Subaru (Part 2): Consolidation to a single platform in 2016

New EyeSight System debuting in 2014; radar-based safety systems available in U.S.

2014/07/08

Summary

 This second report on Fuji Heavy Industries Ltd. (FHI), the manufacturer of Subaru automobiles, describes the company's model plans, EyeSight System and other safety features, as well as plans for the U.S., its largest market in the world.

 In 2014, FHI will launch the all-new Outback and Legacy initially in the United States. In June 2014, FHI released the Levorg for sale in Japan as the successor to the Legacy Touring Wagon.

 FHI plans to reduce the number of platforms from two to only one to increase the efficiency of development and production. The models to be launched in 2016 will start to feature the new common platform.

 As for safety features, the vehicles released in 2014 are fitted with the third-generation EyeSight System. In addition to the EyeSight, radar-based safety devices are available on U.S.-specification models.

 FHI's powertrain enhancement plans include expanded use of direct-injection engines (eventually on all vehicles) and the introduction of the cylinder-on-demand and lean combustion technologies. With regard to electrified vehicles, FHI has announced plans to launch plug-in hybrid (PHVs) and all-new hybrid vehicles (HVs) with higher fuel efficiency than the existing models.

Subaru Levorg
Subaru Levorg launched in June 2014
Subaru Levorg
Side view of Subaru Levorg


Related: reports:
Subaru (Part 1): Global sales target of over 1.1 million units in 2020 (July 2014)
Subaru: FY2012 ends with record sales and net income (April 2013)



Model plans: Introducing newly-designed platform in 2016

 FHI is entirely refreshing the Legacy Series models in 2014. In Japan, the company launched the Levorg, a successor to the Touring Wagon.

 FHI currently has two platforms, one on which the Legacy and the Outback are built, and the other shared among the Impreza, Forrester and a few other models. The company plans to consolidate them and introduce a newly-designed platform called Subaru Global Platform (SGP) in 2016 at the earliest. The SGP will provide higher collision safety and dynamic performances along with a larger cabin space.

 FHI is aware of a strong request for compact cars from dealerships both in and outside Japan, but FHI has no plans to fulfill the request. FHI has achieved the present high profitability by focusing on specific markets and models. Hence, FHI is shying away from developing compact cars for emerging markets that will face direct competition with leading automakers.

FHI: Model plans for 2014 to 2018

Levorg June 2014
(launched
in Japan)
 FHI ended accepting orders for the current Legacy series models in Japan at the end of June 2014. The next Legacy series will come in two types, the B4 sedan and the Outback. The Touring Wagon will be discontinued and replaced by the Levorg. The Levorg was developed as a vehicle that delivers the pleasure of a sports car and the utility of a station wagon.
 The 5th- and 6th-generation Legacy were given a large size in favor of the customers in North America. The Levorg is designed with the Japanese market in mind and comes with the same overall length and height as the 4th-generation Legacy. It has the same overall width of 1780mm as does the 5th-generation Legacy.
 The Levorg is powered by a newly-developed 1.6-liter direct-injection turbocharged engine or a 2.0-liter direct-injection turbocharged engine. About 80% of the Levorg sold is expected to be powered by the 1.6-liter engine. All Levorg variants are with the all-wheel drive (AWD) layouts. The third-generation EyeSight System is available and is opted for by 99% of the pre-sales customers.

(Note) The next Legacy models, the B4 and Outback, will be unveiled within 2014.

