Subaru Shaking Niche Status With Best Share Gain of Asian Brands

Subaru, the auto unit of Fuji Heavy
Industries Ltd. (7270)
, added the most U.S. market share of any foreign
carmaker last year as the brand long known for quirky all-wheel-drive vehicles continued to win more mass-market fans.

A revamped Forester crossover and new XV Crosstrek wagon
helped boost annual U.S. sales for the unit of Tokyo-based Fuji
26 percent, matching 2012’s gain and ending 2013 with a record
424,683 deliveries. Subaru’s market share rose 0.4 percentage
point to 2.7 percent, an improvement topped only by Ford Motor
Co. (F)
’s 0.45 point increase, according to Autodata Corp.

“Subaru is still somewhat out of the mainstream, but
they’re at that crossroad where they have to decide which
direction they want to go,” said Alec Gutierrez, an analyst at
Kelley Blue Book in Irvine, California. “Do they keep a kind of
cult status or go further into the mainstream?”

Subaru benefited as U.S. auto sales grew 7.6 percent last
year to 15.6 million cars and light trucks, the most since 2007.
A strengthening U.S. economy and improving job market have led
automakers and analysts to forecast further growth in auto
deliveries to at least 16 million new vehicles this year.

The automaker’s sales gained 9.6 percent to 40,172 in
December. Combined U.S. sales of Japanese and Korean autos grew
1.2 percent in December and 6.6 percent for the year.

Toyota Motor Corp. (7203), the world’s largest automaker, reported
a 1.7 percent decline in December deliveries, less than the
average estimate of a 3.1 percent increase from seven analysts
surveyed by Bloomberg. Honda Motor Co.’s sales rose 1.9 percent,
short of the average estimate of a 4.1 percent gain. For the
year, Toyota reported a 7.4 percent increase and Tokyo-based
Honda said sales rose 7.2 percent.

Revamped Pathfinder

December sales for Nissan Motor Co. climbed 11 percent, the
most among the six biggest automakers in the U.S., while
trailing the 13 percent average estimate. The Yokohama, Japan-based company’s deliveries rose 9.4 percent last year, aided by
its Altima sedan and revamped Pathfinder sport-utility vehicle.

“Nissan was probably a company that didn’t get as much
attention as it deserved,” Gutierrez said. “They had their
best ever volume last year, their best year ever for Altima,
Rogue Versa and Pathfinder — 2013 turned into a great year for

Subaru won’t have a third consecutive 26 percent volume
gain in 2014, Tom Doll, president of the company’s U.S. sales
unit, said in an interview yesterday.

“Things will settle down a little,” he said. “We’re
going to grow, of course, somewhere around the 8 to 10 percent
range. Our goal, honestly, is to hold share.”

Rapid Growth

Gains this year will continue to come from the Forester and
Crosstrek, Doll said. Annual volume may grow to as many as
460,000 vehicles, he said.

Supply constraints, with the capacity to build only about
800,000 vehicles globally, limit the company’s ability for
further rapid growth, Doll said.

Subaru’s goal is to maintain a reputation for durable cars
that have a different character from competing Japanese and U.S.
vehicles, said Michael McHale, a company spokesman.

Fuji Heavy Chief Executive Officer Yasuyuki Yoshinaga “has
made it clear that he does not want us to become a Toyota or a
Honda,” McHale said.

Toyota is Fuji Heavy’s biggest investor, with a 16.6
percent stake, according to data compiled by Bloomberg.

Camry Again

Toyota’s sales of 2.24 million Toyota, Lexus and Scion
models were the most since its 2007 record year in the U.S. The
Camry sedan was the top-selling U.S. car for the 12th year in a
row, with sales up 0.9 percent to 408,484. The Toyota City,
Japan-based company’s stalwart family car is under pressure from
Honda’s Accord, Nissan’s Altima and Ford’s Fusion sedan.

“Toyota is coming to terms with a more competitive
landscape,” said Eric Lyman, vice president at ALG, the data
company that helps determine vehicle residual values. “They
didn’t have to worry about the U.S. domestics or the Koreans for
many years, and now they do. That’s particularly true for models
like Camry and Corolla.”

Lexus, Toyota’s luxury line, posted a 12 percent gain last
year to 273,847 cars and SUVs. Yet Lexus still ended up behind
Bayerische Motoren Werke AG’s BMW and Daimler AG’s Mercedes-Benz
in U.S. luxury sales.

Toyota’s Prius, the world’s best-selling gasoline-electric
auto, also missed the company’s full-year goal of sales of more
than 240,000 units. Prius deliveries fell 1 percent to 234,228,
hurt by a 22 percent plunge in December.

‘Solid Number’

“We missed it by maybe a day of sales or maybe a half day
of sales,” Bill Fay, group vice president of Toyota’s U.S.
sales unit, said on a conference call yesterday. “We look at it
as a good solid number.”

Toyota’s 2013 U.S. market share fell 0.1 point to 14.3
percent, according to Woodcliff Lake, New Jersey-based Autodata.

Honda had its second-best year in the U.S., delivering 1.53
million Honda and Acura vehicles. Gains for the Accord, Civic
small car and CR-V crossover weren’t enough to overcome a 10
percent drop in sales of Acura’s premium sedans.

“The RLX and ILX are not quite delivering on expectations
and TL is long in the tooth and not doing much,” Lyman said.
The company’s MDX and RDX sport-utility vehicles “have been
very well received, but the new MDX arrived a little too late in
the year to make up for the car side.”

Tetsuo Iwamura, Honda’s executive vice president, said in
an interview in December that fixing Acura’s sedan lineup has
become a top priority. The company plans to show the new TLX
sedan, a replacement for the TL, at the North American
International Auto Show in Detroit this month.

Retail Customers

The Accord, Civic and CR-V each sold more than 300,000
units in the U.S. last year. Honda also has said at least 98
percent of its U.S. sales are to individual retail customers,
rather than corporate or rental fleets.

“There’s a case that they are more fundamentally sound
than even Toyota,” said Kevin Tynan, a Bloomberg Industries
auto analyst. “It’s all retail for them. And they’ve got these
three models that combined deliver about 1 million units.”

Honda’s market share was unchanged at 9.8 percent in 2013,
according to Autodata.

Combined sales for Hyundai Motor Co. (005380) and affiliate Kia
Motors Corp. (000270)
fell 2 percent in December, missing the average
estimate of a 7.2 percent increase. Deliveries rose 6 percent
for Hyundai and fell 14 percent for Kia, the companies said in
separate statements.

Hyundai’s full-year sales rose 2.5 percent to 720,783
vehicles, a record for South Korea’s largest automaker. The
results were announced a week after Seoul-based Hyundai said
John Krafcik was being replaced as CEO of its U.S. sales unit by
Dave Zuchowski. The carmaker hasn’t provided details on
Krafcik’s departure.

Kia, which shares vehicle platforms, engines and a chairman
with Hyundai, posted 2013 deliveries of 535,179, down 4 percent.

Mazda Motor Corp. (7261) said its sales fell 16 percent to 22,964
last month, while rising 2.5 percent to 283,947 for the year.

To contact the reporter on this story:
Alan Ohnsman in Los Angeles at
[email protected]

To contact the editor responsible for this story:
Jamie Butters at
[email protected]