TOKYO -- Subaru Corp. on Monday reported its lowest quarterly profit in over five years, as North American wholesale volume declined and U.S. incentives rose.
Operating profit at the smallest of Japan's major automakers fell 52 percent in April-June from a year earlier to 57.6 billion yen ($517.38 million).
North American wholesale volume, which comprise about 70 percent of Subaru's total, fell 13 percent to 166,000 vehicles in the quarter, pushing overall global sales 12 percent lower to 237,900 vehicles.
U.S. wholesale deliveries of the compact Forester crossover fell during the period, as Subaru cleared inventory of the outgoing model before the introduction of a full redesign.
The wholesale pullback came even as retail sales increased in the U.S., Canada and Mexico over the three months.
U.S. retail sales advanced 7.8 percent to 173,157 vehicles, Canadian retail volume increased 3.5 percent to 16,571 units, and Mexican retail business grew 5.0 percent to 316 vehicles, according to the Automotive News Data Center.
Subaru has also been increasing buying incentives in the U.S., including for the Forester and midsize Outback crossover, as it tries to expand U.S. market in the face of competition with much bigger rivals. That raised marketing costs in the first quarter.
Higher incentive spending cut 6.9 billion yen ($62 million) off the quarterly operating profit.