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Subaru supplies running low as automaker struggles to keep up with US demand

Consumers in the US are gobbling up Subaru models, a trend that may result in dealer shortages if the Japanese automaker isn't able to meet the surging demand. A quick look at the numbers reveals a 25.2 percent year-over-year jump in April US sales, and a 17-percent gain for the first quarter of 2013. The sales are so strong that the company's CEO, Yasuyuki Yoshinaga, told the Wall Street Journal that Subaru will exceed its 2016 goals (380,000 US units sold) by the end of the company's current business year. The US market has grown to be one of Subaru's best, with the company now logging about half its global sales on our shores.
While strong sales are good problem to have, the automaker has relatively limited production capacity, which may leave dealers with sparse inventory. Certain models, such as the popular Forester crossover (shown above), could hit 10,000 units this month with the plant at full capacity (far above its target of 8,000 units). On average, the US car industry has a 60-day supply of vehicles on hand, but inventory for the new Forester is at just 16 days. "If this situation persists, we'll face a supply shortage," Mr. Yoshinaga told the WSJ.
Despite being one of the smallest Japanese automakers by volume, this is all positive news for Subaru and parent Fuji Heavy Industries, which projects a second straight year of record operating profit thanks to strong US sales and a weaker yen.

Subaru weighing Outback vs Forester approach for seven-seater

Subaru is gearing up for a return to the seven-seat crossover segment, and it's focusing the new model on the US market, but just which approach it will take has yet to be decided. One possibility, according to Automotive News, would be to position it as a larger counterpart to the Outback wagon, with rugged off-road styling. The other would be to sell it as a big brother to the Forester, with cleaner styling. One thing Subaru most definitely does not want to repeat is the Tribeca fiasco, so we wouldn't expect the new model to carry that same nameplate. Introduced in 2006, the Tribeca's divisive front-end styling kept it from being a serious player, and it underwent a facelift only two years later. It was withdrawn from the market altogether after 2014. The company had targeted moving 36,000 units of the Tribeca each year, but sold fewer than 2,800 in America in 2011, barely over 2,000 in 2012, less than 1,600 in 2013 and just a few hundred in 2014. The new seven-seat crossover will go after the likes of the Toyota Highlander, Nissan Pathfinder and new Honda Pilot among three-row Japanese crossovers. Like those rivals, it will be built in the US for the US market – namely at Subaru's assembly plant in Indiana, the same state where the Highlander is produced. The new crossover's arrival will, according to reports, mean that the Levorg wagon offered in Japan and Europe won't be offered Stateside. Related Video:

Subaru puts China production on hold amidst slowing growth

Subaru's 2015 sales and production forecast estimates the Japanese brand to sell about 60,000 vehicles in China this year, a 10 percent rise. However, a recent decision not to build a factory there might make future growth more difficult. Given the changing state of the market, the automaker doesn't seem concerned by the potentially lost sales. According to Bloomberg, even if the Chinese government gave permission for Subaru to build its planned joint venture factory with Chery, the Japanese brand would not take advantage of it. "Since the profits are split with your partner, you would have to double the sales to maintain the profits you earn by exporting from Japan," said Akira Mabuchi, the company's executive in charge of China, according to Bloomberg. Subaru is in the odd position of being the only major Japanese automaker without a joint venture partner to build cars in China, but the massive year-over-year growth there seems to be slowing. Auto sales in China were up 6.9 percent in 2014, according to Bloomberg, compared to 14 percent in 2013. Also, Chinese consumers have been famously averse to buying Japanese vehicles with only half of the consumers there even willing to purchase one. Instead, the company is focusing on the US market, according to Bloomberg. The decision makes sense. While Subie's sales in China shrunk 2 percent in 2014 to about 55,000 vehicles, the company grew 21 percent in the US to 514,000 units. The automaker already has plans to add capacity to its factory in Indiana. News Source: BloombergImage Credit: Jae C. Hong / AP Photo Plants/Manufacturing Subaru