new and revised models, increased production outside Japan and the potential for new synergies with Toyota.

Subaru says the plan will see it remain a relatively small global player, but also “a high-quality company with distinctive strengths”. The company’s aims include “enhancing the Subaru brand” and “building a strong business structure”.

Subaru is targeting an increase in global sales to 1.1 million units per year, a boost over the 825,000 units it shifted worldwide in the Japanese financial year to the end of March 2014.

Non-Japanese production is currently limited to the US, but FHI plans to boost production capacity outside its home market with global capacity set to hit 1.07 million units per year.

Subaru has made huge gains in the United States in recent years where it has been the only brand to boost its sales each year for the past six years, and the new plan will place even more emphasis on North America as its “top priority”, with the Japanese home market and China listed as other important regions.

The car-maker said that SUVs will be one major focus and that it plans to “continuously” launch new products.

While Subaru did not detail the new products it plans to launch, respected US publication Automotive News is reporting that the car-maker will introduce a modular platform called the Subaru Global Platform that will have the capacity to underpin a number of models from the Impreza to the larger Liberty and Outback mid-size twins.

The platform is likely to debut on the next-generation Impreza that is due later in the decade.

Another new model will likely be a seven-seat SUV to replace the US-built Tribeca that was discontinued in January this year following poor sales. Little is known about the new family-sized SUV but it is expected to debut at some point between 2016 and 2020 and be built in the US as well as Japan.

FHI currently builds the Toyota Camry at its Lafayette, Indiana plant alongside Subaru-branded models, but the company also announced that Toyota has requested a withdrawal of production from the facility in 2016.

Toyota has a 16.5 per cent stake in FHI, making it the largest shareholder, and the statement said the two companies will continue to collaborate on other projects and technology together.

Under the new plan, FHI will focus on areas including design with the aim of creating more distinctive vehicle designs under the “Dynamic and Solid” theme.

This could signal a move away from the boxy US-centric styling of its current models including the Liberty and Impreza.

Build quality and safety are also key areas of improvement, with the company aiming to become the number one brand for overall safety for both passengers and pedestrians.

FHI has also flagged its plans for EVs and hybrids by confirming that it will aim for “top-level” environmental performance for regular internal combustion engines, as well as electrification.

Subaru previewed this technology with its Viziv 2 concept at this year’s Geneva motor show that was powered by a 1.6-litre turbo-diesel plug-in hybrid. Further hybrid models are planned, possibly using Toyota technology, although timing for these are yet to be released.

The green focus will include a shift to direct injection for its petrol engines that will start with the next-generation boxer units, according to the report, but there is no indication of timing.

The plan will also see the company reduce overall operating costs by 20 per cent by 2020.

A new Liberty sedan is set to join the Subaru line-up early next year, with the mechanically related Outback crossover wagon joining it shortly after then.

Subaru’s Australian sales have remained steady so far in 2014, with 12,887 units shifted to the end of April compared to 12,982 in the same period last year.

While the Liberty and Outback have taken a hit in that period with a drop in sales of 58.5 and 30 per cent respectively, Impreza sales have lifted by 46.5 per cent, the WRX performance hero is also up, while the Tribeca has jumped by 80.7 per cent in run-out.

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