Subaru: Mid-term plan revised upward to exceed 1.2 million vehicles in FY 2020
Continuing to increase production capacity with a focus on North America
2016/10/26
- Summary
- "Prominence 2020" mid-term plan: Upward revisions to sales target for FY 2020 exceed 1.2 million vehicles, annual production capacity to increase to 1.13 million vehicles in FY 2018
- Company name changed to Subaru, industrial equipment company integrated with automobile division
- Earnings plan: Increasing research and development and capital investment while aiming for increased income and profit (excluding currency exchange factors)
- Product strategy: New models of core vehicle types released every year, PHV/EV also to be released sequentially
- New platform Subaru Global Platform (SGP): Capable of supporting PHV/EV
- Evolution of EyeSight: Realizing automated driving on highways in 2020
- Sales forecast by LMC Automotive: Subaru's sales will be 969,000 units in 2019
Summary
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| New platform Subaru Global Platform (SGP) (Fuji Heavy Industries) |
In order to unify its company and brand names, in May 2015, Fuji Heavy Industries announced it would change its name to ‘Subaru Corporation' on April 1, 2017. In addition, given its healthy performance up to FY 2015, the OEM made upward revisions to its numeric goals for its “Prominence 2020" mid-term plan.
The automaker's sales target for FY 2020 has been increased by 100 thousand vehicles to 1.2 million vehicles or more, of which 800 thousand or more are to be sold in the North American market. In its plan as of 2014, over half of the OEM's target sales were to be sold in the North American market in FY 2020, but with the new plan, roughly two-thirds of sales will be in the North American market.
Furthermore, FHI's plan to increase production capacity has also been updated. Production capacity in Japan will be increased to 696 thousand vehicles, and 436 thousand vehicles in the U.S. for a total of 1.132 million vehicles. The completion date of the plan was brought forward to FY 2018.
In terms of profitability, due to continuing appreciation of the yen, as well as increased experimental research expenses and capital investments for the purpose of ensuring that competitiveness is maintained, earnings are expected to decline. However, the automaker aims for sales and profit growth in figures that exclude the effects of currency exchange, and in the three years between FY 2016 and FY 2018, it will strive for an 11.2% operating margin that is an industry high.
As for its products, models featuring the new Subaru Global Platform (SGP) architecture will be released every year starting with the Impreza in fall 2016. The SGP is designed to also accommodate PHV and EV models, and can handle tighter regulations, with the Zero Emission Vehicle (ZEV) regulation in California being of particular concern. Additionally, advancements to the EyeSight driving support system are underway, and in 2017, FHI plans to implement automated driving in mass-produced vehicles, with functions including automated driving in single lanes on highways in heavy traffic, and will plan to launch autonomous driving for mass-produced vehicles on highway operations including lane changes in 2020.
Related Reports:
Subaru expects 16.6% profit margin for FY 2016 (Aug. 2015)
Subaru: Pre-Collision Steering Assist function adopted in EyeSight ver. 3 (Apr. 2015)
Tokyo Motor Show 2015: Subaru VIZIV Future Concept for autonomous driving on expressways (Dec. 2015)
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