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Examining Subarus Strengths, Weaknesses, Opportunities, and Threats

subaru swot analysis

Introduction to Subaru

Subaru, the automobile division of the Subaru Corporation, has been making its mark in the automotive industry since its establishment in Japan in 1953. Over the years, Subaru has gained recognition for its reliable and durable vehicles, attracting a loyal customer base worldwide. With a presence in almost 80 countries, Subaru manufactures sedans and SUVs, including popular models such as Impreza, Legacy, Cross back, Forester, Outback, BRZ, and WRX (Marketing91).

Overview of Subaru

Subaru is renowned for its commitment to engineering excellence and its unique symmetrical all-wheel drive system. This system provides enhanced stability, traction, and control, making Subaru vehicles well-suited for various terrains and weather conditions. The brand’s dedication to safety is also evident in its inclusion of advanced safety features across its vehicle lineup. Subaru has consistently emphasized safety and reliability, earning it a strong reputation in the automotive industry.

History of Subaru

Subaru’s journey began in Japan in 1953, and since then, it has grown into a global automotive brand. Over the years, Subaru has evolved and adapted to changing market demands, continuously innovating and refining its vehicles to meet customer expectations. Subaru’s success can be attributed to its focus on engineering excellence, quality craftsmanship, and commitment to customer satisfaction.

Today, Subaru enjoys a strong presence in the United States, with its sales steadily increasing over the past decade. In 2019, Subaru achieved a record high of 700,117 units sold in the US alone (GoodCarBadCar). The brand’s popular models in the US include the Outback, Forester, and Crosstrek, which collectively contribute to its market success and customer loyalty.

As Subaru continues to expand its global reach, it remains dedicated to its core values of safety, reliability, and engineering excellence. The brand’s commitment to customer satisfaction and its ability to adapt to market demands have positioned it as a key player in the automotive industry.

In the following sections, we will delve into a SWOT analysis of Subaru, examining its strengths, weaknesses, opportunities, and threats. We will also explore various factors that impact Subaru’s performance, such as economic and market factors, its brand reputation and market position, global sales and market share, manufacturing and supply chain risks, as well as its focus on safety, technology, and electrification.

SWOT Analysis of Subaru

Analyzing the strengths, weaknesses, opportunities, and threats of Subaru provides valuable insights into the brand’s position in the automotive industry.

Strengths of Subaru

Subaru boasts several key strengths that contribute to its success in the market. The brand has built a strong reputation and a loyal customer base, thanks to its focus on safety and reliability (Source). By consistently delivering high-quality vehicles, Subaru has earned the trust and satisfaction of its customers.

Another strength of Subaru lies in its positioning in the crossover and SUV market. Models like the Forester and Outback have gained popularity among consumers, allowing Subaru to establish itself as a leader in this segment (Source).

Weaknesses of Subaru

While Subaru enjoys success in certain areas, it also faces a few weaknesses. One notable weakness is its limited presence in the luxury car market. Unlike some competitors who offer a broader range of luxury vehicles, Subaru’s offerings in this segment are relatively limited. This can hinder the brand’s ability to compete with luxury car manufacturers and attract customers seeking higher-end options.

Opportunities for Subaru

Subaru has several opportunities to further strengthen its position in the automotive industry. Expanding its product range to include more luxury vehicles could tap into a new market segment and attract a broader customer base (Source). Additionally, Subaru can focus on enhancing its marketing strategy to reach a wider audience and increase brand visibility (Source). By targeting specific customer segments, such as outdoor enthusiasts, Subaru can capitalize on its existing strengths and brand image to drive growth (Source).

Threats to Subaru

Subaru faces significant competition from other automakers in the industry, including Toyota, Honda, and Ford. These competitors pose a threat to Subaru’s market share and require the brand to continuously innovate and differentiate itself in order to remain competitive (Source).

Another potential threat lies in the manufacturing presence of Subaru in Japan. Disruptions in the supply chain or changes in trade policies could impact production and distribution, affecting Subaru’s ability to meet customer demand (Source). It is crucial for Subaru to have contingency plans in place to mitigate these risks and ensure a smooth supply chain operation.

By understanding and leveraging its strengths, addressing weaknesses, capitalizing on opportunities, and mitigating threats, Subaru can navigate the dynamic automotive industry and maintain its position as a trusted and successful brand.

Economic Factors Affecting Subaru

Subaru, like any automotive company, is subject to various economic factors that can significantly impact its business performance and financial position. In this section, we will examine some key economic factors that affect Subaru, including the impact of economic conditions, currency exchange rate fluctuations, financial market changes, and fluctuations in raw material prices.

