Executive Briefings

Subaru Is Incredibly Successful. Would Expansion Change That?

Since 2011, Subaru's global sales have surged 45 percent to 913,100 vehicles, a pace bested only by a few burgeoning Chinese brands and Fiat Chrysler, which has been intent on making Jeep a popular choice in Europe and Asia. In the U.S., Tesla is the only car company that has increased sales as quickly in that period. And Subaru has done all this while cranking out the best profit margin in the industry.

Subaru Is Incredibly Successful. Would Expansion Change That?

The company, however, couldn't be less suited to handle a sales surge. Last year, Toyota, the world’s largest automaker, sold a car about every three seconds, while it took 35 seconds for a Subaru to leave the lot. Almost any car company one can name is far bigger than little Fuji Heavy Industries, Subaru's parent. BMW? More than twice the size in terms of unit sales. Kia? Almost three Subarus. Even Mazda sells 50 percent more cars.

Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be. Should it expand?

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The company, however, couldn't be less suited to handle a sales surge. Last year, Toyota, the world’s largest automaker, sold a car about every three seconds, while it took 35 seconds for a Subaru to leave the lot. Almost any car company one can name is far bigger than little Fuji Heavy Industries, Subaru's parent. BMW? More than twice the size in terms of unit sales. Kia? Almost three Subarus. Even Mazda sells 50 percent more cars.

Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be. Should it expand?

Read Full Article

Subaru Is Incredibly Successful. Would Expansion Change That?