Jump to content
Create New...
  • William Maley
    William Maley

    Import Tariffs Will Cause A 'Big Impact' At Subaru

      More that 67 percent of the company's revenues come from North America

    While the Trump administration is still deciding whether or not to put tariffs on imported vehicles, certain automakers are bracing for the worst.

    During a briefing in Tokyo, Subaru is predicting a "big impact" if the U.S. does put tariffs into place.

    “It’s a fact that there would be a big impact from a U.S. tariff increase. We’re studying what the impact might be but there are too many unknowns at this point, so we want to refrain from giving a specific figure,” said Toshiaki Okada, Subaru's Chief Financial Officer.

    Of the 670,900 vehicles it sold in the U.S. through the year that ended in March, about half were imported, including the Forester. The rest of the vehicles - Legacy,  Outback, and Ascent - are built in Indiana.

    According to data gathered by Bloomberg, Subaru would be the hardest hit by tariffs as over 67 percent of their revenues from North America. This is more than Honda (52.5 percent), Nissan (48.9 percent), and Toyota (35.2 percent).

    Source: Bloomberg

    User Feedback

    Recommended Comments

    The Forester is one of their best sellers too.  This would put the nail in the coffin for the BR-Z.  I'm surprised the Toyota numbers are as high as they are, but that must include Lexus as well. 

    • Like 1
    • Agree 1
    Link to comment
    Share on other sites

    Even if the administration gets its wish and more vehicles are built here, the cost of those vehicles is going to be higher.   Not all lines can be flex lines that build any vehicle in a manufacturers portfolio.  It's cheaper to have a line that is dedicated to pumping out Camries than it is to have a line that has to do Camry and Corolla and RAV4 and Prius and......

    Link to comment
    Share on other sites

    I honestly thought Toyota (and perhaps Honda) had fixed that already by having really flexible factories that built multiple vehicles on the same platform. 

    As for Subaru, the tariff issue will not hit them unless those tariffs are applied to Japanese imports.  Most Lexus vehicles, like the BR-Z and Forester, are built in Japan and then imported here.

    Link to comment
    Share on other sites

    10 hours ago, riviera74 said:

    I honestly thought Toyota (and perhaps Honda) had fixed that already by having really flexible factories that built multiple vehicles on the same platform. 

    As for Subaru, the tariff issue will not hit them unless those tariffs are applied to Japanese imports.  Most Lexus vehicles, like the BR-Z and Forester, are built in Japan and then imported here.

    Tariffs on Japanese imports wouldn't make sense... not that making sense is a prerequisite for the latest round of tariffs.

    • Like 2
    • Agree 1
    Link to comment
    Share on other sites

    This is going to be a really interesting watch as Subaru I just read is one of the shortest on lot sits of any automaker. Subarus sit on average of 42 days before being sold in comparison to Fiat the longest of any dealership sitting on the lot for 6 months plus.

    Link to comment
    Share on other sites

    1 hour ago, Suaviloquent said:

    No exceptions, build the damn car here. )

     

    what happened to building them where you sell them? 

    That makes sense if you sell a ton of specific models, but what if you have a few models that can be profitable but sell in such small numbers that it does not make sense to have an assembly plant in every country. Then you would not want that from a business standpoint and just import them. This is where we see a killing off of a wide diverse options in auto's as it does not make business sense to build every auto in every country. Sometimes importing is the better way to go in regards to giving consumers a wide choice to choose from.

    Link to comment
    Share on other sites

    I agree with defelt, if you only had cars for sale in the US that were made in the US you would have a narrow selection of products.  Each auto maker would cut half their line and just build 4 products and you’d just have to go with it, sort of how cars were in Comminist Russia.

    With all this import tariff talk, the Silverado quad cab is made in Mexico, how would GM like a $10,000 tax on top of the Silverado, seems like that would hurt sales and cost jobs at Chevy dealers.   The whole industry will get screwed if these tariffs go into effect.

    Link to comment
    Share on other sites

    13 minutes ago, smk4565 said:

    if you only had cars for sale in the US that were made in the US you would have a narrow selection of products.  Each auto maker would cut half their line and just build 4 products...

    When did this scenario ever come close to happening when all US production was here?

    Link to comment
    Share on other sites

    The Forester sells crazy amounts here, nowhere else as close.

    and we all know why the Envision doesn’t sell. 

    Subaru gets 67% if its revenues from U.S. Not China, not Japan.

    And tariffs would make cars more expensive if you could never substitute domestically manufactured offerings but it sure as hell isn’t inherently 25% more expensive to make parts and assemble them in the U.S.

    Link to comment
    Share on other sites

    On 8/7/2018 at 12:17 PM, dfelt said:

    That makes sense if you sell a ton of specific models, but what if you have a few models that can be profitable but sell in such small numbers that it does not make sense to have an assembly plant in every country. Then you would not want that from a business standpoint and just import them. This is where we see a killing off of a wide diverse options in auto's as it does not make business sense to build every auto in every country. Sometimes importing is the better way to go in regards to giving consumers a wide choice to choose from.

     

    I would not mind if the Envision went extinct, and cars like the CLA that are made in South Africa were gone, and the EcoSport was made an even bigger flop. That would actually be amusing because literally any alternative to those products are vastly better.

