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PostPosted: Thu Jan 24, 2008 2:24 pm 
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Q & A on Subaru's U.S. plans, and on cheesesteaks
from, December 17, 2007 ... teaks.html

Subaru of America Inc. chairman, president and CEO Tomohiko Ikeda hasn't had much time to get homesick for Japan since arriving in Cherry Hill to run the automaker's U.S. division. Ikeda is executing Subaru's goal of expanding its U.S. market share from its current 1 percent. It has opened offices in Los Angeles and Dallas, and is working on increasing dealerships from 599 to 625.

On his second tour here after serving as a vice president from 1998 to 2002, Ikeda faces a daunting situation. Although Subaru recently posted record sales, the overall auto market is lackluster. U.S. new-vehicle sales were probably 1.2 million in November, virtually unchanged from a year earlier and down 2.5 percent from October, according to

To be sure, Subaru's consumers are loyal. Consumer Reports rates the company's cars second in terms of reliability behind Honda and ahead of Toyota, which is one of the investors in Subaru's parent company, Fuji Heavy Industries Ltd. Consumer Reports recommends all of the company's models.

The company is in Cherry Hill because that's where Subaru's first distributors, Malcolm Bricklin and Harvey Lamm, had set up their company, Subaru in America, in 1968. It is now wholly owned by Fuji.

Ikeda, 54, who drives a dark-gray Tribeca, has made the most of his time in the Philadelphia region. His wife, Yuriko, earned a master's degree from the University of Pennsylvania during his last posting in Cherry Hill. She has accompanied him again to the United States. Their son Tenchi, 20, remains in Japan.

Ikeda spoke to us about Subaru's plans to meet the growing demand for environmentally friendly vehicles, its U.S. expansion plans, cheesesteaks, and Impressionism.

Q: Subaru has had trouble meeting sales targets in the past, but recently reported its best sales in 20 years. Does that mean it's on the right track?
A: Actually better this year. Last year, we sold over 200,000 units. It's the best sales in our history, over 200,000. Our target was a little below 200,000, because some products are discontinued, like Baja. (Also, this is a changeover year, when we've introduced four new models.) Our targets were down. Even so, the market is not good ... [because of] oil and the green issue.

Q: The car Web site has complimented the Impreza, but says Subaru suffers from "lack of brand awareness." Do you agree?
A: Based on our research data of awareness itself, of Subaru's name on, as you know, the Outback and Forrester, awareness is quite good. But honestly, the Impreza, it's not so familiar in the public like Outback or Forrester. That's why we are enhancing our investment for advertising and marketing to raise the name of Impreza.

Q: Is Subaru trying to reposition its brand from a premium to value brand?
A: In the long term, we want our target to be a kind of premium [brand].

Q: What are Subaru's plans for the hybrid market?
A: It's a great product that Honda has. But even such a big player like them, investing much money, it's not easy to get a return. ... Subaru is not big player. We are kind of a niche player in the market. The investment is quite high. ... If we have a hybrid, a huge investment is necessary and quite difficult to get all investment from that return because of the volume. It's different than other big players. As you know, we are having [an] alliance with Toyota. Toyota is our shareholder. Originally, Subaru had a project to develop the hybrid vehicles by ourselves. [But] because of the huge investment, it is better to find another way to utilize the investment with Toyota. I am not sure at this moment [whether] we are having any particular date or timing to introduce a hybrid. But still our engineers [are] studying it under alliance with Toyota.

Q: Is there any plan to refresh the Forrester or other models?
A: I can't confirm the timing, but [Ikuo] Mori, our president at Fuji in Japan, he mentioned that every year, we want to have a new product and year by year refresh all of our car line. I can't say what next year you can expect (for model changes).

Q: Your company is high on diesels. Do you think the U.S. market will ever really embrace them?
A: It's surprising that our dealer people [are] requesting us to have diesels. The voices are getting stronger. In the U.S. and Japan, emissions regulations are quite tough. ... Generally, American people and Japanese people do not like diesel cars because of [bad] experiences in the past, but Europe likes diesels. Half of the market share is now diesel engines. Now, European makers [are] trying to introduce many diesels in Europe and Japan. People's acceptance is different than the past. Because of these high energy prices, they can drive longer.

Q: When do you expect to sell more diesels in the United States?
A: The next five years. ... I think that's conservative.

Q: Your Impreza WRX is said to reflect Japanese heritage. What was your thinking behind that?
A: Because our target buyer for the WRX ... is much younger and is kind of a "man child," Asian culture is a strong influence.

Q: What are your expansion plans here or elsewhere?
A: I don't believe in big, big headquarters. But that does not mean we'll cut the number of people [in Cherry Hill]. If we enhance our organization, we need to have people much more in the field.

Q: Describe the typical Subaru customer.
A: Our customer base historically is relatively mature people ... not old, I dare to say. Kind of average, 45 to 60 years old, around that. That's been our customer base for a long time. To expand our business and to capture new customer base, the WRX is a suitable product for the young buyer, which in the past we didn't have too many of. ... In 2001, we introduced the first-generation WRX, then we started getting a new kind of buyer.

Q: Do you think U.S. automakers will become more competitive after slashing health benefits and other costs?
A: Always they are strong competitors for us. Fortunately, in the past, we were seeking to be a niche player. If we want to grow in the future, niche (does) not necessarily means small. ... If we want to sell more volume, we must compete with U.S. companies.

Q: Is $100-a-barrel oil good for Subaru?
A: I am not sure about the future price of oil, but definitely we need automobiles to live in this country. We'd like to supply as much fuel-efficient or green-friendly products as possible in the future.

Q: How do you like the Philadelphia this time around? How does it compare to your hometown in Japan?
A: This area, it's very good. … My hometown, it's much more beautiful (laughing). All of my memories are there.

Q: Have you found anything interesting or unique about the Philadelphia area? The shore?
A: I don't know about other areas so much. ... I am not so interested in the beach or shoreline. But trees, yes. Originally when I came here in 1998, I found more green than expected, more beautiful. Because this state is the garden state. ... New Jersey the Garden State. The name is correct. It's beautiful.

Q: Have you seen some of the cultural sights in the area?
A: Because our company is a sponsor of the Museum of Art, I got to go there to see the Impressionist art. At home, I have many, many Monets and Van Gogh [reproduction] prints. ... That is my hobby, to have nice artwork. I have had a chance to see to the Barnes collection, too.

Q: Have you had a chance to sample a cheesesteak?
A: Yeah. ... It's too big for me. The taste is good. It's unusual to find such a thin cut of beef. You may know, in Japan, we eat beef with a thin cut, the Shabi Shabu. ... I never thought there would be such a thin-cut beef in U.S.

- Jonathan Berr


Joe Spitz

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