Concentrating on North America, all-in on crossover SUVs (2005)

Management that bets on a single market

Subaru’s concentration on North America was a near-gamble by which a resource-poor mid-size maker chose to survive. Not the home market and not Europe, but the single market of North America, where demand for SUVs and crossovers was large — there it gathered its development, its production and its sales. It was a decision to avoid fighting on all fronts and narrow instead to a ring it could win in, and it took shape over several years, from making SIA wholly owned in 2003 to launching the Tribeca in 2005.

This single-point concentration carries great fruit and its flip-side danger together. When North America grows, earnings jump; but the whole company is then exposed to one market and its currency swings, and to any stall in local demand. The later problems over final inspections and the lag into electrification are not unrelated to the slack that success-by-North-America bred inside the company. Even so, in deciding early where to gather its limited resources, this choice still defines Subaru’s character today.