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Subaru: Japanese Cars for American Lifestyles

Author: Christopher Taylor

Subaru, a subsidiary of the Japan-based Fuji Heavy Industries, is not really well-known in America. Although the automobile company has been selling cars in the U.S. since 1968, it has yet to reach an annual sales figure of 1,000,000 vehicles and struggles to keep its dealerships and distribution centers stocked with cars and parts.

History of Subaru

Subaru began making cars in Japan in the 1950s and first exported them to the U.S. in 1968. By the 1980s, the Japanese cars became expensive due to the rising Japanese yen, and so Americans looked for cheaper alternatives. Among the alternatives was neighboring South Korea's Hyundai Motor Company – a company that has since become a major automobile brand in the U.S. Subaru continued along slowly, selling relatively few cars each year, primarily in the northwestern states. By the 2000s, the company had solidified its reputation as a manufacturer of safe and fun-to-drive vehicles that could withstand rough terrain. (For more, see: The Industry Handbook: Automobiles.)

Why Drive A Subaru?

Subaru has built its cars differently from traditional cars, and once someone is drawn in by the company's catchy advertising techniques, he is a Subaru driver for life. The first thing that stands out about a Subaru car is its rare engine design. By reconfiguring the engine to lie horizontally, Subaru's Boxer Engines are more powerful and efficient than standard models. The same design allows the car to be more evenly balanced, resulting in a vehicle that is easier to turn and to maneuver when compared to its competitors.

Additionally, Subaru is one of the few car companies to make cars with true all-wheel drive (AWD). AWD gives the car more traction when the road conditions are rough by automatically providing the wheel with more energy to accelerate the vehicle. AWD, coupled with the low-profile engine, ensure that Subaru cars firmly grip the road in all weather conditions.

Safe and Secure

The strong traction control and maneuverability of Subaru cars easily explain why the company wins so many awards for excellence. From being top picks to having the best resale value to being strong protectors of the environment, Subaru cars are recognized as all-around good buys.

Most importantly, though, is Subaru's safety record. In 2014, six Subaru cars received the Insurance Institute for Highway Safety (IIHS)'s Top Safety Pick for the fifth year in a row. The safety section on Subaru's website highlights how strong these cars are. The I Survived series chronicles the stories of real owners who had real, horrific accidents and walked away thanks to their Subaru. (For more, see 2011 Cars With The Highest Resale Value.)

Price

Subaru has priced its vehicles competitively. While not the cheapest cars available, they are, by and large, the most affordable way to get the safety features, AWD and horizontally laid-out engine. Then there's the issue of the law of supply and demand.

As both Automotive News and the Wall Street Journal point out, Subaru cars. especially the Subaru Forester, are in very short supply. Customers are ordering vehicles and waiting for them to ship from Japan in order to get the specifications that they want.

With Subaru's sales growing year after year, the company is in need of a price increase. Not only will a price increase relieve some of the pressure that the company is inevitably facing with its vehicle shortages, but it will also increase boost margins – something that will please the shareholders.

The Bottom Line

How has Subaru stayed relevant in the U.S. for over 50 years while only commanding a small fraction of the automotive market share? The answer is through safe, reliable cars. Subaru cars are built strong and come equipped with features that an ordinary consumer would never think of requesting. Sturdy in all terrain and easily driven in rain and snow, Subaru cars are built in Japan for an American way of life.

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