Subaru at 50: How AWD, a flat engine and good timing prevailed in the U.S.
By Casey Williams
The stars of the Subaru logo are projected on several veiled Subaru vehicles before a Feb. 8, 2018, Chicago Auto Show event marking the 50th Anniversary of Subaru in North America. (Charles Rex Arbogast / AP)
Subaru had record sales again last year — it's ninth in a row, putting it in a dead heat with Hyundai for the seventh best-selling brand in the U.S., ahead of GMC, Dodge and Volkswagen. It's an impressive climb for a small Japanese brand that started as the butt of a joke when it arrived in the U.S. just 50 years ago.
Subaru's first car, the tiny 360, was called "the most bulbous bubble ever to putt-putt" by Car and Driver. But it delivered the brand to the U.S. in 1968 as Harvey Lamm and Malcolm Bricklin founded Subaru of America.
Subaru shows off a 1968 360 in celebration of the 50th anniversary of Subaru of America at the 2018 Chicago Auto Show on Feb. 8, 2018. (Scott Olson / Getty Images)
Now known as an automotive visionary, Bricklin, who cut his sales chops building and selling a chain of Florida-based Handyman hardware stores, saw the potential in importing small, efficient Japanese cars.
"I bought a contract to bring in the Rabbit scooter from Fuji Heavy Industries (Subaru's parent company) — sold everything they had," Bricklin said in a phone interview with the Tribune. "In 1967, I was told they would no longer be selling scooters. I went to Japan, told them I had been defrauded. While there, I saw the Subaru Star, a small car in development, but it was not ready to meet U.S. standards yet. I also saw the tiny 360 and thought, 'What the heck, I could do something with that.'"
But first, Bricklin had to satisfy Uncle Sam.
"I went to (the National Highway Traffic Safety Administration) and asked for the book on regulations," Bricklin continued. "On the first page it said, 'These rules apply to all vehicles over 1,000 pounds.' The 360 weighed 960 pounds. I asked Fuji, 'If I can bring the car in without meeting regulations, can I have a contract?' They said, 'Absolutely.' I whipped out the exemption and left with a contract."
But a star wasn't born quite yet. The 360 was priced $1,290, or $300 less than a VW Beetle. It was launched with ads that read "Cheap and Ugly Does It." When Consumer Reports thrashed the car in a review, sales plummeted. Bricklin then convinced Subaru to bring the larger front-drive car, the FF-1 Star.
"With the front-wheel-drive models, we started to build a decent reputation," Bricklin said. "Fuji was developing AWD, and as soon as possible, we wanted the whole line to be that."
Bricklin left Subaru in the early '70s to form his own car company, which sold the gull-winged Bricklin SV1 sports car from 1974-76. He more famously began importing Yugos in 1986 and sold his shares in that company two years later for a reported $20 million.
It took a quarter-century after Bricklin's departure for Subaru to fully embrace AWD, but it has become the foundation of its success. Could Bricklin have imagined Subaru selling nearly 650,000 vehicles in 2017?
"No, would never have imagined it," Bricklin said. "They're doing an incredible job. They always had an incredible vehicle, not stylish, but always a safe, well-built, high quality car."
Subaru's first "real" car, the 1970 FF-1 Star, featured the horizontally-opposed "Boxer" engine that's become a Subaru hallmark. Also a feature of Porsches, Boxer engines are flatter, placing mass lower in the chassis to improve handling. The brand's first all-wheel-drive wagon arrived in 1975. Reflecting Bricklin's creativity with the 360, Subaru introduced the tiny BRAT pickup in 1978 with two seats in the bed that allowed it to circumvent the "Chicken Tax" on imported pickups. Bigger things were ahead.
Subaru-Isuzu Automotive opened in Lafayette, Ind., during 1989 to build the midsize Subaru Legacy and Isuzu Rodeo (the facility was later absorbed by Subaru).
By 1993, Subaru's lineup included the advanced SVX coupe plus respected compact and midsize models, but it lacked clear identity and confronted record financial losses. Subaru refocused, making all models all-wheel drive.
"It was a case of the company needing to do something; we were floundering for sales, lacking identity," said Michael McHale, director of corporate communications for Subaru. "We had good all-wheel-drive, but front-drive was not competitive. Around 1996, we had the Legacy wagon, but didn't really have a truck. It just needed more ride height and a tougher look."
Special edition models across the Subaru lineup celebrate the 50th anniversary with Heritage Blue paint, unqiue badging and chrome-colored seat belts and accents. (David J Babb / Subaru )
That look was the Outback, which McHale calls the world's first sport utility wagon. It was the basis for a less popular truck, the Baja in 2002. Few wanted an off-road El Camino with quirky style. Fortunately, for the love of enthusiasts, Subaru amped up its performance portfolio with the WRX in 2001 because larger vehicles weren't selling well, such as the cramped and underpowered three-row Tribeca crossover from 2005-2007.
Fortunes changed along with market preferences with the ensuing Outback and Legacy.
"Up until 10 years ago, we sold 150,000-200,000 vehicles per year," said McHale. "From 2008-2018, we more than tripled sales. It's been quite a ride."
That ride has been enhanced by the popular Crosstrek subcompact crossover and Forester midsize crossover, but challenges remain.
Subaru ranked in the bottom half of JD Power and Associates' 2017 Vehicle Dependability Study, which surveys original owners after three years on defects found in the previous 12 months. Owners reported 164 problems per 100 vehicles vs. a survey average of 156. The predominant complaints centered on confusing infotainment controls, which were remedied with more intuitive systems boasting Apple CarPlay and Android Auto.
And then, there are the slow selling Legacy sedan and BRZ sports car, the latter jointly developed with Toyota. The dull Legacy sedan needs a drastic styling reboot. BRZ is last in its small segment — primarily because it lacks promotion and AWD. It likely won't last long. If you're looking for pickups, expensive luxury cars, convertibles, or minivans, look elsewhere.
That's fine, because the automaker must maintain focus while expanding the brand with vehicles like the new Ascent three-row crossover that looks like a jumbo Outback and is built in Indiana.
There's still one big challenge on the immediate horizon: Owners are reporting long wait times for service appointments.
"As we've grown, we've tripled the number of cars needing service and parts," McHale said. "Dealerships are working to catch up and must get ready for the onslaught of cars that will be aging."
"Subaru has the right products in segments with high volume," said Jessica Caldwell, executive director of industry analysis, Edmunds. "Most have been significantly redesigned lately. They offer something different, which appeals to people. Maintaining growth will be difficult; Subaru is becoming less of an alternative choice. They're now on everybody's radar."
Casey Williams is a freelance writer.