Subaru’s looking good with a healthy increase in new car sales. Not only has this been a tough environment for car manufacturers recently with a strong Yen hitting the Japanese manufactures in particular, but also for car buyers. Retuers recently reported that Subaru is now seeing higher transaction prices for their vehicles within the US. That simply means that the final cost of what consumers pay has gone up, after all incentives, deals, bargaining and trade-ins.
Fuji Heavy Industries (FHI), the parent company of Subaru, had been estimating that for the quarter between April and September, they would see about a 15 percent increase in their sales. However, they have said that these sales actually jumped a full 27 percent. They also said that this increase in sales have come without much in the way of incentives – an amazing feat.
Subaru Overcomes Troubles
It is also not a secret that Subaru has had some difficulties recently. China has become an increasingly larger market for the company, making up about 7 percent of its total sales. So, when a recent wave of anti-Japanese sentiment spread over the country, many thought that this would be a financial disaster for Japanese car makers. They did see a decline in sales of 64 percent in China as a result of this, but their relatively small overall exposure to the Chinese market reduced the impact of this event.
It does seem that what was lost in markets like China have been more than made up for in others particularly the US. However, it does seem that when Subaru announces an earnings estimate increase of 34 percent ($401 million to $539 million), this is exciting news which is encouraging for a manufacturer who operates in a relatively narrow niche.
It will certainly be interesting to see more details on these numbers when Subaru releases their second quarter earnings next week.leave a response, trackback from your own site