Automotive News - February 12, 2018 - v2 - 21

SUBARU OF AMERICA

FEBRUARY 12, 2018 * 21

50 YEARS

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SUBARU

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spark an entrepreneurial career that included
helping to launch Yugo of America and the
creation of the gull-winged Bricklin SV-1
sports car.
Lamm stayed on and became CEO, and later chairman, before leaving in 1990. By then,
the U.S. business was deeply integrated into
parent company Fuji's larger plans.
Another early Subaru model, the FF-1, was
better sized for the U.S. And better yet, it was
twice as powerful as the 360, though it remained a gas sipper.
But in the mid-1970s, it was not merely
product enhancements that made Subaru a
viable business. It was also world politics.
Like other Japanese import brands, Subaru
saw its fortunes unexpectedly change for the
better when the 1973 oil embargo struck. At
the time of the Organization of Arab Petroleum Exporting Countries' embargo against
the United States, which sent a panic wave
over American consumers, the average fuel
economy of domestic cars was just 13 mpg.
Car buyers suddenly developed a desire for
smaller and more fuel-efficient cars, making
small vehicles from Japan overnight sensations.
In 1972, all import brands combined - including storied European luxury makes and
the volume-market Volkswagen - held just a
13 percent share of the U.S. market. That shot
up to a then-record 15.9 percent in 1975. The
import industry never looked back. Today, it
enjoys a nearly 56 percent share.
Subaru of America rapidly reaped the benefits of the more fuel economy conscious U.S.
consumer base. In 1974, Subaru sold 22,980
vehicles in the U.S. Just three years later, it
sold 80,826 vehicles.
Also in 1974, Subaru introduced its first
four-wheel-drive wagon, with trim lines
called DL and GL, unusual in that it was a
4wd car at a time when even 4wd on trucks
was a standout feature. It foreshadowed the
wagonlike crossovers that Subaru sells today
in the Outback, Forester and Crosstrek.
The little wagon would prove important
from a marketing standpoint as it became the
official car of the U.S. Ski Team. That distinction gave Subaru cachet among outdoor enthusiasts and active lifestyle consumers, a key
part of its brand today.
In 1980, just 12 years after the introduction

Paul Hogan helps Outback launch

An early photograph shows a California importer of Subarus. Subaru of America was a national
distribution company, but it had its own regional distributors.

Lamm: Subaru co-founder eventually became
CEO, then chairman, before leaving in 1990.

of the 360, Subaru sold 142,968 vehicles in the
U.S. Optional 4wd became available in all
models that year as well. By 1983, it had sold
its 1 millionth vehicle in the U.S.

Make it here
to sell it here
As the company began to grow, so did its facilities. In 1986, it moved its headquarters to a
$15 million, seven-story building in Cherry
Hill, N.J., just outside Philadelphia. Soon after
came an even bigger investment in the U.S. -

a manufacturing plant.
Fuji Heavy formed a joint venture with Isuzu
Motors to build and operate a $500 million
plant in Lafayette, Ind., northwest of Indianapolis. The two automakers would produce unrelated products - light trucks for Isuzu and cars
for Subaru. Fuji initially held a 51 percent stake,
while Isuzu held 49 percent, in the plant,
named Subaru-Isuzu Automotive Inc.
Before Richard Marshall joined Subaru of
America as its director of corporate communications in 1989, a role he was in through 2000,
he worked for Indiana's department of commerce, serving as a liaison between the state
government and the two Japanese automakers.
"There was pressure that we at the state really needed to win this one," he recalled of
bringing the factory to Indiana after the state
had missed out on auto plants going to Kentucky, Tennessee and Illinois.
Indiana offered the venture an incentive
package valued at $90 million to cover worker
training and road improvements and to provide tax abatements.
For its part, Subaru felt a strong desire for a
manufacturing plant - not just for the immediate production supply, but for planning.
"We had to have a U.S. production plant,"
Doll said, for the brand to further develop.
But the joint venture came with challenges.
Marshall described the venture as a bit of a

forced marriage, which led to some initial public skepticism as to whether it could succeed.
"These were two companies that had never
worked together," he said.
Vehicle production began Sept. 11, 1989,
with a Subaru Legacy sedan as the first model
off the line. It was immediately followed by a
small Isuzu pickup named the P'up.
"Most people thought Isuzu was the stronger of the two players," Marshall recalled, given Subaru's car-focused portfolio as other
automakers began debuting SUVs.
But it was Isuzu that eventually ran into
trouble. The venture ended in 2003, when Fuji bought its former partner's interest in the
plant for a token sum - $1.
"The joke was, they overpaid," said Subaru
dealer Don Hicks, president of Shortline Auto
Group in Aurora, Colo. "At the time, they
didn't need the capacity."
Today, however, Hicks
added, "Subaru needs everything they can build."
After Isuzu left, the
plant was renamed Subaru of Indiana Automotive
Inc. Subaru has invested
heavily in it, with multiple
improvements and ex- Marshall: Isuzu a
pansions. The plant sup- forced marriage
plies retailers with crucial
products: the Outback, Legacy and Impreza
sedan and hatchback.
For a short time, the plant also supplied
Toyota dealers with Camrys. That run ended
when Subaru needed more capacity to bring
Impreza production to the United States from
Japan in 2016.
Production of the brand's newest nameplate, the Ascent, will start there in May.

Fuji stakes its claim
That sort of U.S. expansion brought changes
at the company itself. On Aug. 31, 1990, not
long after the Indiana plant began production, Fuji Heavy Industries acquired full ownership of Subaru of America. Fuji already had
held a 49.6 percent stake of the U.S. company.
But a weakened dollar, an aging product line
and growing competition in the 4wd field was
making the U.S. operation vulnerable to a
possible takeover bid.
With the acquisition, Fuji took direct control of the U.S. company and operated it with-

Martina Navratilova was brought in for "What do I know?" campaign.

2008
2009
2012

Subaru's largest model ever, the
Ascent, debuts in Los Angeles.
The brand's sales total 647,956.

Despite the Great Recession
being in full swing, sales reach
216,652 in a record year.
Sales hit 336,441. Subaru
launches a new nameplate, the
Crosstrek.

1997

The Forester is introduced
for the 1998 model year.
Subaru sales reach
133,783.
Tennis star
Martina
Navratilova
is hired for
an ad
campaign with
the tag line

2013
"What do I know?" Sales hit
172,216.

2006

"It's what makes a Subaru a
Subaru" advertising campaign
launches. Sales break the
200,000 mark, with 200,703.

2007

Carmichael
Lynch is
named
advertising
agency of
record.
"Love" ads begin

2016

Redesigned Impreza, the first
model on the Subaru Global
Platform, launches. Sales jump
to 615,132.

The "Love" marketing campaign
launches.

2000

see SUBARU, Page 28

2017
2018

Subaru is set to move its
headquarters to a new building in
Camden, N.J.

Tom Doll is named
president. Sales climb to
424,683.

- Jack Walsworth

2014

Production of
the Tribeca
ends in
January.
Sales grow
to 513,693.

Crosstrek
debuts

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