Impact of Economic Conditions

Economic conditions in countries and regions that represent important markets for Subaru, such as Japan and North America, can have a major impact on the company’s business performance and sales revenue. During periods of economic downturn, consumers may reduce their spending on discretionary items such as automobiles, leading to decreased demand for Subaru vehicles. Conversely, during periods of economic growth, consumer purchasing power may increase, resulting in higher demand for Subaru vehicles.

Currency Exchange Rate Fluctuations

Fluctuations in currency exchange rates, particularly between the U.S. dollar and the Japanese yen, can impact Subaru’s sales revenue and financial position. Subaru is exposed to currency exchange rate risk, as it operates in various global markets. Changes in exchange rates can affect the competitiveness of Subaru’s products in international markets and impact the company’s profitability.

To mitigate this risk, Subaru utilizes various hedging strategies, including forward exchange rate contracts, to minimize the impact of exchange rate fluctuations (Subaru Investor Relations). These risk management practices help to stabilize the company’s financial position and mitigate the potential adverse effects of currency exchange rate movements.

Financial Market Changes

Changes in financial markets, including the inability to secure funding or significant fluctuations in the fair value of financial assets, can have a significant impact on Subaru’s business performance and financial position. Financial market conditions, such as interest rates and availability of credit, can influence consumer purchasing behavior and affect Subaru’s sales and profitability.

Subaru closely monitors financial market changes and adapts its financial strategies accordingly to ensure stable funding and optimal financial performance.

Fluctuations in Raw Material Prices

As with any manufacturing industry, Subaru is exposed to fluctuations in the prices of raw materials. Rising prices of raw materials can have a significant impact on the company’s business performance and financial position. Materials such as steel, aluminum, and rubber are essential components in automobile manufacturing and can experience price volatility due to factors such as supply and demand dynamics, geopolitical events, and market speculation.

To manage this risk, Subaru employs proactive supply chain management practices and seeks to establish long-term partnerships with suppliers. By closely monitoring raw material prices and maintaining effective supplier relationships, Subaru aims to mitigate the impact of raw material price fluctuations on its business operations.

Understanding and effectively managing these economic factors is essential for Subaru’s continued success and competitiveness in the automotive industry. By monitoring economic conditions, currency exchange rate fluctuations, financial market changes, and raw material prices, Subaru can make informed decisions to navigate potential challenges and leverage opportunities in the market.

Market Factors Affecting Subaru

When examining the strengths, weaknesses, opportunities, and threats of Subaru, it’s important to consider the market factors that can significantly impact the company’s performance and position within the automotive industry. These market factors include changes in market demand, the competitive environment, and digital innovation.

Changes in Market Demand

The automotive industry is highly influenced by changes in market demand, which can be driven by various factors such as evolving consumer preferences, economic conditions, and shifting trends. Subaru needs to closely monitor and adapt to these changes to ensure continued success.

Understanding customer needs and preferences is crucial for Subaru to develop and deliver products that resonate with the target market. By conducting market research and staying attuned to consumer insights, Subaru can identify emerging trends and adjust its product offerings accordingly. This allows the company to meet the evolving demands of customers and maintain a competitive edge in the market.

Competitive Environment

Subaru faces significant competition from other automakers in the industry, such as Toyota, Honda, and Ford. The competitive landscape within the automotive market can impact Subaru’s market share, pricing strategies, and product development decisions. It is essential for Subaru to continuously assess its competitors’ strategies and offerings to stay ahead in the market.

To maintain a strong position in the industry, Subaru must differentiate itself from competitors through unique selling propositions, such as its renowned all-wheel-drive technology, focus on safety, and commitment to reliability. By continuously improving its products and offering exceptional customer experiences, Subaru can effectively compete in the market.

Digital Innovation

Digital innovation plays a vital role in the automotive industry, transforming the way vehicles are manufactured, marketed, and serviced. Subaru must embrace digital technologies and leverage them to enhance its customer experiences, streamline operations, and drive innovation.

Digital platforms provide opportunities for Subaru to connect with customers, build brand loyalty, and gather valuable insights. Through effective digital marketing strategies, Subaru can reach its target audience, engage with potential buyers, and communicate the unique features and benefits of its vehicles. Additionally, digital innovation can enhance the overall ownership experience by offering advanced infotainment systems, connectivity features, and driver assistance technologies.

By staying at the forefront of digital innovation, Subaru can strengthen its market position and effectively compete in an increasingly digital world.

