Menu

Subaru Plants Make Record Progress But Company is Playing It Safe

subaruDespite making stellar gains in sales and production, Subaru is playing it safe with its annual projections.

According to WardsAuto.com, an online auto industry newspaper, Subaru hopes to increase its U.S. sales by 5% in 2015, which would amount to a total of 540,000 sales. Subaru also intends on extending its capacity at its Lafayette, IN plant.

Though Subaru is currently working on expansion, the Lafayette plant has already produced an impressive number of cars. In 2013, the plant manufactured 266,166 cars. The following year, it produced 286,498 cars, a record number and a 7.6% increase from 2013. By 2016, Subaru hopes to increase Lafayette’s production to 400,000.

The demand is certainly there. Subaru sold 513,693 cars in the U.S. in 2014, a 21% increase from its 2013 sales. Models like the Outback and WRX are particularly popular.

“[The Outback has] the lowest days’ supply,” said Subaru of America President Tom Doll. “We only have an 8 days’ supply, so essentially it’s sold out.” The Outback sold 138,790 units in 2014, up by 17.6% from the previous year.

Doll touched on Subaru’s main problem in the U.S. market: it cannot keep up with the demand. Fuji Heavy Industries, Subaru’s parent company, had to cut production of certain models, such as the Impreza compact, because of its inability to manufacture enough cars in time. Though Doll expressed disappointment in receding sales of certain models (such as the Impreza, the sales of which dropped by 20.2% in 2014), he remained confident in Subaru’s ultimate production capabilities and claims that dealers across the country are “clamoring for” the Impreza.

“Our sales were up 14%, so we agree with the overall numbers of what’s been estimated. Subaru is a conservative company and often underestimate all their sales figures,” said Shane Romee, customer satisfaction direction for Hudiburg Subaru. “This is the fifth year straight for their sales increases, many of which sales are attributed to the Outback and Forester.”

Some of Subaru’s models such as the Impreza, XV Crosstrek, and Forester are still assembled in Japan. Subaru of America hopes to start the assembly of Imprezas in Lafayette by next year. It also intends on building replacements for its Tribeca 3-row CUV “subcompact” models, though Doll expressed skepticism about its success, due to falling oil prices in the U.S. and a general lack of demand for the model.

Regardless, Subaru’s impressive output and high demand for most of its models makes Doll and other Subaru officials optimistic about Subaru’s continuing record profits. And once the expansions are complete in Lafayette, there will be even more cars to sell and talk about.



Investors Chronicle