Subaru worried about Toyota joint-venture

Posted Mon Apr 21 2008 5:39 PM by Viknesh Vijayenthiran

For many the appeal of Subaru has been its niche status and AWD image but with its latest project – a jointly developed RWD sports car with Toyota – the carmaker is now faced with losing part of that appeal. The new joint-venture, which was announced earlier this month, will see Subaru and Toyota sell rebadged versions of a jointly developed sports car with Subaru responsible for the engineering work and Toyota the styling.

Careful marketing will be the key to success when the car debuts in late 2011, explained Fuji Heavy Industries (Subaru’s parent) chief Mat Nagato during a recent interview with Automotive News. "A potential question could be cannibalization," Nagato said. " We may lose our longstanding territory, or we may lose the great niche brand image. The potential risk is there. We have to be very smart on marketing strategy."

Subaru sells just 7% of Toyota’s total volume and management is wary of the competition it will face from Toyota once both cars are on the market. Nagato said it is unlikely the companies will divide global markets into Subaru-only and Toyota-only domains, so going head-to-head with industry giant will be an uphill battle all the way. Subaru has one advantage in that the new car will be powered by one if its trademark boxer engines.

Engineers are in the early stages of planning the new sports car with the only details confirmed so far is that it will use a front-mounted Subaru boxer engine and a RWD layout. Volume, pricing, design and engine size are still being decided, Nagato revealed.

Reader Comments

Mon Apr 21 2008 8:50 PM
Roy says

This should be pretty easy. If they can persuade Toyota to market this as a Lexus, Toyota's version can cost a fortune but come with leather, etc. Meanwhile, Subaru's version can be a stripped out racer. Even if they can't come up with such a dramatic split, I think that they should look to the marketing of Porsche's 911 in regular (Toyota), 4wd (Subaru) and stripped-out lightweight (Lexus?) versions!
Tue Apr 22 2008 12:45 AM
Eljay says

Money-saving badge engineering is never a good idea when it comes to sportscars.Toyota should give their fans a purely Toyota product,but I guess money's to tight with all the R&D funds going towards developing fiddle-playing robots which of course is much more important than rewarding loyal and dedicated fans...
Tue Apr 22 2008 12:49 AM
MyWheelsOnWalls.com says

Toyota responsible for styling? I would be a very worried Uncle Subaru. Quite friankly Toyota's are about as stylish as a 1980's era Mercedes!!!!

Good luck Subaru!
Tue Apr 22 2008 6:40 AM
Ghidorah says

To help differentiate the 2 couldn't they make Toyota's RWD & Subaru's AWD?
Tue Apr 22 2008 8:14 AM
Alan says

I'm with Ghidorah, they should make it off the same platform with Toyota RWD and Subaru AWD. Furthermore, even if they want to cut cost and make both RWD, i think they should at least have different engine. Subaru is famous for its boxer engines, but Toyota boxer engine?????

What i'd love to see is boxer and AWD in Subaru like the old SVX, and straight 4, light weight RWD in Toyota like AE86

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