New Outback July 2014
(launched in
North America)
 In April 2014, FHI unveiled the U.S. version of the all-new Outback at the New York International Auto Show. It will reach market in July. The new Outback has been developed in continued pursuit of the concept that runs across all generations of the Outback; the ride quality of a passenger car, the maneuverability of an SUV, and utility of a station wagon.
 The New Outback is powered by a 2.5-liter horizontally-opposed 4-cylinder DOHC naturally-aspirated (NA) engine or a 3.6-liter horizontally-opposed 6-cylinder DOHC NA engine mated with Lineartronic with 6-speed manual mode. It is fitted with the 3rd-generation EyeSight System and other safety features. All variants other than the low-priced 2.5i package are with the AWD layouts.
 The AWD control offers X-mode that enhances driving performance on bad road conditions. When driving on an icy surface, the X-mode switch will integrate control of the engine, transmission, AWD and Vehicle Dynamics Control (VDC). This provides optimized control over the wheel traction and braking for easier escape from the situation.
New Legacy Summer 2014
(launched in
North America)
 In February 2014, FHI unveiled the U.S. version of the all-new Legacy at the Chicago Auto Show. It will reach market in the summer of 2014. The New Legacy was developed with the concept of "fusion of design and engineering at a high level."
 The New Legacy is powered by a 2.5-liter horizontally-opposed 4-cylinder DOHC NA engine or a 3.6-liter horizontally-opposed 6-cylinder DOHC NA engine mated with Lineartronic with 6-speed manual mode. It is fitted with the 3rd-generation EyeSight System and other safety features. All variants other than the low-priced 2.5i package are with the AWD layouts.
 In 2013, FHI produced 125,554 units of the Outback and 40,800 units of the Legacy in the U.S. The company plans to produce 60,000 units of the Legacy in 2014. FHI believes the New Legacy will have a more prominent presence than ever in the highly competitive midsize sedan market.
7-seater SUV 2016-2020  In response to a strong request among U.S. dealers, FHI will develop a 7-seater SUV that will replace the poor-selling Tribeca. The new SUV will be based on the Exiga that is sold in Japan and will be produced most likely in the U.S.
FHI: Electrification plans
Plug-in Hybrid
(PHV)
2017
(in the U.S.)
 Starting in 2018, major automakers will be subject to the "zero-emissions regulations" enforced by the State of California. FHI will launch plug-in hybrids to meet the regulations with technical assistance provided by Toyota.
 The State of California demands all automakers that 15.4% of their vehicles sold in 2025 model year will be zero-emissions vehicles (electric, fuel cell, and plug-in hybrid vehicles). The similar regulations are likely to be introduced in ten other states.
Next-generation
Hybrid Vehicle
-2018  The XV Crosstrek Hybrid was developed entirely by FHI and released for sale in the U.S. in the fall of 2013. Sporty driving performance is the top priority and its fuel efficiency is no higher than 33 mpg highway, 29 mpg city. To meet the increasingly tighter mileage requirements in the U.S., FHI will launch HVs of better fuel efficiency with technical assistance provided by Toyota.
 The Subaru XV Hybrid that was launched in Japan in June 2013 has fuel efficiency of 20km/liter JC08 test mode.

 

 



Third-generation EyeSight arrives in Japan and U.S. in 2014

 In October 2013, FHI announced the new (third-generation) EyeSight System. It is fitted in the new station wagon, Levorg, which was released in June 2014 in Japan. It will also be mounted on the all-new Outback and Legacy to be launched in North America in summer 2014.

 The models to be released in the U.S. will feature radar sensors on both sides and the rear. They will provide Blind Spot Detection (BSD) and other visibility support for the driver.

 The third-generation EyeSight System features lane keeping assist and other new functions that are closer to the realm of "autonomous driving" than ever. FHI is working toward the commercial introduction of autonomous driving by 2020 assuming that the driver will be held responsible. FHI regards the EyeSight as the first step to that goal.

 The price of the new EyeSight System in Japan is kept low at JPY 100,000 without tax, the same price as the previous system. The EyeSight Systems are used in approximately 80% of Subaru vehicles in Japan. This suggests that the affordability of the EyeSight System is one of the factors behind the brisk sales of Subaru vehicles.

New functions of the third-generation EyeSight System

The third-generation EyeSight System has two stereo color cameras that deliver approximately 40% wider and longer detection range. With the longer range, improved accuracy of detection and the ability to detect brake light and red traffic signal ahead, the new system offers higher levels of crash avoidance, collision damage mitigation and driver assistance performances. The addition of a steering control also delivers higher safety performance as well as further driver assistance.
Lane Keeping Assist New   The system functions when driving at approximately over 65km/h with Adaptive Cruise Control activated on a road with distinctive lane markings. It will automatically steer the vehicle to keep it in the middle of the lane. This significantly reduces the burden on the driver.
Lane Departure Prevention Assist New  The system functions when driving at approximately over 65km/h on highways and the vehicle is straying from the lane. It will display and sound lane departure warning and apply torque to the steering wheel to correct steering back to the center of the lane and suppress lane deviation.
Pre-collision Braking Control Improved  The relative speed needed for automatic braking to avoid collision or mitigate damage has been increased from 19 mph to 30mph.
Adaptive Cruise Control Improved  The improved performance of the stereo camera leads to a more responsive acceleration and deceleration to another vehicle up ahead. It also improves adaptive cornering performance.
New  Brake lights of the leading vehicle can be detected with color recognition by the stereo cameras. This function is linked to Adaptive Cruise Control and allows even quicker deceleration when following another vehicle.
Pre-Collision Reverse Throttle Management New  When sudden input is detected on the accelerator pedal while in reverse, or when unusually high backing speed is detected, the system displays and sounds a warning and overrides the throttle to limit the engine output and restrict abrupt backing.
Hazard Avoidance Assist New  When the system detects an impending collision with another car or an obstacle ahead, the integrated control technology of the VDC assists the driver's steering to avoid collision.

