TOKYO -- Subaru President Tomomi Nakamura is bullish about sales growth in the brand's key U.S. market, forecasting an 11th straight year of record U.S. volume in 2019.
In its home market, however, Subaru is still reeling from a string of final inspection problems that have plagued the company since October 2017. Nakamura says he is committed to setting things straight at Subaru's domestic plants and putting the scandals to rest.
Subaru plans to manufacture 1.03 million vehicles in 2019, an increase of 1 percent from 2018.
That includes record overseas output of 380,000 units, up 6 percent from 2018, the company said Wednesday. The increase is mainly attributed to strong U.S. sales growth.
The Japanese automaker expects global sales to increase 2 percent to 1.08 million units this calendar year. Subaru expects U.S. sales to increase 3 percent to some 700,000 vehicles. The company also predicts a 3 percent increase in Canadian sales over 2018. In all overseas markets combined, Subaru forecasts sales of 930,000 vehicles for the 2019 calendar year, up 2 percent from last year.
At Wednesday's media briefing, Nakamura said Subaru's overall inventory turnover rate stood at 33 days at U.S. dealerships in December, with stockpiles of the Ascent, Crosstrek, and Forester being particularly low.
"Our U.S. dealers said they could sell more. So, I see there is an opportunity (for further growth) in the U.S. market," he said.
But when it comes to ramping up output, Subaru is going to take a wait-and-see approach at least for now. "We will be cautious about production," Nakamura said.
In 2018, Subaru's U.S. deliveries increased 5 percent to a record 680,135, marking 10 straight years of consecutive sales increases.
The company has been deepening its already heavy reliance on the U.S. as its main source of revenue. In Japan, that over-reliance is pejoratively called Subaru's "one-legged batting method."
The U.S.-centered strategy could prove risky if the Trump administration imposes additional tariffs on automobiles and parts imported from Japan. The U.S. government has agreed to withhold additional tariffs while the two countries continue bilateral trade negotiations.
Fumiaki Hayata, corporate senior vice president at Subaru, said the company "is studying" various options to avert a worst-case scenario.
Soul searching at home
In Japan, Subaru is facing tougher times. The company is struggling to put its house back in order after a spate of fuel economy and emissions data violations by uncertified final inspection workers at domestic plants.
While releasing second-quarter earnings results in November, Nakamura admitted that the faulty inspections continued until as recently as October, a month after the company submitted what was supposed to be a final report on the matter to Japan's transport ministry. In the end, Subaru had to recall 530,000 vehicles because of improper inspections. The problems did not affect export models.
Subaru suffered a 16 percent drop in Japanese sales in 2018 compared to 2017, the company said. In December alone, Subaru's new car sales tumbled 23 percent to 9,173, according to preliminary data by the Japan Automobile Dealers Association and Japan Light Motor Vehicle and Motorcycle Association.