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Subaru Will Spend $1 Billion To Improve Quality After Black-Eye From Recalls And Lawsuits

Subaru is serious about improving quality in the new Outback, Forester, Crosstrek, and Ascent models. See why the automaker is spending $1 billion to do it.

Subaru received a black eye this past year because of numerous recalls, scandals, and a multitude of class-action lawsuits. The U.S. is the brand’s largest global market and Subaru of America just finished its 12th consecutive year of record growth. But there have been growing pains with the Japanese automaker attracting a record number of customers each year.

If you are a regular reader of Torque News, we have covered these quality issues extensively. According to a recent report from Automotive News (subscription required) Subaru Corporation will spend more than $1 billion over five years to improve quality in their vehicles. “The fix partly called for slowing production and implementing new quality measures and training procedures,” the report said.

2020 Subaru Outback is the number-one selling vehicle for Subaru USA2020 Subaru Outback is the number one selling vehicle in the U.S.

Subaru has the lowest inventory of any automaker

With the quality issues plaguing the automaker, Subaru CEO Tomomi Nakamura is still under pressure to keep the momentum going and says they want to continue to grow and will need to boost production at its plant in Gunma, Japan, and its North American plant in Lafayette, Indiana. Subaru has the lowest supply of cars (24-day supply) on dealer lots of any automaker. The industry average is somewhere near 60, and sometimes even a 70 day supply.

Shoppers in December experienced a lack of inventory, especially Forester and Crosstrek (12-day supply) which are manufactured in Japan. Output in Indiana where the new 2020 Outback, Ascent, and Legacy are produced, is expected to rise by 30,000 vehicles this year, Nakamura said. The Outback is the brand’s number one selling vehicle in the lineup.

2020 Subaru Forester and 2020 Crosstrek are in low supply2020 Subaru Forester and Crosstrek were in low supply in December

Subaru walks a tightrope with quality on one side and increasing production and continued growth by producing more all-wheel-drive vehicles on the other. Subaru is trying to do both and knows quality needs to improve or they will lose customers.

On April 1, 2019, Subaru Corporation revised its Quality Policy. In order to restore faith in the company, the Japanese automaker announced the new "Quality Policy" in order to realize "quality reform" which was one of the themes of the medium-term management vision "STEP" announced in July 2018. You can read about the new policy here.

Subaru is working on a solution to the recent recalls and lawsuits and has committed $1 billion over five years to do it. This is what customers care about. Customers want a quality Outback, Forester, Crosstrek, and Ascent all-wheel-drive SUV from Subaru and couldn’t care less about the Camden, N.J. automaker hitting a 13th straight year of record growth.

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Denis Flierl has invested nearly 30 years in the automotive industry in a variety of roles. All of his reports are archived on our Subaru page. Follow Denis on FacebookTwitterInstagramSubaru Report. Check back tomorrow for more Subaru news and updates!

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Photo credit: Subaru DR, Crosscreek Subaru


John Goreham    January 9, 2020 - 12:49PM

Good report Denis. As a quarter-century-long loyal new Subaru buyer (4), this may be too late for me. With the oil consumption detect (which Subaru has never admitted to or explained) and the CVT defect, both of which resulted in class action settlements, can I trust a new Subaru? If both the engine and transmission of my gen Forester have defects that Subaru fought against owners to resolve, how can I expect the next Subaru problem to be dealt with in a way that has a clean solution?

MD (not verified)    January 10, 2020 - 10:01AM

After a recent hail storm totaled my older model subaru outback I replaced it with a 2019 forester. Unfortunately all the bad press Subaru has had now has me questioning my decision........and if any of these "common" problems goes wrong with my forester I may start shopping with other brands for a future purchase. To be fair if I had read into some of the issues before making my purchase last year I may have shopped elsewhere already.

I grew up in Alaska, and Subarus where coveted for their all terrain abilities, reliability and lifespan. I was thrilled when I bought my first Subaru expecting it to be a solid longterm vehicle. Afterall I had grown up seeing subarus with well over 200k on them. With then issues that have been cropping up in recent years I would really like to see Subaru make more of an effort to restore confidence is buyers like me. I think the right thing to do is to recognize they have damaged their brand and give lifetime extend powertain warranties (non-transferable) to all vehicles that may be effected by their quality control issues until they are certian they have their problems sorted out.

