Detailed SWOT Analysis of Subaru – A Japanese Automobile Manufacturing Division

Products of Subaru

Subaru has been in the vehicle business for over a century, and its products include:

• Engines Manufacturing
• Assembly and Manufacturing of Cars
• ATVs
• Automobile Components and Parts

Competitors of Subaru

Subaru is one of the oldest car manufacturers and deals with a lot of competition within the market. Here are the top 5 competitors of Subaru:

• Subaru
• Toyota
• Honda
• Nissan
• Volkswagen

Now that we understand the company’s key business, let’s look after the SWOT Analysis of Subaru.

SWOT Analysis of Subaru

SWOT Analysis of Subaru can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of Subaru will also reveal its expansion plans.

To better understand the SWOT analysis of Subaru, refer to the infographic below:

Now first let’s begin with the strengths of the company from the SWOT analysis of Subaru.

Strengths of Subaru

• Traditional Engine: Subaru is famous and known for its 1500cc boxer engine which is also working as standard equipment for mid-size and smaller cars from the year 1996. Other brands also purchase Subaru’s traditional boxer engine which gives Subaru the right of technology patent. 
• Devoted Core of Buyers: Subaru has gained popularity among buyers who are looking for a traditional engine, rough-road capabilities and affordable sports car designs.
• Current Operations: Japan’s Subaru sells 75% of its cars internationally including Canada, Asia, The United Kingdom and the USA. Also, it operates its manufacturing facilities in these countries.
• Motorsports: Subaru no longer competes in the World Rally Championships but the history of Subaru in the World Rally Championships has shown the accountability of the brand. Viewers who were used to watching motorsports were crazy for the sound of Subaru’s 4WD and turbo engine.   
• Technologically Driven: In Japan’s automobile manufacturing industry, Subaru is always ahead and the first to launch new technologies. Whether it is diesel, electronics or EV cars, Subaru is first among the few makers of those models. 
• Environmental Concerned: Recently, Subaru has implemented advanced policies which include using highly recyclable material, recycling, reducing harmful emissions, and educating their employees and customers regarding sustaining the environment.

Weaknesses of Subaru

• The High Attrition Rate in the Workforce: When compared to other organizations in the industry, there is a high rate of attrition in the workforce. Subaru has a higher attrition rate and must spend significantly more on employee training and development than its competitors.
• Liquidity Issues: It has liquidity problems with a low quick ratio; the level of recent assets is less than recent liabilities. It also encounters cash flow problems.
• High Cost of Replacing Existing Experts: Few personnel are in charge of Subaru’s knowledge base, and replacing them will be tough under the current circumstances.
• Working on Only One Segment: Subaru is only focusing on launching cars with sports looks and designs which is not the preference of every customer. Subaru is missing the market where customers prefer premium design sedans and luxury cars. 
• Decreasing Net Profit: Subaru’s net profit has considerably decreased which was JPY 436.65 Billion in 2016 is now only left to JPY 76.51 Billion in 2021. This is an alarm for Subaru to work on its incurring expenses and improving sales using advertising strategies.

Opportunities for Subaru

• Customer Preferences are Fast-Changing: Customers today are more eager to experiment with and test new products in the market, thanks to increased disposable incomes, simple access to information, and rapid acceptance of technical products. Subaru must keep a close eye on trends not only in the automobile sector but also in the changing customer preferences.
• Digitalization: Subaru is implementing digitization in its business using e-commerce, social media platforms and other digital marketing channels at its best. It is also getting new revenue streams through online sales channels.    

Did You Remember? In the introduction, we shared one amazing fact that “Subaru has achieved one of the most searched terms on Google”. The above statistic of the booming waves from 2004 to 2020 is the proof.

Can you imagine that most of the percentage of Subaru sales are coming from online channels? Yes because Subaru is consistently improving its digital marketing strategies such as WordPress website content, SEO, social media marketing, e-commerce and online reputation. You can check Subaru’s official website as an example of how appealing, attractive & fast loading their website is. 

Believe us, learning these digital marketing skills is more beneficial than it appears. Because big companies like Subaru are frequently looking for professionals who can boost their digital marketing game in the market.              

• Technological Developments: Technology succeeds with numerous advantages among many departments. Operations can be automated to diminish costs. Technology enables better data to be obtained from customers and improves trading accomplishments.
• Electric Cars: Subaru has gained a reputation with their electric and hybrid cars. This is also a great opportunity for them. The company should try making these available at lower costs and increase their production for the same so that Subaru utilizes this opportunity to its fullest.

Threats to Subaru

• Competitive Pressures: Subaru’s key competitors are Honda, Toyota, Nissan, and Chevrolet, among others. Renault and Ford are two automobile manufacturers. In each of the local marketplaces, the corporation also confronts some rivalry from regional players.
• Rising Fuel Costs: As gasoline prices rise, people are opting for alternative energy vehicles or green vehicles.
• Increasing Raw Material Costs: The cost of raw materials such as steel is also rising rapidly, making pricing challenging for automakers.
• Technological Developments by Competitors: New technological developments by a few competitors within the industry pose a threat to Subaru. Buyers attracted to this new technology can be lost to competitors, reducing Subaru’ overall market share.
• Exchange Rate: The exchange rate maintains a varying rate and this affects a company like Subaru that has sales internationally, while its suppliers are regional.

This ends our detailed SWOT analysis of Subaru. Let us conclude our learning below.