Subaru: Striving to Be a Compelling Company With a Strong Presence

At Subaru, our value proposition centers on “Enjoyment and Peace of Mind.” Through our unwavering, earnest, and sincere dedication, we have long been committed to enhancing our technology and services to deliver these core values.

We want to stay close to our customers throughout their lives.

This aspiration has connected Subaru vehicles with our customers’ experiences and memories, extending beyond their role as simply a means of transportation. It is this connection that has led our customers to say, “I love Subaru,” rather than just “I like Subaru.”

In the U.S., the “Enjoyment and Peace of Mind” infused into our car-making has matured into profound feelings and bonds of LOVE and TRUST. This spirit is embraced and embodied in our Love Promise activities, extending these heartfelt connections into broader society.

Such sincere aspirations and efforts to make the world a better place have led us to realize that Subaru’s mission is not merely to manufacture and sell vehicles, but to move forward with our customers and retailers to help nurture “a society with kindness and empathy.”

While the world remains uncertain and the influence of a single company may be limited, Subaru, as a brand recognized in the U.S. for its positive social impact, will continue striving to strengthen its presence and become an indispensable company for people, communities, and society as a whole.

The Core Objective of the New Management Policy

To uphold and achieve our high ideals, strengthening our business competitiveness is vital. At the same time, amid increasing uncertainty, adaptability in responding to change is essential. To achieve this, it was critical for us to adopt an innovative approach that would fundamentally transform our development and production processes.

Under the SUBARU New Management Policy announced in August 2023, we declared that we were steering our focus toward battery electric vehicles (BEVs), based on our belief that taking on the challenge of the unknown field of BEVs would enable us to drive Manufacturing Innovation and enhance our competitiveness. That was the policy’s core objective.

During the two years between the announcement of the SUBARU New Management Policy and the announcement of the SUBARU Management Policy 2025, we thoroughly pursued flexibility in product development and production by transforming our traditional processes and shifting employee mindsets.

Although the market is changing even faster than we initially expected, we are confident in our strengthened capability to respond flexibly to whatever changes may arise going forward.

Thorough Pursuit of Flexibility - Development

The key to flexibility lies in the thorough maximization of product development efficiency. A central factor in this is the expansion of the Integrated ECU (Electronic Control Unit), which we have advanced through our BEV development.

The Integrated ECU serves as the foundation for “Enjoyment and Peace of Mind” by coordinating the next-generation EyeSight, equipped with in-house-developed AI, and vehicle motion control, including AWD control, to perform integrated vehicle motion management. By using a common E/E architecture^*1 centered on the Integrated ECU across BEV and ICE/HEV models, we will significantly enhance product development efficiency.

Additionally, we have been advancing our next-generation vehicle platforms for BEVs and existing ICE/HEV models, designed with expandability through combinations of multiple platforms in mind. This approach is expected to enable an expanded product lineup across multiple segments. Regarding next-generation power sources, in addition to BEVs, we are advancing the development of new engines specifically optimized for electrification.

These technological innovations, combined with enhanced development efficiency, represent our Manufacturing Innovation in product development.

*1 E/E architecture: The vehicle's electrical and electronic configuration; refers to the system design structure connecting ECUs and other components via harnesses

Thorough Pursuit of Flexibility – People and Organizations Driving Innovation

Our pursuit extends beyond just technological innovation and development efficiency.

In our BEV development, we adopted agile development leveraging the “Obeya” approach. This allowed us to flexibly respond to situations,pursuing the shortest possible development process without setting a fixed schedule in advance.
As we continue to apply the speed, flexible thinking, and courage to take on new challenges gained through this experience to ICE/HEV model development as well, we will pursue industry-leading innovation in our development processes.

To make this innovation genuine, the "power of the gemba" (the actual worksite), where proactive, self-driven thinking and action are essential, is critical. To achieve this, we have thoroughly changed each individual's mindset.

“Try first,”
“Make adjustments along the way,”
“Try and take on challenges repeatedly without fear of failure.”

This attitude is now steadily taking root at Subaru’s worksites.
To meet the needs of our diverse customers, we must continue to change ourselves. That's why we are breaking down existing rules and conventions that act as constraints, enabling the workplace to think and act independently in any situation. We are transforming our organization and systems to fully unleash everyone's potential.

Thorough Pursuit of Flexibility - Production

While Subaru has been able to achieve efficient production by maintaining high capacity utilization, the addition of BEVs to production has created challenges that could undermine our strengths in mixed-model and bridge production. To address these challenges, our manufacturing engineers are also participating in the “Obeya” approach, driving further evolution in both vehicle design and manufacturing engineering.

We will produce BEVs and ICE/HEV models on the same lines through mixed-model production. In bridge production, we will further strengthen coordination among production facilities and individual production lines across Japan and the U.S. Through these capabilities, we aim to respond flexibly to fluctuations in global demand and maximize the utilization of our production facilities and workforce.

Moreover, we are advancing logistics reforms to enhance flexibility in our supply chain spanning Japan and the U.S.

Amid this rapidly changing business environment, we will strive to realize super-efficient production by strengthening cost competitiveness while also looking ahead to the implementation of innovative physical AI technology.

Thorough Pursuit of Flexibility - Products

Through the various initiatives undertaken so far, we significantly strengthened our capabilities during the two years between the announcement of the SUBARU New Management Policy and the announcement of the SUBARU Management Policy 2025.

Moving forward, we will extend this strength throughout the entire company, enabling us to respond flexibly and swiftly to rapidly changing market environments, whether it involves BEVs, hybrids, or ICE vehicles.