Understanding and adapting to changes in market demand, navigating the competitive environment, and embracing digital innovation are essential for Subaru to thrive in the automotive industry. By proactively addressing these market factors, Subaru can position itself for sustained growth and success.

Subaru’s Brand Reputation and Market Position

Subaru has established itself as a reputable brand in the automotive industry, known for its strong brand reputation and a loyal customer base. With a focus on safety and reliability, Subaru has garnered the trust and confidence of consumers.

Strong Brand Reputation

Subaru’s strong brand reputation stems from its commitment to quality and performance. The brand has built a reputation for producing durable and dependable vehicles that can withstand various driving conditions. This reputation has led to a loyal customer base that appreciates Subaru’s reliability and long-lasting value.

Focus on Safety and Reliability

One of Subaru’s key strengths is its emphasis on safety. The brand has consistently prioritized safety features and technologies across its vehicle lineup. Subaru’s commitment to safety has resulted in high safety ratings and accolades from organizations such as the Insurance Institute for Highway Safety (IIHS) and the National Highway Traffic Safety Administration (NHTSA). This focus on safety has resonated with consumers, particularly those who prioritize the well-being of themselves and their families.

Positioning in the Crossover and SUV Market

Subaru has strategically positioned itself as a leader in the crossover and SUV market. The brand offers a range of crossover models, such as the Forester and Outback, which have gained popularity among consumers seeking versatile and capable vehicles. Subaru’s emphasis on all-wheel drive technology, coupled with its reputation for reliability, has made it an attractive choice for individuals who value performance and off-road capabilities.

Limited Presence in the Luxury Car Market

While Subaru has established itself as a strong competitor in the crossover and SUV segments, it has a limited presence in the luxury car market. This limited presence puts Subaru at a disadvantage compared to competitors who offer a broader range of luxury offerings. Expanding its presence in the luxury car market could provide Subaru with an opportunity to attract a wider range of customers and increase market share.

By capitalizing on its strong brand reputation, commitment to safety and reliability, and continued focus on the crossover and SUV market, Subaru can maintain its position as a reputable and sought-after brand in the automotive industry. However, expanding its presence in the luxury car market could be a potential avenue for growth and increased market share.

Subaru’s Global Sales and Market Share

Examining the global sales and market share of Subaru provides valuable insights into the brand’s reach and popularity across different regions.

Global Unit Sales and Market Presence

Despite the challenges posed by the COVID-19 pandemic, Subaru’s global unit sales remained strong. In 2020, Subaru sold approximately 1.04 million vehicles worldwide, as reported by Statista. This indicates the brand’s continued appeal to consumers and its ability to navigate through difficult market conditions.

Sales in the United States

The United States represents a significant market for Subaru, with the brand consistently achieving impressive sales figures. In 2020, Subaru sold a total of 611,423 vehicles in the United States, making it the largest market for the brand. This accounted for approximately 59.1% of Subaru’s global unit sales for that year Statista. The popularity of Subaru vehicles in the United States can be attributed to factors such as their reputation for reliability, safety features, and a strong presence in the crossover and SUV market.

Sales in Europe

Subaru’s sales in Europe also demonstrate a positive trend. In 2020, Subaru experienced an 8.7% increase in sales in Europe, selling a total of 90,073 vehicles Statista. This growth highlights the brand’s growing appeal and market presence in the European region. Subaru’s vehicles are known for their all-wheel-drive capabilities, which resonate well with European consumers who value performance and safety in their vehicles.

Sales in Asia and Oceania

While Subaru’s sales in Asia and Oceania experienced a slight decline of 4.3% in 2020, the brand still sold a significant number of vehicles in the region. Subaru’s sales in Asia and Oceania reached a total of 333,972 units in 2020 Statista. The brand’s strong presence in markets such as Japan and Australia contributes to its success in this region. Subaru’s focus on safety, reliability, and performance continues to attract consumers in Asia and Oceania.

By analyzing Subaru’s global sales and market share, it becomes evident that the brand enjoys a strong presence in various regions worldwide. The United States remains Subaru’s largest market, followed by Europe and Asia/Oceania. This global success can be attributed to Subaru’s customer-centric approach, its strong brand reputation, and the appeal of its vehicles in different market segments. Subaru’s commitment to safety, reliability, and performance has helped solidify its position as a trusted automaker among consumers worldwide.

Subaru’s Manufacturing and Supply Chain Risks

As a prominent automotive manufacturer, Subaru’s manufacturing and supply chain operations play a crucial role in its overall business success. However, there are potential risks and challenges that Subaru faces in this area.

