Subaru had a sensational sales year in 2013, reporting best-ever sales and profits. The Japanese automaker needs all of the production capability it can get to meet roaring demand particularly in North America. As such, Subaru also confirmed previous reports that it will no longer manufacture the Toyota Camry at its Indiana plant when that contract expires at the end of 2016.
Since 2007, Subaru has manufactured about 100,000 Camry units annually at its Indiana plant. Capacity at the facility is currently capped at 310,000 units, but Subaru is already planning to expand that figure to 400,000. By 2016 Subaru will add production at the Impreza at the plant, which will effectively fill the void left when the Subaru Tribeca ended production this past January. It will also mean Subaru needs to edge out the Camry to have enough capacity to build the Impreza.
On the heels of record sales, record earnings, record revenue, and record profits, Subaru projects that its global sales will reach 916,000 over the next year. Global sales already grew 14 percent last year, totaling 825,000 units.
The company’s biggest market, responsible for about 60 percent of sales, is here in North America. Subaru posted 478,000 in sales here last year, a major 22 percent increase from its total in 2012. According to Automotive News, another 11 percent growth to about 531,000 units is projected for this year.
More good news came for parent company Fuji Heavy Industries, which benefitted from a corrected yen exchange rate, contributing to a record $266.5 million gain in earnings. That’s on top of the 73 percent-improved $2.01 billion net income. Revenue alone ballooned 26 percent to $23.44 billion. In short, it was Subaru’s best sales and earnings performance ever, since parent company Fuji Heavy Industries started reporting combined full-year financials in 1986.
Nowhere to go but up
There’s also a plan to reduce operating costs 20 percent by 2020. Subaru hopes to achieve this goal through consolidated vehicle platforms and more cost-effective manufacturing processes. Having already accomplished its sales goals set out in 2011, two years ahead of schedule, Subaru has set its sights high for 2020. The benchmark will be 1.1 million in sales. Based on the current rate of growth, 1.1 million in global sales might be the floor, not the ceiling.