
Small size hurts when a new model like the awkward seven-passenger
Tribeca fails to gain a foothold. It's also hard for a small car maker
to keep on top of new technology. Subaru's signature four-cylinder
"boxer" design is two decades old, and the company's first hybrid car
won't come out until next year, 15 years after Toyota's Prius went on
sale. Subaru suffered a near catastrophe when the earthquake and tsunami
in March 2011 closed factories in Japan for four weeks and interrupted
the flow of parts to its sole U.S. plant, in Lafayette, Ind. Dealers
were starved for cars. Used to operating with 32,000 cars on the ground,
Subaru saw its inventories drop to 17,000, pummeling sales.
Subaru
recovered but now faces fresh challenges. It needs to catch up with
competitors by developing fuel-efficient powertrains across its lineup,
opening more factories outside Japan to spread its currency risk, and
expanding its U.S. sales footprint. And it has to keep looking over its
shoulder. Fast-rising Volkswagen poached Subaru's top marketing
executive a year ago, and according to industry reports, VW is
considering a new crossover with ride height, bumpers, and wheel-arch
cladding that takes dead aim at Subaru's most popular models.
So
Subaru will have to find new ways to differentiate itself, which
shouldn't be much of a stretch. Since its founding, it has always gone
its own way. Its headquarters are in a New Jersey suburb, several
thousand miles away from its Japanese competitors in Southern
California. While former sales managers and marketing experts sit atop
most import car companies, Subaru's highest American executive is an
accountant who started at the company as an assistant treasurer. And
Subaru's product history is studded with oddities like the BRAT, a
mini-pickup with rear-facing jump seats bolted to the rear bed to
circumvent a tariff known as the chicken tax; the Justy, which Top Gear
said "manages the impressive feat of being as boring as its name
promises"; and the Baja, a station wagon, built with an open cargo bed
in place of a rear compartment, which one reviewer compared to a
platypus.
MORE: The Subaru BRZ - a sportscar in the classic mode
Subaru
of America was started in 1968 by two entrepreneurs, Malcolm Bricklin
and Harvey Lamm, who contracted with Fuji Heavy to import cars as the
initial wave of Japanese imports was washing onto U.S. shores. Their
first car was the 360, a minicar with a 25-horsepower engine that needed
37 seconds to get from zero to 50 miles per hour; Consumer Reports
called it the "Most Unsafe Car in America." But by selling
distributorships, SOA went on to become the only import car company that
was publicly traded; it made small fortunes for its two founders.
Bricklin went on to build his own eponymous safety car, imported Fiats
and Yugos, and was last seen trying to make a deal to import China-built
Cherys.
Despite its rocky start, Subaru clung to its tiny niche
like a freestyle rock climber on El Capitan. It introduced an AWD system
in 1972 and continually upgraded its boxer engine. Its marketing and
advertising cleverly exploited the brand's offbeat appeal. After it won
the endorsement of the U.S. ski team in 1976, the company broadcast a
commercial showing a Subaru driving up a snow-covered ski jump. Subaru
was also a pioneer in reaching out to gays and lesbians, recently
advertising on television shows like The L Word.
Still, its existence
remained precarious. Subaru nearly collapsed in the 1980s when it tried
to challenge Toyota, Honda, and Nissan in the mainstream car market
with a lineup of sedans and sports cars sold under the slogan
"Inexpensive and built to stay that way." When the yen rose late in the
decade, the price of made-in-Japan Subarus exploded, and its high-volume
strategy collapsed. Its sales, which had peaked in 1986 at 183,242,
fell all the way to 100,407 by 1995, and nobody would have been
surprised if Subaru had left the U.S. market. (This year sales are
expected to be 325,000.)