Subaru in Capacity Crunch as 600,000 U.S. Sales ‛Feasible’

OAK BROOK, IL – Production at Subaru’s Lafayette, IN, plant is “maxed out” and likely will stay that way for another two years.

“We won't have more production capacity to get more product until 2016,” Subaru U.S. spokesman Dominick Infante says at a Midwest Automobile Media Assn. luncheon here.

That is the year production of the Toyota Camry sedan at the Subaru of Indiana Automotive plant in Lafayette will cease.

The Camry exit will free up 100,000 units of capacity for Subaru vehicles, likely “more Outbacks and Legacys,” he says of Subaru’s midsize CUV and sedan, both of which are new for ’15. “We'll also add some Imprezas as well as the replacement for the Tribeca (large CUV), though it won't be called Tribeca, at Indiana in 2016, too.”

Subaru parent Fuji Heavy Industries earlier announced a plan to build its Impreza compact car in Indiana by adding another 100,000 units to the Camry line, boosting that line’s capacity to 200,000 units annually. With another expansion in progress, to boost straight-time capacity from 156,000 to 180,000 units annually, total plant capacity should reach 400,000 by 2016.

WardsAuto data shows Subaru assembled 137,803 cars and 128,363 light trucks at Lafayette in 2013.

In the meantime, Infante says it is possible Subaru might be able to alleviate its capacity crunch by getting “a few more Imprezas from Japan,” where the car currently is assembled for U.S. sale.

The expected 400,000 units of annual capacity at Lafayette, plus imports of Japan-built BRZ sports cars and XV Crosstrek and Forester CUVs, will make 600,000 annual sales in the U.S. feasible in the not-too-distant future, Infante says, noting this year Subaru plans to hit the half-million mark.

“We sold more than 400,000 vehicles last year and look to pass 500,000 this year.”

Subaru’s U.S. sales, which skyrocketed from 187,208 units in 2007 to 424,683 in 2013, are riding high again, up 17.9% through July to 283,722.

Heavy demand for the ’14 Forester and Outback and anticipated demand for the redesigned ’15 Outback and Legacy are prompting the optimistic outlook, Infante says.

“Our average days’ supply of inventory for the full line is under 30 days,” he says, noting at the model level it ranges from only a 13 days’ supply for the WRX, STI and Outback, to 34 days for the XV Crosstrek. “We're selling everything we build.”

Infante says among the reasons Subaru is doing well is that it is taking advantage of consumers switching out of larger SUVs and cars in favor of smaller, higher-mileage CUVs, adding Ford, Volkswagen and Mazda vehicles are being traded in for Subarus.

 “And the higher fuel economy without any penalty for offering all-wheel drive is a huge factor in consumers moving into a Subaru,” he says.