The History of Subaru Corporation

Brand

From Humble Beginnings to Global Automotive Recognition

Subaru, the automotive division of the Japanese conglomerate Subaru Corporation (formerly Fuji Heavy Industries Ltd.), has evolved from a domestic manufacturer into a globally respected brand known for its distinctive engineering and loyal customer base. With a history stretching back to the mid-20th century, Subaru’s journey is marked by innovation, persistence, and an enduring focus on producing vehicles that emphasize safety, durability, and capability in all conditions. This article traces the company’s history from its inception, through its struggles and triumphs, and into its current status as a unique player in the worldwide automotive market.

Origins and Founding (1953–1958)

The story of Subaru begins in post-war Japan. The company’s roots lie in Fuji Heavy Industries Ltd. (FHI), which was officially established in July 15, 1953. The founder most often credited with shaping the company’s automotive direction is Kenji Kita, who served as the first president of FHI.

Founder’s Background: Kenji Kita

Kenji Kita was a Japanese industrialist and engineer with a passion for automobiles. Having worked within the Nakajima Aircraft Company during World War II (a major manufacturer of aircraft for the Japanese military), Kita transitioned into peacetime industry by helping form Fuji Heavy Industries from the remnants of Nakajima. Coming from an aerospace engineering background, Kita believed that Japanese manufacturers should produce their own domestically designed cars, rather than relying on foreign designs or licenses. His leadership and vision led directly to the creation of Subaru’s first automobile.

The First Subaru Car

In 1954, Fuji Heavy Industries completed its first prototype car, called the P-1, later named the Subaru 1500. This vehicle was Japan’s first car to bear the Subaru name (“Subaru” meaning “unite” in Japanese, and also referring to the Pleiades star cluster in Taurus — which inspired the company’s logo). Though only 20 units were produced, the Subaru 1500 laid the foundation for future models.

The first mass-produced Subaru vehicle was the Subaru 360, introduced in 1958. This small, lightweight city car was nicknamed the “ladybug” in Japan due to its rounded shape. The 360 was powered by a tiny two-stroke engine and became extremely popular in Japan’s “kei car” segment, offering affordable transportation during Japan’s economic recovery.

Growth and Expansion (1960s–1970s)

During the 1960s, Subaru expanded its lineup with models such as the Subaru Sambar microvan and truck series, and the Subaru FF-1, which introduced front-wheel drive to the brand’s range. Subaru also began exporting cars to international markets in the late 1960s, with the United States becoming a key target.

Entry into the U.S. Market

Subaru of America, Inc. was founded in 1968 by Malcolm Bricklin and Harvey Lamm. The first model sold in the U.S. was the Subaru 360, priced at $1,297 — making it one of the cheapest cars available at the time. While the 360 was criticized for its minimal safety features, Subaru quickly adapted by introducing larger, more capable models for the U.S. market.

Technological Innovations and Unique Selling Points

One of Subaru’s defining characteristics in the industry is its commitment to symmetrical all-wheel drive (AWD) and boxer engine configurations.

  • Boxer Engine: Subaru adopted the horizontally opposed (flat) “boxer” engine design in the late 1960s. This engine layout provides a lower center of gravity, improving handling stability and crash safety.
  • All-Wheel Drive: Beginning in the 1970s, Subaru started offering AWD across its lineup, eventually making it standard in most models sold in the U.S. from the 1990s onward. This feature distinguished Subaru from competitors, as AWD was typically reserved for trucks or high-end sports cars at the time.

Mergers, Partnerships, and Ownership Changes

Fuji Heavy Industries remained independent for decades but formed multiple alliances:

  • 1999: General Motors purchased a 20% stake in Fuji Heavy Industries, aiming for technology sharing and joint development. This partnership was short-lived; GM sold most of its stake by 2005 after facing its own financial troubles.
  • 2005: Toyota Motor Corporation purchased an 8.7% stake in Fuji Heavy Industries from GM, later increasing its stake over the years. As of 2023, Toyota owns roughly 20% of Subaru Corporation, fostering collaboration on hybrid technology and vehicle platforms.

