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Niche is nice, says Subaru

2013-08-13 10:01

SUBARU ON A ROLL: Subaru is reporting positive sales since 2012, prompting debate about whether the automaker should shed its 'niche product' status and go mainstream. Image: ROBERT DANIELS

Profits and sales forecasts point towards a great financial year for Subaru with the automaker reporting an increase in vehicle sales since 2012.

The Japanese automaker, owned by Fuji Heavy industries, has benefited from the weakening yen and the launch of it BRZ sports car and Forester SUV. In fact both models have become so popular in the US that customers reportedly have to wait for months to receive one. According to the automaker, its BRZ has an eight-month waiting list.

According to the Detroit News, Subaru’s success has led to its president Yasuyuki Yoshinaga to consider whether the niche automaker of all-wheel-drive vehicles is “getting too big".


Yoshinaga said: “We’re standing at a major turning point for Subaru. It shouldn’t just be about volumes. We should be making cars that only Subaru can make, that are a little more expensive and more profitable than the competition. Some people in the company may want to make mass-market products or cheaper cars but is that really the right direction for Subaru?

"We’re not an automaker that can grow as big as Toyota and, even if we could, reaching that sort of scale would mean we’d stop being Subaru.”

Takaki Nakanishi, founder of Nakanishi Research Institute, believes Subaru is better off as a niche automaker. “That;s what it is - a niche product. It has a strong partner in Toyota, which is complementing Subaru’s product development so that it can focus its strategy on being a niche player.”

The automaker has a mid-term target of 850 000 units by March 2016 and estimates deliveries will reach a million by the end of 2020. Subaru may be speeding ahead of schedule as sales climbed 13% to 724 000 units through the first quarter of 2013.


The automaker is expanding and reportedly investing R3.9-billion to increase output at its factory in Indiana, USA, by 100 000 by the end of 2016, the DetNews added.

Part of its success can be attributed to luck. The company’s failure to win Chinese approval to build cars in that country became a blessing in 2012 after a territorial dispute over a group of uninhabited islands fuelled a wave of anti-Japanese protest across China. Subaru was largely immune to the backlash that led to Toyota, Nissan and Honda reporting drops in Chinese sales in 2012.

Then there’s the yen, which has weakened against every major currency since 2012. Fuji Heavy produced 75% of its vehicles in Japan and sold 80% of them globally - most of them in the US.

Yoshinaga commented:  “We haven’t raised incentives at all. We're not aiming at taking market share. I hate that Japanese cars are seen as a group and being attacked altogether. I hope there won’t be such unfair criticism.”
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