Subaru targets sun belt states despite rising costs

Bloomberg

Peaking demand, sky-high sales incentive costs, threats of a border tax — none of these are distracting Subaru from its marketing and growth ambitions in its biggest market.
“America is the pillar,” Yasuyuki Yoshinaga, chief executive officer of Fuji Heavy Industries Ltd., which owns the Subaru brand, said in an interview Thursday. “It’s true we want to increase sales in other countries, but in terms of the place with the best chance to increase sales, it has to be America’s sun belt” states in the south.
The company, which will change its name to Subaru Corp. from April 1, already gets in excess of 60 percent of its sales from the US, something Yoshinaga readily admits is a “poor balance.” But he argues that Subaru must harness the brand power it has cultivated in the US, rather than divert its resources to cheaper, margin-eroding products for emerging markets. That’s something that a small automaker like Subaru can ill afford, given the increasing investments required to develop clean-energy and autonomous-driving technologies. To survive alone, “there’s no other way for us than” to concentrate on the US, he said. Subaru is connecting with US car buyers both with its product lineup and unorthodox marketing strategy. Sales growth is being powered by its Outback crossover and refreshed Impreza compact. The brand has also created buzz with witty, socially conscious ads that target outdoor enthusiasts and millennials.