[Company analysis] Subaru Corporation

「Subaru Corporation」is a automobile manufacturer that is more popular and famous worldwide than in Japan. They also carry out aerospace related business, and are engaged in military industry to manufacture helicopters and airplanes for「Boeing」and「Lockheed Martin」with the approval of the Japanese government. The number of consolidated employees is approximately 34,200.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Subaru Corporation
Company name (Japanese)	SUBARU
Date of establishment	May 1917
Headquarters location	〒150-0013 東京都渋谷区恵比寿1-20-8
Capital	153,795
Consolidated sales	3,160,514
Consolidated operating profit	195,529
Consolidated total assets	2,982,725
Consolidated capital	1,612,825
Capital adequacy ratio	54.1%
Consolidated number of employees	34,200

 

 

 

2. Summary and Features

 
「Nakajima Aircraft Company(中島飛行機)」is the predecessor of「Subaru」. Innitially, it was a private plane research institute established in Gunma Prefecture in 1917, but after numerous business integrations,「Nakajima Aircraft Company」was formed. They conducted development and manufacturing of military aircraft and engines for the Imperial Japanese Army and Navy until the end of World War II. On that time, it was the largest aircraft manufacturer in Japan. However, after the war, GHQ prohibited researching and manufacturing aircraft in Japan. 

Since then,「Subaru」decided to start non-military business such as transportation equipments including scooters and buses. In 1958, they launched the compact car, "Subaru 360" and its derivative models. Due to the great technical and commercial success of this launching, from 1968 they started a business alliance with「Nissan Motor」. From the 1970s, they had made a full-scale entry into overseas markets and, in particular, experienced dramatical sales increasing in the US market. As a result, the production volume of「Subaru」, became doubled and the scale of the company was expanded sharply.

However, the Plaza Accord caused sharp appreciation of the yen, eventually「Subaru」who depends on low price strategy, faced a serious sales slump in the North American market.  In 1987, they established「Subaru Isuzu Automotive(スバル・イスズ・オートモーティブ)」in collaboration with「Isuzu Motors」and started local production in North America. As a result, they failed in reducing manufacturing cost even though they started local production. In 1989, there was an operating deficit of 30 billion yen. 

Fortunately, in January 1989, medium-sized personal veicle, "Legacy" was released.「Subaru」somehow was abled to recover the sales in the Japanese domestic market and the North American market, and escaped from the crisis. After that, the business partnership with「Nissan Motor」was replaced with 「General Motors」. However, after the Subprime mortgage crisis, they eventually tie-up with「Toyota Motor Corporation」.

In fact, among Japanese automobile manufacturers,「Subaru」is the company who consider the technological capability as the most important factor. In particular, Their automobile are usually equipped with a original horizontally-opposed engine, mechanical 4WD system, a stereo camera-based safety system "EyeSight"and collision damage reduction brakes, etc. This contributes to build a brand image of a safe car. For this reason, Subaru's cars are evaluated to have little depreciation value, and they were able to secure a 3.5% share in the US market. Compared with other major automobile manufacturers,「Subaru」is relatively small company in Japan. Even though they have advanced technology in their field and achieved a great reputation from oversea market.

 

 

 

3. Major Business

 

■ Automobile business 
Since the launch of the "Subaru 360" in 1958, they have been developing businesses that make use of their unique technological capabilities. In particular, the "EyeSight" system of「Subaru」is a system that senses and avoids movements of surrounding vehicles, pedestrians, motorcycles, etc.

■ Aerospace business
As the successor to the「Nakajima Airplane」, which was a pioneer in the Japanese aerospace industry, this company still has the 3rd largest sales in Japan. They manufacture and maintain aircraft, firefighting and police helicopters.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		3,325,992	3,405,221	3,160,514
Consolidated operating profit		410,810	379,447	195,529
Consolidated total assets		2,762,321	2,884,313	2,982,725
Consolidated net assets		1,464,888	1,561,023	1,612,825
Breakdown of sales	Automobile business	3,151,961	3,234,866	3,014,476
	Aerospace business	138,759	142,163	131,669
	Others	35,272	28,192	14,369