by Subaru and Its Dependence on the American Market
The Japanese automaker Subaru is heavily dependent on sales in the USA. Last year, 71% of all the brand’s new models were sold specifically on the American market, making it the most important for the company. This fall, Subaru plans to start production of the Forester model at its plant in Indiana, which could help reduce the impact of tariffs imposed by the Trump administration.
Despite the Forester remaining the most popular Subaru model in the USA, the company faces serious challenges. About half of the cars it sells in America are imported from Japan, making them 25% more expensive due to tariffs. This could reduce Subaru’s operating profit by $2.5 billion, which is almost equal to the profit from the last financial year.
Prospects for Production in the USA
The new Forester model, which some criticize for its too conventional design, is already available on the market, and a hybrid version was recently added to the lineup. Currently, the car is produced in Japan, but this fall Subaru will begin its production at the plant in Indiana. Company President Atsushi Osaki noted that the plant’s capacity could be increased to 400 thousand cars per year.
“It is true that producing more cars in the US would help us with tariffs, but it would be difficult without cooperation from all suppliers,” Osaki stated.
However, Subaru is not yet ready to increase production in the USA due to its dependence on Japanese suppliers. The company received a record 12 thousand orders for the Forester in Japan in April alone, which is twice the previous record. For comparison, only 19,330 units of this model were sold in the USA that same month.
The complexity of the situation lies in the fact that Subaru is under pressure from two sides: on one hand – high tariffs in the USA, on the other – the need to maintain the Japanese market. The company will have to find a balance between these two directions to preserve its market position. The success of the new Forester, especially its American version, could become a decisive factor for the brand’s future.
