SUBARU: Enhanced ADAS with New Generation EyeSight at core, and electrification with Toyota

FY2019 earnings and profit increased, but will slow in FY2020 due to U.S. market



EV "design study model" jointly developed with Toyota
(Source: Subaru)

  In January 2020, Subaru held a "Subaru Technology Briefing". The company's social responsibilities include efforts to achieve zero traffic fatalities by 2030 and contribute to the protection of the global environment. So far, the company has created its own technologies based on its "horizontally-opposed engine", "Symmetrical AWD" and its "Subaru Global Platform". In addition to these, Subaru announced the sophistication of its ADAS centered on its new generation EyeSight driver assist system and electrification plans.

  Regarding safety improvements aimed at achieving zero traffic fatalities by 2030, Subaru’s "New Generation EyeSight", "newly developed high-definition map and vehicle locator", and its " Subaru STARLINK" connected service will be launched in the Japanese market in the second half of 2020, all of which will be first equipped on the all-new Subaru Levorg.

  As one of its electrification initiatives, in addition to the e-BOXER mild hybrid sold in Japan and Europe, Subaru is engaged in combining its original technology and the THS (Toyota Hybrid System) to develop a Strong Hybrid vehicle. In addition, Subaru is developing a medium- and large-sized EV platform jointly with Toyota, and will launch a jointly developed crossover EV in the first half of the 2020s.

  In February 2020, Toyota increased its stake in Subaru to 20%, making it an equity-held affiliate. Subaru is deepening its collaboration with Toyota on electrification and the development of the next Subaru BRZ and the Toyota 86.

  According to its FY2019 financial results, Subaru was the only Japanese passenger car maker among the seven Japanese automakers to increase global sales volumes and achieve higher sale revenue and profit. The proportion of Subaru business in China, from where COVID-19 initially spread, is insignificant, and the impact of the pandemic on Subaru’s financials in its main market of the U.S. market wasn’t felt until the second half of March.

  Since March 2020, the U.S. has become the world’s most infected country with COVID-19, so Subaru suspended production at its plant in Indiana (SIA) from March 23 to May 8. In the U.S., it seems that the spread of the COVID-19 pandemic hit Subaru hard in the Snowbelt region of North America where Subaru’s market position is particularly strong. In the U.S., (retail) sales of Subaru vehicles fell by 47.1% in March and 46.5% in April, but decreased by only 18.7% in May.

  Subaru’s financial forecast for fiscal year 2020 is undecided.

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