By accelerating our Manufacturing Innovation initiatives, with next-generation technologies at the core, we plan to significantly expand our product lineup, allowing us to better meet increasingly diverse market demands and customer needs than ever before.

Value Creation: Evolution of “Enjoyment and Peace of Mind”

This section outlines our pursuit of Value Creation.

Many Subaru customers keep their vehicles for years, and it’s becoming more common for one Subaru to be passed from parent to child, continuing the family’s journeys together.

Subaru, its retailers, and customers maintain long-lasting, strong relationships. This connection is reflected not only in high satisfaction with our services and retailers, but also in the strong bonds such as those built through our Love Promise activities, which are unique strengths that set Subaru apart.

That’s why we strive to continue delivering the best “Enjoyment and Peace of Mind” to every single customer, not just through the cars we build, but throughout the many years they spend with their Subaru.

The technological foundation that enables this aim is Subaru’s connected platform and E/E architecture.

Connected services expand our touchpoints with customers, and through advanced data utilization, we can stay more closely attuned to the vehicle’s condition as well as our customers’ voices and experiences.

In addition, by combining these technologies with our retailer network, we can enhance the ownership experience, not only through OTA^*2 software updates after purchase but also through hardware updates performed by our retailers.

By expanding functionality through the integration of technologies and services under our “Retain Value” initiatives, Subaru will continue to deliver the best “Enjoyment and Peace of Mind” to every single customer. This is something only Subaru can achieve, thanks to the deep connections among our customers, retailers, and products.

*2 Over-the-Air (OTA): Technology that enables vehicle software to be updated remotely via wireless communication

Driving the Subaru Difference

The market outlook remains highly uncertain.
Even in such times,we want customers to continue choosing Subaru, whether it’s a BEV, hybrid, or gasoline model.

This is why we believe it is essential to drive the Subaru Difference and further strengthen our brand’s presence.
However, we are not seeking to become a premium brand.
Rather, our goal is to be a brand that stands by our customers throughout their lives, and our brand strategy focuses on further highlighting the identity of Subaru that resonates with, and is trusted by, our customers.

At the 2025 Japan Mobility Show, we brought this concept of “Driving the Subaru Difference” to life through two symbolic experiential worlds that represent the spirit of Subaru: Performance and Adventure.

On the surface, Performance and Adventure may seem like opposites.
Those drawn to Performance are people who deeply understand and appreciate technology, while those attracted to Adventure cherish time spent in nature and with family.
These worlds might appear separate, yet in communities and events where Subaru owners and fans gather, they coexist with mutual respect.

This reflects how Subaru embraces many different forms of love. At the heart of both worlds lies something unchanging: “Enjoyment and Peace of Mind,” the enduring value Subaru has long been committed to pursuing with sincerity, integrity, and unwavering persistence.

At the 2025 Japan Mobility Show, we showcased the STI and Wilderness models as icons of the Performance and Adventure worlds.
However, our true aim goes beyond simply featuring these scenes. It is to elevate the Subaru brand itself by continuing to pursue “Enjoyment and Peace of Mind” as the foundation and by highlighting the Performance and Adventure worlds.

Meanwhile, we will also carry this Subaru brand worldview across every touchpoint with customers, from accessories and merchandise to motorsports and fan events, offering a consistent customer experience with the aim of building it as a strong revenue foundation as well.

Strengthening the Resilience of the Business Foundation

Finally, we will discuss our approach to strengthening the resilience of our business foundation.
Amid today's challenging business environment, Subaru is united as one team to overcome adversity.

To counteract the impact of U.S. tariffs, we have launched a company-wide cost reform initiative called “Cost Innovation 20-30” (“Genka-Ishin 20-30” in Japanese), aiming to achieve annual cost reductions at the level of 200 billion yen.
In this project, by working closely with our suppliers from the early design stages of new vehicle development and fully leveraging the outcomes achieved through Manufacturing Innovation, we are taking on an unprecedented challenge in cost transformation that goes beyond conventional boundaries.

At the same time, we will strengthen our revenue foundation.

By significantly expanding our product lineup to meet the diverse needs of customers, we aim to achieve a global sales goal at the level of 1.2 million units annually in the first half of the 2030s.
In parallel, through our brand strategy and our "Retain Value" initiative, we are enhancing profits across the entire value chain.

Through these collective efforts, Subaru will continue to strive for industry-leading profitability.

We will now outline our investment strategy to support future growth.

Our basic premise remains unchanged: BEVs will play a central role in the medium to long term. However, considering the increasing demand for HEVs and the reassessment of internal combustion engines, we believe it is appropriate to delay the timing of full-scale investment in BEV mass production.
Consequently, we have decided to thoroughly reevaluate and reallocate the previously planned 1.5 trillion yen electrification investment to include enhanced development and production of next-generation ICE and HEV models, beyond just BEVs.

Specifically, to expand our product lineup in response to diverse customer needs, we will strengthen R&D for next-generation ICE/HEV models, while continuing our ongoing R&D efforts for BEVs as well.
Although overall R&D spending is expected to increase, we will leverage the technologies and expertise we have cultivated through our Manufacturing Innovation initiatives to achieve more efficient development. This approach will enable us to effectively manage and restrain any substantial increase in investment levels.

In terms of production, we will pursue a flexible and efficient manufacturing framework through mixed-model production, while carefully assessing the timing of capacity expansion and scale growth.

Based on the above, the total investment will remain essentially at the originally planned level, with optimized allocation to ensure our investments contribute directly to business growth in the coming years.

SUBARU Management Policy 2025 Presentation

• SUBARU Management Policy 2025 (with transcripts)