Subaru running strong, one of two automakers in U.S. to see rise in sales

2010 Subaru Legacy

Subaru maker Fuji Heavy Industries is running strong after a sales jump of 1/5 this month in the U.S. market, but that is not to say that there is work is done. Fuji Heavy, owned in part by Toyota Motor Corp. enjoyed the distinction of being one of two automakers to see a rise in U.S. auto sales this year along with Hyundai/Kia, reports Automotive News.

CEO Ikuo Mori expects the trend to continue, as November’s sales soared by 20% over the same period last year. “Our revenue and profits are still low, however, and conditions are very tough. But my feeling is that things are gradually getting better,” said Mori.

Demand for the Legacy and Forester models, fueled by cash-for-clunkers, surpassed expectation and was the catalyst for a 13% U.S. sales growth over the first ten months of 2009. During the same period the overall market saw a decline of 26%.

Though on track to lower costs greatly, Mori is concerned with the value of the dollar. Subaru faces the Japanese market, notorious for its high fixed cost rate, but is slowly lowering it by about 10%. There is little else left for the small manufacturer to take advantage of, as its size makes manufacturing overseas impractical. Mori said that Fuji Heavy has no intention of manufacturing in America, though they share a manufacturing plant in Indiana that also produces the Camry. The next likely move will be to explore production options in China. They expect Chinese sales to jump 85% this year to 35,000 units, and expects global sales of 545,000 units for 2009 – 2010.

Mori acknowledged Fuji Heavy’s past mistakes of trying to re-brand as an upscale automaker. The plan now is lower selling prices and hold down incentives, and is enthusiastic for upcoming joint projects with Toyota.

– By: Stephen Calogera