Manufacturing Presence in Japan

Subaru has a strong manufacturing presence in Japan, where it operates several production facilities. While this allows for efficient manufacturing processes and quality control, it also exposes Subaru to certain risks. Disruptions in the supply chain or changes in trade policies can have a significant impact on Subaru’s manufacturing operations in Japan (Source). It is important for Subaru to closely monitor and adapt to any potential changes in order to mitigate these risks and ensure the smooth functioning of their manufacturing operations.

Disruptions in the Supply Chain

Like many automotive manufacturers, Subaru relies on a complex global supply chain to source components and materials for their vehicles. Any disruptions in the supply chain, such as natural disasters, labor disputes, or transportation issues, can affect Subaru’s manufacturing operations and lead to delays or production bottlenecks. Subaru must have contingency plans in place to address potential disruptions and maintain a resilient and responsive supply chain.

Changes in Trade Policies

Subaru’s manufacturing operations in Japan also make it susceptible to changes in trade policies. Shifts in international trade agreements, tariffs, or regulations can impact Subaru’s ability to import and export goods, affecting its supply chain and overall business operations. It is crucial for Subaru to closely monitor and adapt to any changes in trade policies to ensure compliance and mitigate potential risks.

To mitigate these manufacturing and supply chain risks, Subaru should consider diversifying its manufacturing locations to reduce dependence on a single geographic region. This strategy can help minimize the impact of disruptions in one area and provide more flexibility in adapting to changing trade policies. Additionally, maintaining strong relationships with suppliers and implementing robust risk management strategies will enable Subaru to navigate potential challenges and ensure the smooth operation of its manufacturing and supply chain processes.

Subaru’s Focus on Safety and Technology

Subaru has long been recognized for its commitment to safety and innovative technology. In this section, we will explore Subaru’s safety technologies, their goal of achieving zero fatal traffic accidents, and their driver assistance systems.

Subaru’s Safety Technologies

Safety is at the core of Subaru’s brand identity. The company has been honing its unique safety technologies across various areas, including Primary Safety, Active Safety, Preventive Safety, Passive Safety, and Connected Safety. These technologies work together to ensure the safety of both drivers and passengers.

Subaru’s safety technologies encompass features like advanced collision avoidance systems, adaptive cruise control, lane departure warning, blind-spot detection, and rear cross-traffic alert. These technologies aim to prevent accidents and mitigate the severity of collisions, providing peace of mind for Subaru drivers.

Goal of Zero Fatal Traffic Accidents

Subaru has set an ambitious goal of achieving zero fatal traffic accidents by 2030. Through the application of intelligence technologies in the fields of Primary Safety, Active Safety, Preventive Safety, Passive Safety, and Connected Safety, Subaru aims to create a future where fatal traffic accidents are eliminated.

Subaru’s dedication to safety has been demonstrated by consistently maintaining lower rates of fatal traffic accidents compared to the average for major selling brands in the U.S. and other Japanese auto manufacturers for 14 consecutive years. This commitment to safety is a testament to Subaru’s unwavering focus on protecting their customers on the road (SUBARU).

Driver Assistance Systems

As part of their efforts to achieve their goal of zero fatal traffic accidents, Subaru has developed driver assistance systems. Notably, Subaru’s EyeSight technology has been instrumental in enhancing safety on the road. EyeSight utilizes advanced cameras and sensors to monitor the surrounding environment, providing features such as pre-collision braking, adaptive cruise control, and lane-keeping assist.

Subaru continuously improves their driver assistance systems, enhancing features like wider viewing angles and better image recognition capabilities. These advancements aim to further enhance the safety of Subaru vehicles and assist drivers in avoiding potential accidents.

By prioritizing safety and investing in advanced technology, Subaru continues to be a leader in automotive safety. Their commitment to achieving zero fatal traffic accidents by 2030 and their development of sophisticated driver assistance systems highlight their dedication to keeping drivers and passengers safe on the road.

Next, we will explore Subaru’s global sales and market share, shedding light on their presence in different regions and markets.

Subaru’s Electrification Plan

As the automotive industry continues to evolve, Subaru has recognized the importance of embracing electrification to meet the changing needs and demands of consumers. Subaru has recently updated its electrification plan, outlining its commitment to sustainable mobility and the development of battery electric vehicles (BEVs).

Subaru’s Updated Electrification Plan

Subaru has set ambitious targets for its electrification plan, aiming for BEVs to account for 50% of its total global sales by 2030. To achieve this goal, Subaru plans to sell 600,000 BEVs out of its total global sales by that time. This updated plan reflects Subaru’s strong commitment to reducing greenhouse gas emissions and contributing to a more sustainable future.

