Since I assumed the role of President in 2023, our business environment has changed significantly and at a faster rate than anticipated. Amid a number of concurrent factors, including various policy trends in the U.S., rising geopolitical risks, and soaring raw material and labor costs, these changes can be described as non-linear.
In this environment, I am resolute in my focus as CEO on flexibility and expandability. Respond flexibly to change and expand our efforts in areas where the direction is clear: this is our fundamental approach as we step into the next stage of growth.
On the other hand, disciplined control is essential to ensure that these initiatives based on flexibility and expandability lead to solid value creation rather than devolving into ad hoc responses. We will continue, through disciplined control, to uphold “Enjoyment and Peace of Mind,” the essence of the value we deliver to customers, and the management principle of remaining an organization trusted by society—even as the means and technologies used to realize them evolve over time.
Move forward with flexibility and expandability, while staying true to our core principles through discipline: I believe this very stance is a prerequisite for sustainable growth in these highly uncertain times.

In August 2023, after becoming President, I established “Monozukuri Innovation” and “Value Creation” as the two pillars of the SUBARU New Management Policy. In this once-in-a-century period of profound transformation, competition, including from other industries, is fiercer than ever before and we must rebuild our unique competitiveness from the ground up, independent of scale. At the same time, there are limits to a structure that generates revenue solely at the point of new vehicle sales, and we are also being called upon to shift to a structure that creates value from long-term relationships with customers. To address these management issues, I have advanced Monozukuri Innovation and Value Creation with conviction, viewing them not as separate initiatives but as a single, interconnected strategy that follows naturally from our management resources and corporate culture.
Over the past three years, we have transformed our traditional processes and mindsets throughout SUBARU and thoroughly pursued flexibility. As I visit our workplaces, I have gained a strong sense that collaboration across traditional boundaries is advancing in areas such as development, production, and sales, unlocking previously untapped potential. In November 2025, based on the progress we had seen through these initiatives and rapid changes in the external environment, we announced SUBARU Management Policy 2025, a further evolution of the New Management Policy.
In FYE March 2026, we continued to face challenges in our performance, significantly affected by external factors such as U.S. tariffs. My perspective is that the future remains highly uncertain. Meanwhile, our structural reforms and value creation efforts to date have made solid progress, and we are entering a new stage in building the foundation for our next phase of growth.
In the U.S., our main market, competition is intensifying, but we believe we still have ample room to grow. By steadily strengthening the competitiveness of our existing lineup and expanding our product offerings to fill gaps in market segments, age groups, and sales regions, we will secure a 5% share of the U.S. market and ensure room for further growth beyond that.
In our electrification strategy, we continue to position BEVs as one of the major solutions to realizing a carbon-neutral society, and we are steadily advancing the launch of four BEV models in our alliance with Toyota Motor Corporation and the development of fundamental BEV technologies. Meanwhile, in light of the projected pace of BEV market adoption, we have revised the timing of the launch of our in-house-developed BEVs. This embodies our focus on “flexibility”: carefully assessing market and technological developments while waiting until the last possible moment to make decisions. Precisely because of the technological assets we have accumulated through our development work to date, we believe we can make full use of the additional time gained by holding off on a decision to refine our products, assess advances in battery technology, and strengthen cost competitiveness.

