For Subaru of America, Inc. (SOA), although retail unit sales rose thanks to the strengthened Impreza sales, due to the dealerships inventory adjustments focused on the B9 Tribeca, net sales were down by $279M from the previous calendar year. Operating losses worsened based on deterioration of sales volume and mixture mainly due to the inventory adjustments at the dealerships (-$40M), increased incentives (-$50M) {2005: $1,450 to 2006: $1,800}, and higher advertising costs (-$13M), etc. However, due to changes in purchasing prices from FHI and SIA considering a competitive strength in the U.S. market, the operating loss was improved (+$11M) over the previous year.
For Subaru of Indiana Automotive Inc. (SIA), curtailment of production of both Legacy and Tribeca in the second half of 2006 resulted in lower net sales (-$344M). The operating income rose by $53M to $31M, due to deterioration of sales volume and mixture (-$5M), reduced SG&A expenses and others including depreciation +$22M {lower depreciation (+13M), higher die manufacturing cost (-$7M), lower labor costs (+$3M), and overhead, etc. (+13M)}, while impacts of Total-Cost Structure Revolution activities contributed (+$75M), but market conditions and higher parts prices and other items reduced the income (-$35M).