Subaru picks new CEO who pledges flexibility in electrification age

TOKYO – Subaru has appointed Atsushi Osaki as its next CEO, tasking the manufacturing chief to steer the small-sized Japanese automaker through a challenging era of electrification, automated driving and industry upheaval as it strives to rekindle U.S. sales.

The next boss, speaking at a press conference on Friday, said that flexibility and expansion will be key focal points of his tenure. Subaru will be flexible in quickly respsonding to market trends, such as electrification. And it will seek to grow in the U.S. and new markets such as Australia.

“We at Subaru want to survive the age of electrification by being nimble,” Osaki said. “We will put various systems in place while focusing on flexibility and expansion.”

The U.S., which constitutes Subaru’s biggest market by far, still holds lots of potential, he said.

“I believe we can still grow our sales in the U.S.,” Osaki said.

“We also receive a lot of customer inquiries from Japan, Asia, Australia, and Canada, as well,” he said. “At the moment, we are unable to meet such potential demand due to chip shortages, but we will work to resolve such issues and seek to further increase our sales globally.”

Osaki, 60, most recently served as global production chief but has a long backround in quality assurance, serving at the chief quality officer in recent years to root out quality problems.

Osaki takes office in June and joins a reconstituted Subaru board that month, pending approval at the annual shareholders’ meeting traditionally held in June.

Current CEO Tomomi Nakamura, 63, will become chairman under the wide-ranging management shuffle announced in Tokyo.

Nakamura took the helm in 2018 during a difficult period for the all-wheel-drive specialist brand. At the time, Subaru was besieged by a vehicle inspection problem in Japan that hurt the brand’s image in the domestic market. And mushrooming quality problems led to embarrassing recalls, while marring critical product launches, such as that of the Ascent large crossover.

Nakamura made quality improvement a top priority of his tenure and implemented sweeping reforms to relieve production pressure on overburdened factories.

Osaki was tapped to spearhead that quality initiative as the chief quality officer in 2018.

A graduate of the Tokyo University of Agriculture and Technology, the Tokyo-native joined Fuji Heavy Industries, as Subaru was previously called, in April 1988.

At the Tokyo press conference, Osaki said one of his pastimes is eating ramen.

Subaru said Osaki will be charged with devising a new mid-term plan to follow the five-year roadmap that was formulated in 2018 and concludes this year.

“In the medium to long term, we are in a once-in-century tumultuous time in the automotive industry,” Osaki said. “Even in our main battleground, the U.S. market, it is still unclear and hard to determine how electrification will go from here. There is nothing we can do about uncertainty, so we will try to respond to changes in the market environment flexibly.”

Under Nakamura’s watch, hot demand for Subaru product also drove Subaru’s U.S. sales to record highs. That is, until the pandemic and ensuing semiconductor crunch torpedoed volume.

In 2020, it fell short of achieving an astounding 12th straight year of record U.S. sales, when deliveries dropped 12.6 percent. Last year, U.S. volume dipped 4.7 percent to 556,581 vehicles, far off the all-time high of 700,117 achieved in 2019 before COVID-19 gripped the world.

As supply comes back online, Subaru’s U.S. sales rose 1.3 percent to 53,606 through February.

Nakamura also strengthened ties between Subaru and its biggest shareholder, Toyota. In 2019, Toyota increased its stake in Subaru to 20 percent, while Subaru took a smaller reciprocal stake in Toyota. That led to increased cooperation, including the joint development of Subaru’s first full-electric crossover, sold as the bZ4X by Toyota and the Solterra by Subaru.

Nakamura was known as an EV skeptic, often asking if demand was really that strong for EVs, especially in North America, Subaru’s most important market.

But last May, Subaru acknowledged increasing interest in the technology and announced plans to add a dedicated in-house EV assembly plant in Japan from about 2027. The push was part of a multibillion-dollar investment in electrification over the following five years.

Last month,  Subaru said it will ramp up its electrified offerings in the critical U.S. market to include several battery EVs by 2025 as it shifts development focus to the segment.

In handing the baton to Osaki, Nakamura acknowledged the emerging challenges.

“The pressing issues, such as chip shortages and response to electrification, are not at all easy to deal with,” Nakamura said. “We need to explore what would be the best way to develop battery electric vehicles, and there is also the issue of battery procurement.”