 

Radar-based safety systems available on the U.S. versions of all-new Outback and Legacy released in 2014

 In addition to the third-generation EyeSight System features, Rear and Side Visibility Support and Steering Responsive Fog (SRF) Lights are available starting with the all-new Outback and Legacy which will be released in the U.S. in 2014.
Rear and Side Visibility Support
Blind Spot Detection (BSD)  The BSD will light up LEDs in the side mirror to alert the driver to vehicles in the blind spots behind C- and D-pillars.
Lane Change Assist (LCA)  If the driver turns on the indicator to change lanes while another vehicle is approaching in an adjacent lane, the LCA will flash the LEDs in the side mirror to warn the driver.
Rear Cross Traffic Alert (RCTA)  When the vehicle backs up, and if the system detects a vehicle approaching from a side, the RCTA will give a visual and audible warning to the driver.
Steering Responsive Fog (SRF) Lamps
 The SRF automatically turns on the fog lamp on the appropriate side during cornering to increase visibility at night. In view of oncoming vehicles, the SRF lamps can be turned on and off by detecting the steering angle and driving speed.

 

 



Expected to renew sales records in U.S. in 2014 for six consecutive years

 FHI has been renewing its sales records of the Subaru vehicles in the U.S. for five consecutive years. They sold 196,641 units in the first five months (January to May) of 2014, up 18.9% year-over-year. FHI forecasts that it will renew sales record in the full year 2014 for six years in a row.

 According to FHI's new management vision, Prominence 2020, the company aspires to boost North American sales from 478,000 units in FY 2013 to 600,000 units in 2020.

 The sales expansion in the recent years owes to the increased imports of the Impreza, Forester and XV Crosstrek. They accounted for 262,000 units (62% of U.S. sales) in 2013. FHI plans to increase U.S. production capacity from 170,000 units in 2013 to 310,000 units in 2016 to reduce foreign exchange sensitivity.

 The recent sudden sales expansion may lead to lack of necessary service capacity on the part of dealerships in the United States. FHI will assist them in expanding their services.

Unit Sales by model in the U.S.

2009 2010 2011 2012 2013 Jan.-May
2013
Jan.-May
2014
Impreza 46,611 36,072 27,391 68,175 58,856 24,343 25,822
Impreza WRX 8,323 13,805 13,624 17,969 7,856 11,170
Legacy 64,997 38,725 42,401 47,127 42,291 19,045 14,723
Outback 21,333 93,148 104,405 117,553 118,049 49,101 51,230
BRZ 0 4,144 8,587 3,279 3,738
Passenger car 132,941 176,268 188,002 250,623 245,752 103,624 106,683
Tribeca 5,930 2,472 2,791 2,075 1,598 722 544
Forester 77,781 85,080 76,196 76,347 123,592 40,578 61,083
XV Crosstrek 7,396 53,741 20,438 28,331
Light truck 83,711 87,552 78,987 85,818 178,931 61,738 89,958
Total U.S. 216,652 263,820 266,989 336,441 424,683 165,362 196,641
made in U.S. 92,260 134,345 149,597 166,755 161,938 68,868 66,497
imported 124,392 129,475 117,392 169,686 262,745 96,494 130,144

Source: Automotive News

 

FHI to enhance service capacities of U.S. dealerships

 The sales of Subaru vehicles in the U.S. rose sharply by 59% from 266,989 units in 2011 to 424,683 units in 2013. FHI will slow down its U.S. sales expansion to a single-digit rate and strive to enhance service capacities of its U.S. dealerships.FHI is concerned that the sudden growth in sales may lead to failure to keep up with the number of vehicles coming in for service. This might even lead to a lost trust among its customers.
 In November 2013, FHI announced the Fixed Operations Expansion program aimed at assisting U.S. dealerships. It offers financial aid in increasing their service bays and the number of lifts, etc. FHI plans to increase their service capacity by 70% in four years.
 There are 621 Subaru dealerships in the U.S. as of May 2014. FHI replaced nearly a quarter of them in the past few years in an effort to strengthen overall sales capacities. FHI will maintain the current number of dealerships. On average, each store sells 700 to 800 vehicles a year. FHI plans to support each dealership to constantly sell 1,000 units a year.

Source: Nikkei Sangyo Newspaper May 28, 2014, Automotive News Nov. 18, 2013/Jan. 20, 2014/Jan. 27, 2014.

 

 



Achieves retail sales at 60,000 units in China in FY 2013; to be doubled in FY 2020

 FHI has a wholly-owned sales subsidiary, Subaru of China Ltd. (SOC) that sells Subaru vehicles in China. In 2013, SOC agreed to a 40% capital injection by Pangda Automobile Trade Co., Ltd., a Chinese company that operates automobile dealerships of many brands. The organizational change was announced in January and put in effect in October 2013.

 The retail sales of Subaru vehicles reached 60,000 units in FY 2013, marking a new record over the 58,000 unit sales in FY 2010. The sales increase owes chiefly to the all-new Forester launched at the end of 2012 (34,971 units sold, up 52.0%), and the Subaru XV launched in February 2012 (13,836 units sold, up 39.5%).

 The company plans to increase the number of dealerships from about 200 to 250 as soon as possible within two years. It will also expand the product lineup to boost sales to over 120,000 units in FY 2020.

 FHI has filed an application with the Chinese government for joint production with a local company in China. It has not been approved as of June 2014. In the meantime, FHI will aim for the market penetration of the Subaru brand under import strategy and sales network enhancement.

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