Subaru exec shuffle: New CEO pledges electrification flexibility; Doll to step down as U.S. chief

Editor's note: Subaru’s U.S. sales rose 1.3 percent to 90,163 vehicles through February. An earlier version of this story misstated the total.

TOKYO – Subaru has appointed Atsushi Osaki as its next CEO, tasking the manufacturing chief with steering the small-sized Japanese automaker through a challenging era of electrification, automated driving and industry upheaval as it strives to rekindle U.S. sales.

The next boss, speaking at a Friday press conference, said that flexibility and expansion will be key focal points of his tenure. Subaru will be flexible in quickly responding to market trends, such as electrification. And it will seek to grow in the U.S. and new markets such as Australia.

“We at Subaru want to survive the age of electrification by being nimble,” Osaki said. “We will put various systems in place while focusing on flexibility and expansion.”

In addition, Subaru of America announced Tom Doll will step down as CEO and assume a role as corporate adviser at the company’s U.S. headquarters in Camden, N.J., effective April 1.

Jeff Walters, currently senior vice president of sales, will be promoted to president and COO. Walters has more than 30 years of experience with Subaru of America. Prior to that, he was vice president of field operations. He also held roles as director of field operations, regional sales manager and brand strategy manager.

The U.S., which constitutes Subaru’s biggest market by far, still holds lots of potential, Osaki said. “I believe we can still grow our sales in the U.S.,” he said.

“We also receive a lot of customer inquiries from Japan, Asia, Australia and Canada as well,” he said. “At the moment, we are unable to meet such potential demand due to chip shortages, but we will work to resolve such issues and seek to further increase our sales globally.”

Osaki, 60, most recently served as global production chief but has a long background in quality assurance, serving as the chief quality officer in recent years to root out quality problems.

He takes office in June, joining a reconstituted Subaru board, pending approval at the annual shareholder meeting traditionally held in June.

Current CEO Tomomi Nakamura, 63, will become chairman under the wide-ranging management shuffle announced in Tokyo.

Nakamura took the helm in 2018 during a difficult period for the all-wheel-drive specialist brand. At the time, Subaru was besieged by a vehicle inspection problem in Japan that hurt the brand’s image in the domestic market. And mushrooming quality problems led to embarrassing recalls, while marring critical product launches, such as the Ascent large crossover.

He made quality improvement a top priority of his tenure and implemented sweeping reforms to relieve production pressure on overburdened factories.

Osaki was tapped to spearhead that quality initiative as the chief quality officer in 2018.

A graduate of Tokyo University of Agriculture and Technology, the Tokyo native joined Fuji Heavy Industries, as Subaru was previously called, in April 1988.

At the Tokyo press conference, Osaki said one of his pastimes is eating ramen.

Subaru said Osaki is charged with devising a new midterm plan to follow the five-year road map formulated in 2018 that concludes this year.

“In the medium to long term, we are in a once-in-century tumultuous time in the automotive industry,” Osaki said. “Even in our main battleground, the U.S. market, it is still unclear and hard to determine how electrification will go from here. There is nothing we can do about uncertainty, so we will try to respond to changes in the market environment flexibly.”

Doll's long tenure

Doll, 68, the senior-most executive in the company, joined Subaru of America in 1982. He held a series of executive positions, starting in accounting, then business and strategic planning, before becoming CFO. In April 2009, he was promoted to the role of COO and in 2013 he became president of Subaru of America, historically the top position in the Japanese automaker’s North American operations. In June 2018, Doll was promoted to president and CEO of Subaru of America.

Last month, speaking at a luncheon at the Chicago Auto Show where the company had revealed its redesigned Crosstrek, Doll reminisced about his early days with the small Japanese automaker, its frequent “cycles of adversity” and its “David and Goliath” fight to carve out a niche for itself amid much larger rivals.

Of his first day at Subaru, Doll, a former accountant for Arthur Young and Co., said they weren’t even expecting him. “I just show up for work, and nobody greets me and they’re not anticipating I’m even supposed to start on that particular day. And I thought I had made a mistake.”

He said he phoned his former boss at the accounting firm and asked for his old job back. He was wisely told to call back in two months, and if he still wanted to return, he could.

Doll, of course, never did. Subaru of America’s U.S. sales were as low as 100,000 vehicles a year in a period Doll called the company’s “valley of despair” between 1986 and 1994. But beginning in 2008, Subaru set 12 consecutive years of U.S. sales records, topping 700,000 for the first time in 2019, before pandemic-related supply disruptions shrank the company’s manufacturing abilities.

“When I started with the company, the stock price was $3 a share and I remember saying to my wife, ‘We should try to buy as much of it as we can.’ But I didn’t have any money, I wasn’t rich and I wasn’t good looking,” Doll said. “The price of the stock over the years increased to over $300 a share, and it did that twice, and the company split the stock six times along the way.”

Doll walked through a series of crises over the course of his long career, including several financial disasters, the 2011 Japanese earthquake and tsunami, and finally COVID.

He said Subaru weathered each of these events and ultimately came out stronger by focusing on the fundamentals, including its network of retailers in the U.S.

“So how did we survive all that? Well, we focus on the details, and we use a simple philosophy that so many businesses I think seem to neglect: We focus on the fundamentals and review them every single day with discipline. And the fundamentals that we focus on are the customer experience in sales and service,” Doll said.

Challenges grow

Under Nakamura’s watch, hot demand for Subaru products drove U.S. sales to record highs. Then the pandemic and ensuing semiconductor crunch torpedoed volume.

In 2020, the automaker fell short of achieving an astounding 12th straight year of record U.S. sales when deliveries dropped 12.6 percent. Last year, U.S. volume dipped 4.7 percent to 556,581 vehicles, far off the all-time high of 700,117 achieved in 2019 before COVID-19 gripped the world.

With supply coming back online, Subaru’s U.S. sales rose 1.3 percent to 90,163 vehicles through February.

Nakamura strengthened ties between Subaru and its biggest shareholder, Toyota. In 2019, Toyota increased its stake in Subaru to 20 percent, while Subaru took a smaller reciprocal stake in Toyota. That led to increased cooperation, including the joint development of Subaru’s first full-electric crossover, sold as the bZ4X by Toyota and the Solterra by Subaru.

Known as an EV skeptic, Nakamura often asked if demand was really that strong for EVs, especially in North America, Subaru’s most important market.

But last May, Subaru acknowledged increasing interest in the technology and announced plans to add a dedicated in-house EV assembly plant in Japan from about 2027. The push was part of a multibillion-dollar investment in electrification over five years.

Last month, Subaru said it will ramp up its electrified offerings in the U.S. to include several battery EVs by 2025 as it shifts development focus to the segment.

In handing the baton to Osaki, Nakamura acknowledged the emerging challenges.

“The pressing issues, such as chip shortages and response to electrification, are not at all easy to deal with,” Nakamura said. “We need to explore what would be the best way to develop battery-electric vehicles, and there is also the issue of battery procurement.”

Omari Gardner contributed to this report.