    Besides Alfa’s would be toast and would most of Fiat too. Those are brands that add little value to the North American market. 

    Practically every luxury make that imports would have to have more of a manufacturing presence here. 

    When every country that imports from America has high tariff or non-tariff barriers the playing field has to be levelled. And I really do like the administration demanding an exact up to detail measure of just how much a vehicle does contribute to the U.S. economy. 

     

    If Ford got 67% of their revenues from Japan then maybe it’s make fair sense.

    and even the quality of earnings, since China manipulates its currency automakers don’t nearly make as much of a profit due to China.

    Even at double the volume of cars sales America is still a far more lucrative car market compared to Asia Pacific. But no automaker deserves any protection. Go after all of them. The rest of the world does it, and guess what? Automakers bend over backwards there anyways.

    Link to comment
    Share on other sites

    1 hour ago, balthazar said:

    When did this scenario ever come close to happening when all US production was here?

    There was a lot more competition, even when GM had 50% market share.  Back then, even GM divisions were competing against each other.  From the 20s to the 60s, there was extreme competition just in the domestic market

    You had GM with 6 or more divisions depending on which year you counted. 

    You had Chrysler with 5 divisions.

    Ford with 5 divisions.

    Packard - Studebaker

    Nash - Hudson - Metropolitan / AMC

    Kaiser Frazier - Henry J - Willys

    International

    etc etc etc.... and that's before any of the imports.

    Today we have a GM that is down to 4 divisions with relatively little overlap, Ford with just 2, Fiat Chrysler which is a mess except for Jeep and Ram. 

    Today the Ford Fusions has domestic competition from the Malibu, Impala, and Charger (if we're being generous). That's before all of the import competition in that segment.

    I'm not sure I could count the number of competing domestic products for the Ford Fairlane range. Ford had at least 4 competing products from Mercury and Edsel, GM probably had another 6 if we count everything from Chevy to Olds. Another 6 from Chrysler. That is 16 competing nameplates from just 3 companies. 

     

    But once imports started gaining a foothold here, the domestic companies could no longer fund that inefficient style of operation.... did GM really need however many different V8 designs it had in 1958?  I get that some variation is warranted, but a completely different block between a Chevy, Pontiac, Olds, Buick, and Cadillac is just horribly inefficient.  Cut that down to 3 blocks that all divisions can use and change the tuning or cams to allow for brand specific needs.... tada! That's where we are today (5.3 liter, 6.2 liter, 4.2 liter)

    In order to reach that economy of scale, the manufacturers would have to reduce their portfolios to just two or three platforms and try to cram everything on just those platforms. 

     

     

     

    • Agree 2
    Link to comment
    Share on other sites

    Audi for example could leave the US market and still sell 1.75 million cars a year and still make a lot of money.  But that just takes away one choice for the American consumer and the fewer choices people have the lazier automakers can get or the more money they can charge.

    And what if a Chinese company bought GM?  It would only cost like $50 billion and Disney just paid $71 billion to get 20th Century Fox and some tv networks.  These corporations have massive money and can just buy things.  Then do you say the Chinese make all the profits but we will tariff Subaru and kill American jobs.

     

    Link to comment
    Share on other sites

    6 hours ago, smk4565 said:

    ...that just takes away one choice for the American consumer and the fewer choices people have the lazier automakers can get or the more money they can charge.

    From 1960 thru 1969, when there were only 3 luxury nameplates available to the US consumer, the price of the Cadillac Eldorado (actually in a class of 2 as Imperial didn't have a competing model) dropped by 9%.

    Of course, we're in the age NOW where an OEM will raise prices mid year with no changes made to a given vehicle.

    Edited by balthazar
    Link to comment
    Share on other sites

    14 hours ago, balthazar said:

    From 1960 thru 1969, when there were only 3 luxury nameplates available to the US consumer, the price of the Cadillac Eldorado (actually in a class of 2 as Imperial didn't have a competing model) dropped by 9%.

    Of course, we're in the age NOW where an OEM will raise prices mid year with no changes made to a given vehicle.

    That's a bit disingenuous. The Eldorado was a very different car starting in '67. 

    Link to comment
    Share on other sites

    5 hours ago, Drew Dowdell said:

    That's a bit disingenuous. The Eldorado was a very different car starting in '67. 

    It's actually a case the opposite of your implication- the E became a highly stylized & completely unique model, vs. the prior string of largely trim variants ('61-66). It could and should have commanded a notably higher price, ESP once you look at sales.

    Edited by balthazar
    Link to comment
    Share on other sites



    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.


  • google-news-icon.png



×
×
  • Create New...

Hey there, we noticed you're using an ad-blocker. We're a small site that is supported by ads or subscriptions. We rely on these to pay for server costs and vehicle reviews.  Please consider whitelisting us in your ad-blocker, or if you really like what you see, you can pick up one of our subscriptions for just $1.75 a month or $15 a year. It may not seem like a lot, but it goes a long way to help support real, honest content, that isn't generated by an AI bot.

See you out there.

Drew
Editor-in-Chief

Write what you are looking for and press enter or click the search icon to begin your search