SUBARU New Management Policy
On August 2, 2023, Subaru Corporation announced its new management
policy.
While the automotive industry is undergoing a
"once-in-a-century period of transformation," change is now occurring
non-linearly and at an unprecedented pace.
The August 2
announcement discussed how Subaru is responding to these major changes
in the business environment.
Update
Review of STEP Mid-Term Management Vision Efforts
In the “STEP” mid-term management
vision formulated in 2018, which proclaims “Enjoyment and Peace of Mind”
as our unwavering value statement and “Delivering Happiness to All” as
our vision, we declared that we would continue to pursue the “Subaru
Difference,” with the goal of providing customers with emotional value
as well as functional value.
This direction will remain
unchanged under the new management.
In “STEP,” we have made quality enhancement a top priority, focusing our
efforts on strengthening the awareness and mindset of employees as well
as the organizational structure and systems, and we are making steady
progress.
At the same time, with the goal of contributing to
the realization of a carbon-neutral society and achieving our value
statement of “Enjoyment and Peace of Mind,” we have been advancing
Monozukuri1 Innovation by revamping our Subaru
manufacturing.
*1: Monozukuri: Manufacturing
We now see that these efforts have resulted in building a reputation not
only for our products, but also for our company and brand.
On
the product side, we receive top ratings from independent organizations,
such as #1 rankings in the American Customer Satisfaction Index (ACSI)
and Top Safety Pick Plus (TSP+) awards from the Insurance
Institute for Highway Safety (IIHS).
At the same time, our
corporate and brand reputation has grown. As a result of our commitment
to corporate citizenship and social impact through the Subaru Love
Promise initiatives in the U.S., Subaru has been recognized by Forbes as
one of America's Best Brands for Social Impact, ranking #1 in the
automotive category, and has been recognized among the top companies in
the Axios Harris Poll 100 Reputation Rankings for three consecutive
years.
We believe our strong corporate and brand reputation
among the American people, along with these product accolades from our
customers and independent organizations, demonstrate that our efforts
through “STEP” are on the right track, and we value such recognition as
a significant asset for Subaru.
Vision for 2030
However, our business environment is changing rapidly and non-linearly.
We are seeing the rapid shift to electrification in the U.S.,
significant changes in the automotive industry, and the rise and growth
of emerging manufacturers, including those in other industries.
People
have been calling this a once-in-a-century period of profound
transformation for some time now, but we see these non-linear changes
and their speed in recent years as greater than ever before.
In
the following, we will explain how Subaru is responding to these major
changes in the business environment from two perspectives -
“Electrification plan update” and “Determination for 2028.”
Electrification plan update
Previously, the 2030 target was for HEVs and BEVs to account for at
least 40% of our total global sales.
We have now raised the
target to “50% of Subaru's total global sales to be BEVs,” which will be
achieved by selling 600,000 BEVs out of our total global sales of 1.2
million-plus Subaru vehicles.
As we announced in May 2023, total annual BEV production capacity in Japan is expected to be 400,000 units per year from 2028.
- Electric Plan StatusPDF/503kB (announced on May 11, 2023)
- Electric Plan Status (with transcripts)PDF/1.4MB (announced on May 11, 2023)
On the U.S. side, we plan to start U.S. production of BEVs as well as
next-generation HEV models using TOYOTA Hybrid System (THS)
technology.
With the addition of BEV production in the U.S.,
Subaru's total global production capacity will be at the level of 1.2
million units per year.
In this transition period of the
shift to electrification, while keeping a close eye on regulations and
market trends, we will be “flexible” by taking advantage of the
reorganization of our production in Japan and the U.S., and “expand” at
once when the direction of the shift becomes clear. With this concept of
“flexibility and expandability” at the core, we intend to navigate
through these challenging times.
Determination for 2028
As mentioned above, we've decided to significantly update our
electrification sales target and production structure to support those
sales toward 2030.
In our pursuit of these visions, we are
positioning the next five years up to 2028 as a very important period
for us, and under the new management structure, we will work with strong
determination on two key areas: "Monozukuri Innovation" and "Value
Creation".
In this transition period when internal combustion
engine (ICE) vehicles are being replaced by battery electric vehicles
(BEVs), we will strongly promote these key initiatives while
restructuring all key aspects of our monozukuri, from the production
structure to the development process and product planning.
Rather than simply advancing these initiatives, our goal is to become a
world leading company in "Monozukuri" and "Value Creation," so that we
do not fall behind in this era of profound transformation.
We
aim to achieve our “Monozukuri Innovation” and “Value Creation” at an
early stage by shifting our focus and resources to battery electric
vehicles.
In the past, we referred to ourselves as “a group of craftsmen with a
nimble, flexible approach” and introduced a variety of technologies such
as all-wheel drive (AWD) and EyeSight.
As times have changed,
customer preferences have changed, cars have become more complex, and
the areas to be addressed have become more diverse. This has led to
rapid progress in the division of functions, especially in the areas of
product development, production and the supply chain, including
specialization in individual areas and outsourcing of work to
suppliers.
On the other hand, in this once-in-a-century
period of profound transformation, we are now faced with a situation
where we must compete and outperform not only our competitors in the
same industry, but also those in other industries with an entirely new
sense of value.
