The History of Subaru of America

Written by Chloe Harwood

The Beginning

The company was founded on February 15, 1968 by two American businessmen: Malcolm Bricklin and Harvey Lamm.  Bricklin formed Subaru of America, Inc. (SOA) in order to sell Subaru franchises and hired to run the business.

The very first Subaru ‘office’ was in fact a small rental unit in Balboa Park, California, which Lamm set-up in 1967. The following year, Subaru of America was officially established in Bala Cynwyd, Pennsylvania before moving to larger quarters in Pennsauken, New Jersey in 1970. The headquarters moved to its current Cherry Hill, New Jersey location in October 1986.

Meaning of the Subaru Name
Fuji Heavy Industries traces its roots to the Nakajima Aircraft Company, a leading Japanese aircraft manufacturer. By 1950, Nakajima was known as Fuji Heavy Industries and FHI was incorporated on July 15, 1953 when five Japanese companies, known as Fuji Kogyo, Fuji Jidosha Kogyo, Omiya Fuji Kogyo, Utsunomiya Sharyo and Tokyo Fuji Sangyo, joined together. The company logo is the cluster of six stars recognized by the Japanese in the star constellation Pleiades.

First models
The first Subaru, the 360, reached the United States in May 1968. Priced at $1,290, it was $300 cheaper than the similar-looking Volkswagen Beetle and was 1,000 pounds lighter. This made it exempt from federal safety standards. In contrast to the company’s modern reputation for safety, Consumer Reports rated the 360 as ”unacceptable”, which quickly affected sales.

According to Winner Subaru of Dover, DE the Consumer Report review and slow sales lead to the development the FF-1. The front-drive FF-1 was handy for driving in snow and gave Subaru a new market position as the first Japanese manufacturer to feature front-wheel drive, as well as the first Subaru vehicle to have the horizontally-opposed “boxer” engine.

The 1973 Oil Crisis helped the makers of small cars, and Subaru was no exception. However, Subaru then suffered from Yen/Dollar exchange rate changes which forced FHI to raise prices with a resultant sales drop.

In 1981, the company was a beneficiary of a MITI trade agreement between Japan and the U.S. whereby Japan agreed to limit the number of cars sent to the United States. With supply restricted, Subaru raised the average price of its cars from $6,000 to $8,000. At this time SOA became highly profitable.

1989 – Manufacturing in the U.S.
In 1989, Subaru, together with Isuzu opened a factory in Lafayette, Indiana called Subaru-Isuzu Automotive, Inc., or SIA. The plant is currently operating at its highest-ever capacity and produced close to 350,000 Subaru vehicles in 2017, including the Legacy, Outback and Impreza models.

1995-2005 – Many changes
In 1995, in response to the growing trend for SUVs, SOA launched the Outback – the “World’s First Sport Utility Wagon” supported by a marketing campaign using Crocodile Dundee actor, Paul Hogan.

General Motors took a 20 percent share in FHI from 1999-2005. In 2004, GM’s subsidiary Saab sold a version of Fuji’s Subaru Impreza – the 9-2x – built by FHI in Japan.

The introduction of the WRX to the U.S. in 2001 revived attention in the brand. In 2002, looking to further expand its offerings, the company developed the Baja model, an open bed pick-up, based on the Legacy.

2006-2017 – Major growth
Subaru reported record-breaking sales of 647,956 vehicles for the 2017 calendar year; an increase of 5.4 percent over the previous annual record of 615,132 vehicles set in 2016. This is the ninth consecutive year of record sales for Subaru of America and tenth consecutive year of sales increases.

About the author

Chloe Harwood