TOKYO — CEO Tomomi Nakamura noticed the COVID-19 disaster blow Subaru Corp. off target from attaining an astounding 12th yr in a row of document U.S. gross sales in 2020.
However churning out document 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 targeted 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 Four %. 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 autos. Listed here are edited excerpts.
Q: How has the Subaru work power weathered the COVID-19 pandemic to date?
A: We have had about 40 instances, totally inside the group, simply in Japan. Within the U.S., the variety of affected individuals remains to be at a low degree.
How concerning the enterprise aspect?
In November, we saved gross sales tempo. It is tough to say why as a result of the variety of individuals contaminated with COVID has been rising in america. For general U.S. gross sales in 2020, we initially anticipated round 600,000 items, however it presently is about 605,000. So it’s a little higher.
What’s Subaru’s forecast for subsequent yr?
For 2021, we predict general U.S. market demand shall be round 15 million items.
The present market share of Subaru is 4.three %. If we take into consideration a wholesome improve from that subsequent yr, it may be round 650,000 or 660,000, although we do not actually find out about COVID.
What’s the standing of Subaru’s aim, below the STEP midterm marketing strategy, to attain U.S. deliveries of greater than 800,000 within the fiscal yr ending March 31, 2026?
Relating to the STEP objectives for america, we should rethink the numbers and timing. We truly hit 700,000 in 2019. To get better to that degree of gross sales, we predict it’ll be the yr after subsequent or possibly a little bit bit extra, so possibly 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 degree of complete demand? It won’t be real looking.
What we’re specializing in is just not absolutely the variety of gross sales however the share. So we’re 5 % market share. That might be the goal to hit, not absolutely the quantity.
Is there a measurement that’s too large for a small firm akin to Subaru?
We’re not placing a ceiling on the gross sales degree. It is determined by how a lot general business demand is. Primarily based on that, we need to choose the appropriate 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. That may be a little bit untimely, based mostly on our present lineup and business degree. However we’re additionally not placing a cap on complete gross sales. Proper now, I believe 5 % is the quantity. Then, as soon as we hit that mark, we are going to ask what is the subsequent technique to pursue. Both method, we’re placing the U.S. market first. That isn’t going to alter.
Are you able to give an replace on Subaru’s efforts to deal with latest high quality points?
We’re making good progress in high quality reform. There are two approaches.
One is to make sure we now have the appropriate high quality for autos presently in growth. The opposite is to react and give you options to defects in autos already available in the market.
New models which have come to the market just lately are the Forester and the Outback and the brand new Levorg, for Japan. We’re altering the complete growth course of to enhance high quality. And we positively see an enchancment.
However automobile growth takes a whole lot of time. We began this exercise from 2018, and complete automobile growth takes 5 years. So even for the brand new Levorg, we predict solely 50 % or 60 % of the essence of those high quality reforms is integrated into this automobile.
To see a 100 % influence, it is going to take till the autos within the subsequent full model modifications.
How is Subaru dealing with autos already available in the market?
We have been placing a whole lot of assets into this space. The response pace is arising. Options for defects available in the market are getting higher. However the autos available in the market had been produced years in the past.
So although we see enhancements within the autos being developed right this moment, retailers and clients are nonetheless coping with these available on the market, one after the other.
There are a whole lot of autos to deal with. 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 daily. They may not see that enchancment but. However I’m placing all my coronary heart and soul into bettering high quality, and I do know the scenario in america. Folks won’t be feeling the development 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 address all of the modifications by ourselves. So we have to have the appropriate accomplice, and we predict that’s Toyota.
The Toyota tie-up will quickly ship an all-electric crossover. How does Subaru profit?
We wished to reduce our funding as a result of we’re undecided how a lot revenue this venture goes to make. We additionally wished to reduce the danger of coming into within the EV market. To hedge, the partnership with Toyota helped.
Toyota has a whole lot of information in electrified autos. So we thought working with Toyota would enable us to introduce an EV or hybrid quicker. We are able to take in Toyota’s information.