Through “Monozukuri Innovation,” we will
advance our own high-density monozukuri by becoming “One Subaru,”
encompassing all aspects from product development to production and the
supply chain, which we intend to achieve by leveraging our corporate and
operational scale.
Based on this approach, we will strive to achieve world-leading
monozukuri by cutting the development process and lead time in half, the
configuration and number of parts in half, and the production process
and lead time in half.
In our current operations, each
segmented function, such as product planning, design, and production,
waits for the previous process to complete its work, and then passes the
work on to the next process like a relay. Through our Monozukuri
Innovation initiatives, we will make the process agile, which will lead
to a 50% reduction in Monozukuri time.
At the same time, by
continuously advancing these initiatives, we will reduce the process and
lead time for product development and production in existing domains and
strengthen our ability to respond to “non-linearly transforming domains”
in this age of uncertainty.
At Subaru, making cars has always been about being close to our
customers' lives. Subaru cars have created memories for their owners,
and our customers feel “love” for their cars and for Subaru.
In
the U.S., "love" has evolved into the Subaru Love Promise, the
philosophy and initiatives to which Subaru and our retailers are deeply
committed.
With Subaru products at its core, the Subaru Love
Promise creates a strong bond between Subaru, its customers, its
retailers and its communities. We believe this is a source of our value
creation for society and the future, and we intend to protect and expand
it.
This commitment will remain unchanged in the period of
profound change or in the age of electrification. We will further
enhance the value of our products that are at the heart of this strong
relationship between Subaru, customers, retailers and communities.
An important factor in creating value in the BEV era is to further
enhance “Enjoyment and Peace of Mind,“ the unwavering value that Subaru
offers to customers.
We are sometimes asked whether Subaru
can maintain its strengths and “Subaru-ness” in the BEV era. As one of
our answers, we believe that our long-cultivated AWD capability will be
further enhanced by the precise control enabled by BEV technology,
leading to further enhancement of our strengths; safety and peace of
mind.
In addition, we are pursuing new benefits for our
customers, such as a seamless & stress-free user experience through
the latest technologies. We will also provide further benefits through
our “Retaining Value” and “Continuing to Deliver New-Car Feel”
initiatives, which are based on our desire for customers to have long
relationships with their Subarus while maintaining the value of their
vehicles.We intend to realize these visions with our technologies.
Through
these products and technologies, we believe that our customers can enjoy
the unfading emotional value that comes from spending time with their
Subarus, such as “peace of mind,” “stimulated desire for
self-challenge,” and their vehicles being “always up-to-date.”
As
the shift to electrification progresses, Subaru aims to become even
closer to our customers' lives through these efforts.
Subaru aims to realize these goals in the next 5 years through 2028
under the new management.
We will strive to achieve
world-leading monozukuri by 2028 to enhance our competitiveness. At the
same time, we will pursue value creation while offering our BEVs with
world-leading competitiveness.
In addition to the four BEV
SUVs already announced, we plan to launch four more models by the end of
2028. As a result, Subaru will have a total of 8 models in its BEV
lineup by the end of 2028.
With this BEV lineup, we aim to
sell 400,000 BEVs in the U.S. in 2028. This will account for more than
half of our total U.S. sales.
Cultivating people and organizations that drive innovation
In pursuing our Monozukuri Innovation and Value Creation initiatives,
the driving force is none other than our “people.” The development of
human resources is the source of the company's competitiveness, and
ensure that Subaru will focus our its company-wide efforts there.
Specifically,
we will accelerate our efforts focused on “individual growth,” a
priority of the “STEP” mid-term management vision.
Beyond
“individual growth,” it is also our mission as management to further
develop a corporate culture that fosters “innovation leaders” by
creating a work environment and opportunities for them to play an active
leadership role in driving innovation.
These Innovation
Leaders, as they drive innovation across all functions and divisions and
expand partners to collaborate with them inside and outside their
workplaces, will lead the way in creating processes and technologies
that will set the standard for the new era.
Financial and capital policy
While maintaining financial soundness and stability, we will make
aggressive growth investments to prevail in the age of electrification.
The amount of investment in production and development for
electrification that we have announced is expected to be approximately
1.5 trillion yen by around 2030.
At the same time, we will
implement “shareholder returns that are more conscious of improving
capital efficiency.”
As we pursue the “Monozukuri Innovation”
and “Value Creation” initiatives described in the previous section, our
goal of achieving industry-leading profit margins, as set out in our
“STEP” mid-term management vision, remains unchanged.
Presentation Materials
Announcement on August 2, 2023 :
- Briefing on the New Management PolicyPDF/2MB (announced on August 2, 2023)
- Briefing on the New Management Policy (with transcripts)PDF/3MB (announced on August 2, 2023)
Announcement on May 11, 2023 :
- Electric Plan StatusPDF/503kB (announced on May 11, 2023)
- Electric Plan Status (with transcripts)PDF/1.4MB (announced on May 11, 2023)
Announcement on May 12, 2022 :
- Overview of Domestic Production Reorganization PlanPDF/1.2MB (announced on May 12, 2022)
- Overview of Domestic Production Reorganization Plan (with transcripts)PDF/636kB (announced on May 12, 2022)