Hardships and Struggles

Subaru has faced several significant challenges over its history:

  1. Early U.S. Reputation Issues (Late 1960s–Early 1970s): The Subaru 360’s poor crash test results and “cheap” image hurt early sales. Subaru responded by introducing better-built, safer models such as the Subaru Leone.
  2. Economic Recession (1990s): Japan’s “Lost Decade” and a strong yen impacted Subaru’s export competitiveness. The company streamlined operations and focused heavily on markets where it had strong brand loyalty, such as the U.S. and Australia.
  3. Quality Control Issues (2017–2018): Subaru faced scandals over improper vehicle inspections in Japan, leading to recalls and public apologies. The company implemented stricter oversight and retraining programs to address the problem.

Notable Accomplishments

  • Rally Racing Success: Subaru’s dominance in the World Rally Championship (WRC) during the 1990s and early 2000s, with models like the Impreza WRX, boosted its global performance image.
  • Safety Recognition: Subaru has consistently earned top ratings from the Insurance Institute for Highway Safety (IIHS) in the U.S., often leading the industry in crash safety test results.
  • Environmental Initiatives: Subaru’s plant in Lafayette, Indiana, became the first auto assembly plant in the U.S. to achieve zero landfill status in 2004.

Marketing Campaigns

One of Subaru’s most successful marketing strategies in the U.S. was its focus on niche audiences often overlooked by other manufacturers:

  • Outdoor Enthusiasts: Campaigns highlighting AWD and rugged off-road capability appealed to skiers, hikers, and rural customers.
  • LGBTQ+ Inclusion: In the 1990s, Subaru was one of the first automakers to directly target the LGBTQ+ community with advertising — a move that built strong brand loyalty.
  • “Love” Campaign: Launched in 2008, this ongoing campaign emphasizes emotional connections with customers, safety, and community involvement.

Factory Operations

In the U.S., Subaru operates Subaru of Indiana Automotive, Inc. (SIA) in Lafayette, Indiana. This facility assembles models such as the Ascent, Outback, Legacy, and Impreza. The plant emphasizes environmental responsibility, waste reduction, and quality control. In Japan, Subaru’s main production facilities are in Gunma Prefecture, where both domestic and export vehicles are built.

U.S. Consumer Reception

In the United States, Subaru has cultivated a devoted following. Initially known for quirky, economical cars, Subaru’s image shifted toward rugged reliability and safety. Its AWD systems and reputation for longevity make the brand particularly popular in regions with harsh winters or mountainous terrain. Subaru’s sales in the U.S. have grown steadily since the 2000s, with 2022 seeing over 556,000 units sold in America.

First and Latest Models

Latest Sales Figures

Global Subaru sales in 2022 totaled approximately 860,000 units, with the U.S. accounting for roughly 65% of the total.

Most Popular Model

The Subaru Outback is arguably Subaru’s most popular vehicle in the U.S. since the mid-1990s. Its mix of wagon practicality, SUV-like ground clearance, and standard AWD has made it a hit with American families and outdoor enthusiasts.

  • U.S. Sales (2022): About 147,000 units
  • Global Sales (2022): Estimated around 200,000 units

Current Status and Outlook

As of 2023, Subaru remains a healthy, profitable company with strong market share in the U.S., Australia, and parts of Asia. Collaborations with Toyota are expected to yield more hybrid and electric vehicles in the coming years. Subaru’s focus on safety, AWD capability, and niche marketing continues to differentiate it from mass-market competitors.

With EV mandates looming in several states and countries, Subaru plans to release multiple electric models before 2030, while maintaining its core identity around AWD and boxer engines. The outlook for Subaru in the U.S. remains positive, bolstered by loyal customers and a clear brand identity.


From its aerospace origins under Kenji Kita’s leadership to its current position as a beloved niche automaker in the U.S., Subaru has navigated economic challenges, shifting consumer tastes, and fierce competition by staying true to its engineering philosophy and customer-focused marketing. Subaru’s unique combination of AWD, boxer engines, and targeted outreach has earned it a place in the hearts of American drivers — especially those who value safety, reliability, and all-weather capability.

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