Why the 2015 Outback Is Critical to Subaru's Success

Subaru's CEO explains why the U.S. market -- and the all-new Outback -- are so important to his company.

Jun 9, 2014 at 6:15PM

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Fuji Heavy CEO Yasuyuki Yoshinaga, right, posed for photos with Subaru's U.S. chief Tom Doll and an all-new 2015 Outback at the New York International Auto Show in April. Source: Subaru

Subaru announced last week that its all-new 2015 Outback would start at $25,745, a price that puts it just about $100 above the starting price of the outgoing model.

That's a tiny increase for an all-new model, but Subaru says it's hoping that the new Outback will increase its sales.

That's not to say that Outback sales have been bad -- not at all. It has lost some sales recently to Subaru's own Forester, which was new last year. Forester sales are up over 50% so far this year, while the (outgoing) Outback's are up a little over 4%.

But for much of its life, the Outback has been Subaru's best-seller in the U.S. -- and the U.S. is Subaru's most important market, accounting for about half of its global sales last year.

Subaru is the automotive division of Japan's Fuji Heavy Industry (NASDAQOTH:FUJHY). It's a much smaller company than Japanese rivals Toyota (NYSE:TM) and Honda (NYSE:HMC), with a much more limited model range. But the company updates and refreshes that model range exceptionally well, and its endearing, long-lived products have earned it fierce customer loyalty. 

Subaru's careful approach to updating its products has worked out very well for Fuji Heavy and for its shareholders. The stock isn't well-known in the U.S., but maybe it should be: Over the last two years it has risen more than 250%. 

Subaru revealed the new Outback at a big event at the New York International Auto Show in April. We were there, and we got a close-up look at the new Outback and spoke to some of the people responsible for it. 

We also captured much of the presentation on video to share with you. In the segment below, the second of three parts, you'll see Fuji Heavy CEO Yasuyuki Yoshinaga, who -- in a sign of the importance of the Outback to Subaru -- came all the way from Japan for the unveiling. Speaking carefully in English, Yoshinaga lays out the numbers to explain why the U.S. market is so important to Subaru, what has made Subaru successful here, and how Subaru will continue to invest to build on its success in the U.S. 

You can see part one of this series here. Check back Tuesday evening for part three.

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John Rosevear has no position in any stocks mentioned. Rex Moore has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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