Topic: Subaru To Start Manufacturing In China as part its core global strategy

[Trainman]

Get your Made in Japan Forester while you can!      

Sell more in China and increase Legacy sales in the US, that is Subaru's core global strategy?

Actually, I don't think there will be any issues for Subaru in NA at this point but down the road, who knows?  And the press are still calling the Forester a car, jeesh   


Fuji Heavy Industries looks to build Subaru cars in China

http://mdn.mainichi.jp/mdnnews/business/news/20090709p2a00m0na008000c.html

Fuji Heavy Industries Ltd. (FHI) is now looking at local manufacturing in China in a bid to boost sales of its Subaru automobiles in the rapidly growing market, a company executive said.

Subaru sales in China, including its mainstay sport-utility vehicle "Forester," have been soaring against the backdrop of the nation's accelerating motorization. FHI, which currently exports all Subaru vehicles for the Chinese market from Japan and the U.S., aims to shift the production bases for the market to local plants through a tie-up with a domestic carmaker.

In addition to expanding sales of its "Legacy" passenger vehicle in the U.S., FHI is focusing on acquiring a larger market share in China as its core global strategy.

"There is no doubt that China is growing into the world's largest market, overtaking the U.S., and we believe that implementing local production is an important step for us to enhance our competitiveness there," said President Ikuo Mori in an interview with the Mainichi Shimbun Wednesday. He emphasized that the company is seeking joint production in the booming market of China's coastal areas with Toyota Motor Corp. -- FHI's largest shareholder -- or a Chinese automaker. "We are now detailing plans for local production of 50,000 vehicles annually," he said.

Mori also revealed that FHI will expand its local dealerships from the 85 operating at the end of 2008 to 100 by the end of this year. The company also hopes to boost sales per dealer by enhancing after-sales services.

Since the company's full-scale entry into the Chinese market in 2004, sales volume has been virtually doubling every year, until peaking in 2008 at 19,010 vehicles. Sales for the first six months of 2009 have already hit year-on-year growth of 67 percent.

With mounting transportation costs and the Chinese government's preferential tax treatment for local manufacturing, FHI believes that early implementation of local manufacturing is essential for the Subaru brand's further success.

[mmret]

I wonder if they'll do so well with the AWD?

If they can't sell them south of the snow belt in the US.....

[Trainman]

I wonder if they'll do so well with the AWD?

If they can't sell them south of the snow belt in the US.....

You'd think the AWD would do well in the more rural areas of China.  And they are relatively simple to work on, again an advantage.

But as for focusing the other part of their global strategy on the Legacy, that does not really make sense.

[mmret]

I wonder if they'll do so well with the AWD?

If they can't sell them south of the snow belt in the US.....

You'd think the AWD would do well in the more rural areas of China.  And they are relatively simple to work on, again an advantage.

But as for focusing the other part of their global strategy on the Legacy, that does not really make sense.

Nobody in the rural areas has the money to buy a car (broadly speaking). And if they did I suspect it would be some sort of utility van, truck, something or other.

Rural incomes are roughly 1/3 to 1/2 that of urban ones, and even among the urban populace it is difficult for most to afford it. Consider that the average (urban) professional makes something between 60 and 100k RMB / yr. A Civic costs around 150k RMB or so (I have the figures in a Chinese edition of C&D somewhere).

Cheapest car (Chery QQ...the clone of the Chevrolet something or other) is still something like $50k RMB.

Combine with the relative lack of prestige associated with the Subaru plate (and prestige is of course important when the cheapest car costs about as much as one years average after tax income)...the lack of snow in any of the major "rich" cities....etc. Doesn't bode well imho. Surely a Legacy would be priced close to a Passat....I know which I'd rather have!

As for the fixing part...I can't speak much for it as I am not mechanically inclined, but I suspect that it would be rather a lot easier to find an expert to work on your VWAG 1.8 liter fwd in the Chinese countryside. Kind of like bringing a Prius to Alaska.