I believe we are able to seriously advance Monozukuri Innovation because our strength lies not in our scale, but in the close connections we maintain with the front lines. Since becoming President, I have visited our worksites time and again, reaffirming my conviction that the answers lie in the field. Each individual has tremendous potential, and when that potential is brought together across departmental and functional boundaries, it gives rise to one new form of value after another. The agility created by our scale is the true source of our unique competitiveness.
One example of tangible results from these strengths is the launch of a mixed production line for BEVs and ICE vehicles at our Yajima Plant in Japan. When I was given an explanation of each initiative actually being implemented in the field, I was surprised by the high standards required for each process. The production line is being reconfigured to make maximum use of existing equipment, processes, and space, with development and production working as one to overcome challenges. The process was more dynamic than I had anticipated, once again making me realize the magnitude of SUBARU’s potential.
Another emblematic example is the entirely different approach to car making that we established by taking on the challenge of developing BEVs in-house. We took on the challenge of agile development using the “Obeya” (large-room) approach, flexibly responding to circumstances without setting a fixed schedule in advance while pursuing the shortest possible development process, and succeeded in bringing products with strong fundamentals to life at a speed that overturned conventional wisdom about development. At the same time, diverse technological assets related to the development process, digital utilization, and BEVs are being created, and these are beginning to flow back to the development of ICE vehicles.
Even as technology evolves, our approach remains consistent. Although software is becoming increasingly important, the value we provide cannot be discussed in terms of software alone. The essence lies, first and foremost, in the basic hardware performance of driving, turning, and stopping, and only with solid hardware can software maximize that value. EyeSight is the fruit of this philosophy, and beyond the accumulation of our technologies lies the value of “Enjoyment and Peace of Mind” that customers experience in their lives. Even as we flexibly adopt new approaches, our commitment to continually refining the essence of this value will never change.

At the heart of our concept of Value Creation is the idea of continuing to deepen the relationships we have built with our customers over the long term and nurturing value together that extends beyond the moment of new vehicle sales. At SUBARU, we are evolving our business model based on the concept of creating a long-term cycle of trust with customers—a “loyalty loop” that extends from the purchase of a new vehicle through after-sales service to the next purchase. While products remain the starting point, we will create value through our relationships with customers. I believe that strengthening this structure is the most important theme that will determine the SUBARU Group’s competitiveness going forward.
This approach is also reflected in our organizational structure. We integrated functions that serve as customer touchpoints, including quality assurance, customer service, and the parts and accessories business, and established the new Customer First Innovation Division in April 2025. This represents an evolution toward a structure that goes beyond responding to problems, connecting customer touchpoints and continuously creating new value while building trust, and is a core initiative in our business model going forward.
Supporting this are the expansion of our technological foundations, including connected services that continuously enhance the customer experience, and the refinement of our brand rooted in empathy. We will expand globally the circle of initiatives that foster a sense of shared values with local communities, as exemplified by the Subaru Love Promise^®, which our U.S. sales subsidiary carries out together with its retailers. We believe that continuing to refine our products, customer experiences, and brand with a consistent approach is at the heart of Value Creation that is uniquely SUBARU. Creating value from our customer relationships themselves and expanding that circle worldwide—this expandability is the driving force that will shape our next phase of growth.

In steadily implementing our growth strategy, the most important foundation is our human resources. By unlocking the potential of each individual who creates value in the field and supporting them in taking on challenges on their own initiative, we will strengthen the execution capabilities of the organization as a whole. During FYE March 2026, we linked goals at every level—from officers to departments, sections, and individuals—to corporate performance and strengthened mechanisms to ensure that each individual’s efforts reliably translate into business results. At the same time, we are progressively expanding the CXO structure, which addresses management issues across functions, and strengthening its role in linking decision-making and execution across departmental boundaries. By enabling talent with diverse experience and perspectives to demonstrate their capabilities and combining their individual strengths into greater organizational strength, we will reinforce the organizational foundation that allows us to continue responding to a rapidly changing business environment. We also believe that advancing DX and IT is important to further enhance and maximize the capabilities of our people and organizations. By making our operations more sophisticated and efficient, we will also develop an environment in which each employee can create greater added value.

