Subaru: FY2012 ends with record sales and net income

Vehicle sales in the US increase for fifth consecutive year



 Fuji Heavy Industries (FHI), the manufacturer of Subaru-branded vehicles, projects all-time records all around in FY2012 including the consolidated vehicle sales of 722,000 units, sales volume of 1,890 billion yen, operating income of 107 billion yen, and net income of 76 billion yen.

 In April 2008, FHI expanded its partnership with Toyota and Daihatsu for development and production while opting for a phased discontinuation of all mini vehicle development and production (the discontinuation plan was completed in February 2012). The company's ultimate aim was to concentrate on the development and production of highly value-added small- to medium-sized passenger cars by leveraging on its Boxer engine (horizontally-opposed engine), all-wheel drive, collision prevention, "EyeSight" and other unique technologies.

 The concentrated development has led to the launch of BRZ, facelifted Legacy, all-new Impreza XV and all-new Forester all in 2012. As a result, Subaru sales of non-mini vehicles in the Japanese market topped 100,000 units (108,000 units) for the first time in seven years since 2005, and also outnumbered the sales of mini cars (which sold 70,000 units). The company ascribes the steady increase of income to the brisk sales of highly profitable models and to high utilization rates of plants.

 (Note) The "mini car" is a unique category in Japan of vehicles with piston displacement of 660cc or less, overall length up to 3.4 meters or overall width up to 1.48 meters. The mini cars represent approximately one third of the Japanese automobile market because of tax privileges in addition to the low purchase price and ownership cost. However, their market is limited to Japan and the automakers are forced to settle for small margins.

 This report refers to all small- to larger-sized vehicles other than the mini cars as the "non-mini vehicles."

 FHI's model development efforts, primarily targeting the US market, proved to be successful. The company expects its US sales to increase continually for five years in a row to 336,000 units in 2012 and 365,000 units in 2013.

 FHI is facing difficulties in starting local production in China in FY2015 as originally planned. Nevertheless, the company is strengthening its sales structure there to import more vehicles and sell 100,000 units in FY2015.

 FHI is following a medium-term business plan "Motion-V" spanning from the fiscal 2011 to 2015 in which the company aspires to sell 850,000 vehicles globally in FY2015. FHI plans to increase sales especially in North America, China and other areas (Russia, Southeast Asia, etc.) after the US.

Progress of the "Motion-V" medium-term business plan for fiscal 2011-2015

Targeted income  FY2015: Consolidated operating income of 120 billion yen with 6% consolidated profit rate
Consolidated sales plan for FY2015 Planned  900,000 vehicles worldwide (including 350,000 units in the US, 180,000 in China)
Revised in May 2012  The plan was amended as local production in China starting before the end of the medium-term business plan has become implausible (original plan calls for producing 50,000 vehicles in 2013 and 150,000 in 2015). The plan was revised to 850,000 vehicles worldwide including 410,000 in North America (380,000 in the US) and 100,000 in China on the shipment basis (OEM and CKD inclusive).

FHI's consolidated unit sales by the area

(1,000 units)
FY2008 FY2009 FY2010 FY2011 FY2012

North America 207.1 249.8 307.1 308.6 389.8 410
China 26.2 48.9 62.4 48.3 50.2 100
Three regions total 272.3 243.6 247.5 248.3 245.4 270
Others 49.7 20.5 40.0 34.6 36.8 70
Worldwide 555.3 562.8 657.0 639.9 722.3 850
Source: FHI's financial statements
(Notes) 1. Russia is included in other areas.
2. More sales are expected in North America than planned (410,000 units in FY2015).

Related report: "Two million mini vehicles sales expected in Japan in 2012" (posted in December 2012)