Conventional automotive business wisdom says a company such as Subaru is too small to prosper or even survive over the longer term. With sales of just over one million vehicles last year, the Japanese car maker should, according to conventional wisdom, be looking at a merger with another, rather bigger, car maker.
In the case of Subaru, however, conventional wisdom is wrong. The Japanese company may be ploughing an individual furrow using boxer engines and permanent all-wheel drive on all of its full-size models, but it is delivering remarkable profit margins that, on a good day for the dollar-to-yen exchange rate, have been higher than industry leaders such as Porsche and Jaguar Land Rover. On 1 April, what was Fuji Heavy Industries changed its name to Subaru Corporation. Toyota owns 16.4% of the company and Suzuki 1.75%, while the rest is owned by financial institutions. A significant 94% of Subaru Corporation’s income is from automotive; its aerospace division accounts for just 4.7%.
Like Saab, that other determinedly individual automotive company, Subaru also has its roots in the aircraft industry. Fuji Heavy Industries started out in 1917 as Nakajima Aircraft, which built a wide range of military aircraft during World War Two, including the wellrespected Nakajima Ki-84 fighter.
Nakajima was wound up at the end of WW2 and reborn as Fuji Sangyo which, by 1951, was making scooters at the rate of 2000 a month as Japan began its rapid industrialisation. Then in 1953, the company released a three-wheel light commercial truck and, in 1954, its first light car, the 45bhp P-1, for which the brand name Subaru was created.
Subaru became best known, domestically at least, for its smallengined mini vehicles, or kei cars, the first of which, the Subaru 360, was launched in 1958. The first all-wheeldrive Subaru was the 1971 Leone station wagon, which the company says went on to become the world’s best-selling AWD passenger car. But it was the launch of the Legacy saloon and estate in 1989 that was really the foundation of the modern Subaru.