TOKYO — CEO Tomomi Nakamura noticed the COVID-19 disaster blow Subaru Corp. off track from attaining an astounding twelfth yr in a row of file U.S. gross sales in 2020.
However churning out file quantity is not the highest precedence for Nakamura, who chaired the Japanese carmaker’s U.S. operations earlier than taking the helm at world headquarters in 2018.
Nakamura, 61, is as a substitute centered on overcoming the corporate’s high quality woes and steadily constructing market share. Regardless of the pandemic, Subaru has made progress on each objectives over the previous yr, with U.S. market share now eclipsing 4 %. Nakamura’s subsequent milestone: 5 %.
Talking by an interpreter, Nakamura met with Asia Editor Hans Greimel on the firm’s head workplace in Tokyo to debate Subaru’s gross sales objectives, its partnership with Toyota and the corporate’s outlook for electrified automobiles. Listed below are edited excerpts.
Q: How has the Subaru work power weathered the COVID-19 pandemic up to now?
A: We have had about 40 circumstances, completely throughout the group, simply in Japan. Within the U.S., the variety of affected individuals continues to be at a low stage.
How in regards to the enterprise facet?
In November, we saved a great gross sales tempo. It is tough to say why as a result of the variety of individuals contaminated with COVID has been growing in america. For general U.S. gross sales in 2020, we initially anticipated round 600,000 items, but it surely presently is about 605,000. So it’s a little higher.
What’s Subaru’s forecast for subsequent yr?
For 2021, we expect general U.S. market demand might be round 15 million items.
The present market share of Subaru is 4.3 %. If we take into consideration a wholesome improve from that subsequent yr, it could be round 650,000 or 660,000, although we do not actually find out about COVID.
What’s the standing of Subaru’s purpose, underneath the STEP midterm marketing strategy, to realize U.S. deliveries of greater than 800,000 within the fiscal yr ending March 31, 2026?
Concerning the STEP objectives for america, we must rethink the numbers and timing. We truly hit 700,000 in 2019. To get better to that stage of gross sales, we expect it’ll be the yr after subsequent or perhaps just a little bit extra, so perhaps 2022 or 2023.
After 2022, like round 2023 to 2025, it’s tougher to make a forecast. In earlier years, the general U.S. business was at 17 million. However out to 2025, is the market going to hit that stage of whole demand? It won’t be sensible.
What we’re specializing in just isn’t absolutely the variety of gross sales however the share. So we’re taking a look at 5 % market share. That will be the goal to hit, not absolutely the quantity.
Is there a measurement that’s too huge for a small firm akin to Subaru?
We’re not placing a ceiling on the gross sales stage. It is dependent upon how a lot general business demand is. Primarily based on that, we wish to decide the best place. So that’s the 5 %.
I am not saying we’re going to have the ability to develop to, like, double our present measurement. Which may be just a little untimely, primarily based on our present lineup and business stage. However we’re additionally not placing a cap on whole gross sales. Proper now, I feel 5 % is the quantity. Then, as soon as we hit that mark, we’ll ask what is the subsequent technique to pursue. Both means, we’re placing the U.S. market first. That’s not going to vary.
Are you able to give an replace on Subaru’s efforts to handle latest high quality points?
We’re making good progress in high quality reform. There are two approaches.
One is to make sure we’ve got the best high quality for automobiles presently in improvement. The opposite is to react and provide you with options to defects in automobiles already available in the market.
New fashions which have come to the market not too long ago are the Forester and the Outback and the brand new Levorg, for Japan. We’re altering the whole improvement course of to enhance high quality. And we undoubtedly see an enchancment.
However automotive improvement takes numerous time. We began this exercise from 2018, and whole car improvement takes 5 years. So even for the brand new Levorg, we expect solely 50 % or 60 % of the essence of those high quality reforms is included into this car.
To see a one hundred pc affect, it is going to take till the automobiles within the subsequent full mannequin adjustments.
How is Subaru dealing with automobiles already available in the market?
We have been placing numerous sources into this space. The response pace is developing. Options for defects available in the market are getting higher. However the automobiles available in the market have been produced years in the past.
So despite the fact that we see enhancements within the automobiles being developed right this moment, retailers and clients are nonetheless coping with these available on the market, one after the other.
There are numerous automobiles to maintain. Retailers and clients aren’t feeling that enchancment but. Retailers textual content me and say, “You do not perceive the scenario available in the market.” However we do perceive.
Retailers are dealing with these defects and dealing exhausting day-after-day. They won’t see that enchancment but. However I’m placing all my coronary heart and soul into enhancing high quality, and I do know the scenario in america. Folks won’t be feeling the advance proper now. However it is going to come, and they’re going to really feel it.
Why does Subaru want a capital tie-up with Toyota?
As a result of the automotive business goes by this once-in-a-century transformation and coping with the coronavirus, the scenario could be very unsure.
Subaru is a small producer, and we’re not going to have the ability to deal with all of the adjustments by ourselves. So we have to have the best associate, and we expect that’s Toyota.
The Toyota tie-up will quickly ship an all-electric crossover. How does Subaru profit?
We needed to reduce our funding as a result of we’re undecided how a lot revenue this venture goes to make. We additionally needed to reduce the danger of coming into within the EV market. To hedge, the partnership with Toyota helped.
Toyota has numerous information in electrified automobiles. So we thought working with Toyota would enable us to introduce an EV or hybrid sooner. We will take in Toyota’s information.