Target for Battery Electric Vehicles (BEVs)

In line with its updated electrification plan, Subaru has set a target of selling 600,000 BEVs globally by 2030. This represents a significant shift towards electric mobility and highlights Subaru’s dedication to embracing cleaner and more efficient technologies. By focusing on BEVs, Subaru aims to reduce its carbon footprint and contribute to a greener transportation ecosystem.

Production Expansion and Flexibility

To support its electrification efforts, Subaru plans to expand its global production capacity to 1.2 million units per year. This expansion will enable Subaru to meet the growing demand for BEVs and ensure a seamless transition towards electric mobility. Additionally, Subaru is positioning itself to be flexible during the transition period by reorganizing its production in Japan and the U.S., allowing them to take advantage of opportunities as the shift to electrification becomes clearer.

Shift to Battery Electric Vehicles (BEVs)

Subaru’s updated electrification plan signals a clear shift towards BEVs. They plan to launch four additional BEV models by the end of 2028, bringing their total BEV lineup to eight models. This commitment to expanding their BEV offerings demonstrates Subaru’s determination to play a significant role in the electric vehicle market and cater to the increasing demand for sustainable transportation options (Source).

By embracing its electrification plan, Subaru aims to position itself as a world-leading company in both “Monozukuri” (craftsmanship) and “Value Creation.” With a focus on battery electric vehicles and a commitment to innovation and sustainability, Subaru is dedicated to shaping the future of mobility and delivering environmentally friendly transportation options to its customers.

SWOT Analysis of Subaru

To gain insights into Subaru’s strengths, weaknesses, opportunities, and threats, a SWOT analysis can provide a comprehensive view of the company’s position in the automotive industry.

Strengths of Subaru

Subaru boasts several strengths that contribute to its success in the market. These include:

  • Strong Brand Reputation: Subaru has cultivated a strong brand reputation and a loyal customer base, thanks to its emphasis on safety and reliability.
  • Focus on Safety and Reliability: Subaru has positioned itself as a brand that prioritizes safety, incorporating advanced safety technologies like the EyeSight driver assist system. This focus on safety has resonated with consumers and contributed to the company’s market position (Source).
  • Positioning in the Crossover and SUV Market: Subaru has established itself as a leader in the crossover and SUV market, offering popular models like the Forester and Outback. This positioning has allowed Subaru to cater to the preferences of outdoor enthusiasts and gain a competitive edge.

Weaknesses of Subaru

While Subaru has numerous strengths, it also faces certain weaknesses that can impact its market performance. These weaknesses include:

  • Limited Presence in the Luxury Car Market: Subaru has a limited presence in the luxury car market, which puts it at a disadvantage compared to competitors who offer a broader range of offerings. This limitation may prevent Subaru from fully capitalizing on the potential of the luxury car segment.
  • Limited Product Lineup: Subaru’s product lineup is relatively small compared to some of its competitors. While the company focuses on sedans, SUVs, and crossover vehicles, this narrow range of offerings may limit its market reach and potential customer base (Source).

Opportunities for Subaru

Despite its weaknesses, Subaru has opportunities to expand and enhance its market position. These opportunities include:

  • Market Expansion and Diversification: Subaru can explore opportunities to expand its product lineup and enter new market segments to reach a wider range of customers. This expansion could include the introduction of new vehicle models or the exploration of emerging markets (Source).
  • Technological Advancements: As the automotive industry continues to evolve, Subaru can capitalize on technological advancements, such as electric vehicles and autonomous driving features, to stay ahead of the curve and meet the changing demands of consumers.

Threats to Subaru

Subaru faces several threats that can impact its market position and performance. These threats include:

  • Intense Competition: Subaru operates in a highly competitive market, facing competition from other prominent automakers such as Toyota, Honda, and Ford. This competition poses a threat to Subaru’s market share and requires the company to continuously innovate and differentiate itself to maintain its competitive edge (Source).
  • Supply Chain Risks: Subaru’s strong manufacturing presence in Japan exposes it to potential risks associated with disruptions in the supply chain or changes in trade policies. These risks can impact production and distribution, potentially affecting the company’s ability to meet customer demands.

By conducting a SWOT analysis, Subaru can gain a deeper understanding of its internal strengths and weaknesses and external opportunities and threats. This analysis serves as a valuable tool in formulating strategies to capitalize on strengths, address weaknesses, seize opportunities, and mitigate threats in the ever-evolving automotive industry.

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