Governance and risk management systems provide the discipline needed to ensure that initiatives pursued with flexibility and expandability do not devolve into ad hoc decision-making but instead lead to genuine value creation. In FYE March 2026, SUBARU transitioned to a company with an audit and supervisory committee to balance decision-making that keeps pace with change with enhanced oversight functions. While delegating authority for execution, the Board of Directors has shifted to a structure focused on discussions of important topics, more clearly separating the roles of oversight and execution. We will further enhance the effectiveness of the Board of Directors through site visits by outside directors and candid dialogue on SUBARU’s unique approach to management, while also fully reflecting in the Board’s discussions the insights gained through constructive engagement with shareholders and investors.
In risk management, we leverage our agility by deferring decisions until as late as possible, particularly when uncertainty is high, and making them only after carefully assessing the risks. This management stance, which emphasizes profitability and quality rather than simply increasing scale, serves as a powerful risk hedge in its own right. In addition, in conjunction with the transition to a company with an audit and supervisory committee, we further strengthened the governance framework for executive management. We integrated the corporate governance promotion function and the risk management and compliance function, both within the Secretarial Office, and established the new Governance Risk Management Department in June 2026. By viewing risk and governance in a cross-functional and integrated manner and breaking down barriers between areas, we will simultaneously improve responsiveness to change and the effectiveness of our controls.
Disciplined control is a management practice that does not end once a system is established, but must be continually deepened in response to changes in the environment. It is precisely in these highly uncertain times that I believe such continual reassessment will form the foundation for flexibility and expandability.

Our aim is to link value creation initiatives to sustained enhancement of corporate value. To achieve this, we will pursue improved capital efficiency over the medium to long term, while taking as our basic approach a balanced allocation of capital among three elements: financial soundness and stability, growth investment, and shareholder returns. Amid growing interest in management that is conscious of the cost of capital and stock price, I have become keenly aware, through dialogue with shareholders and investors, of expectations for improved capital efficiency. In FYE March 2026, we have reviewed certain aspects of our capital policy in order to further enhance its effectiveness. Rather than pursuing growth in scale, we will steadily advance toward securing industry-leading profitability by refining SUBARU’s unique strengths and focusing on profitability.
We will curb excessive cash accumulation and allocate capital effectively while maintaining a sound financial base. In particular, I believe it is important to review growth investments in a disciplined, agile, and flexible manner based on a calm assessment of changes in the business environment. One example is our decision to reallocate the development resources we have accumulated to date to next-generation ICE and HEV products in conjunction with the revised timing for mass production of BEVs developed in-house.
With regard to shareholder returns, we will center our policy on dividend on equity (DOE)-based dividends, supplemented by agile measures in response to business performance and market conditions, thereby meeting the expectations of our shareholders and investors. Based on this approach, in FYE March 2026 we decided to repurchase and cancel up to 150 billion yen of our own shares. We will enhance corporate value over the medium to long term by achieving both improved capital efficiency and value creation. We will ensure this progress through dialogue with shareholders and investors.

More than ever, we are embracing the concept of “One SUBARU.” A culture of bringing together our strengths across organizational and regional boundaries—including development, production, and sales—to pursue value creation is steadily taking root. We will foster value in our relationships with all those connected through SUBARU, including customers, retailers, business partners, local communities, employees, shareholders, and investors. This sense of unity is the foundation that will support our future growth.
We will also achieve a “society with kindness and empathy” set out in SUBARU Management Policy 2025 by further evolving this “One SUBARU” concept. The concept of contributing to society through business itself has steadily become an integral part of the SUBARU Group and is being incorporated into our daily operations and decision-making. We believe that cultivating relationships that lead even people who do not use cars to think that SUBARU is a great brand is itself part of value creation.
The structural reforms and value creation efforts we have been making to date are beginning to show steady results. Even amid continued uncertainty about the future, we will draw on the wisdom and a spirit of challenge emerging in the field to move forward with flexibility and expandability, with discipline as the anchor of our management. We will further hone SUBARU’s unique strengths and build an even stronger foundation for the next stage of growth. Going forward, we will meet the expectations of our stakeholders while addressing the enhancement of corporate value and sustainable value creation over the medium to long term.