Michael Breaux (not verified)    January 10, 2020 - 2:35PM

I’ve a 2017 outback touring package and my mom bought a new 2018 Ascent. Both of us love it. Only problem I have is my mom’s heating seat is awesome but not mine outback weak heating system I asked if I can upgrade my heating system, i can’t also the 2019 Ascent gps system I really like but I can’t get updates. It got be a way to upgrade number one is heating system I really need it because of my back. Second reason gps my have to fully complete address but mom’s when you set up gps it show of choice of address but I can’t get with my outback system upgrade. It’s sucks! My mom’s 2.4 turbo box engine is awesome and should put all Subaru model and they will come again. 91 percent people loved Subaru So I!

John Gillins (not verified)    January 10, 2020 - 7:55PM

I will be new car shopping in 2-3 years.

As far as I'm concerned, $1 billion over 5 years is too little, too late.
I simply don't trust their lack of consistent quality control.
Quality control is far more important to me than the awd prowess of Subaru. What a shame, I just don't trust their commitment to quality control, nor their horrid responses to problems customers have had.
To hell with Subaru, you've had far too many chances.

Jeffery Mastin (not verified)    January 10, 2020 - 9:44PM

My 2010 2.5 Premium Forester has been the worst vehicle I’ve ever owned, including a 1985 Ford Tempo. Cam seal leaks and heavy oil use from day 1 with the dealer denying the problem all the way. Clutch and throw-out bearing failures were routine every 35-50k miles. Major brakes wear issues and bad rotors fixed by the dealer under warranty twice before aftermarket pads and rotors finally solved the problem after the warranty had expired, The coup de gra has been the interim viscous coupling differential, which is the heart of Subaru all-wheel drive system, totally self-destructing at 134k. The used replacement is now suffering from the same exact issue after only 5k miles, but the addition of 8 ounces of limited slip differential additive seems to be helping the problem for the moment, but time will tell. Stubborn Japanese pride has lead them to deny serious quality issues rather then fessing up and dealing head-on with them. The 7 Mazdas we’ve owned have been head and shoulders above this Subaru in terms of quality and service and they are only getting better from recent reports we’ve seen. When the old Forester dies there may not ever be another one in our household. Time will tell! Are you listening Subaru?

Chris (not verified)    January 12, 2020 - 1:51PM

I've owned many cars in my 30+ yrs of driving and our 2nd gen and 3rd gen Subaru Outbacks were the worst, most unreliable and expensive cars to fix! So disappointed!

Leaking head gaskets (3 times!), torque converters, all the wheel bearings, axle boot repairs, moon roof stopped working, burning oil, oil pan gaskets leaks, etc...

FAR more problems and issues than any Honda or Toyota we have ever owned! And because of the terrible box engine design of the Subaru they have to drop the entire engine just to work on them. Which of course is ridiculously expensive.

Do NOT fall into the trap of thinking Subarus are "reliable".

Twin (not verified)    January 24, 2020 - 11:13PM

I purchased a new car in December because our 2019 (new) Outback was a disaster that our dealer could not fix. Most of the problems were electrical and the car would often simple be dead in the mornings. They replace the battery three times in 1.5 years and tried other fixes. Nothing worked. The dealer recommended that Subaru buy the car back. Subaru refused, they gave me $2k as a good will gesture. This was my 4th new Subaru. The days of reliability are over. The new electronics are simply not dependable. I suggest looking at Toyota although I hear their new cars have similar problems. I pity the person who ended up with my car.

Mchill (not verified)    February 3, 2020 - 6:39PM

Omg! We purchased 2020 this fall to replace a 2015 forester. Everything that was explained to us was incorrect. The car keep turning off if we don’t do the following to prevent it “ was told we could manually turn it permanently off” not true. It takes 4 steps to turn it off everytime you shut off car! Window are so dark, my eyes can’t adjust. Can’t use front window shiel due to poor design of try large dash camera. When my shield is down I have to bend over at red light to see if light changes. The headlights ,are horrible! They have a straight horizon line so the person in front of you don’t get blinded but it blocks your vision. They also shine a green/yellow light that is not very bright! The windshield had something on it from factory that blocked vision. Looked like heavy wax. Today I removed all backseat headrests so I had more vision. I am 5’6 and I hit my head everyone I get in or out! I am 66 year old grandma who HATES her new car. When I complained to Subaru a got a sweep we and an umberella free lol! It only cost $40,000!!! I could go one forever. I wish I could fly to Japan and lecture the engineering department. Forgot about the time I couldn’t back up because all the warning lights came up on backup ca,era. After 2 days of making phone calls we finally brought it to Subaru and was told after 2 hours it was a recall but nobody was notified!

Jes (not verified)    March 15, 2020 - 3:37PM

At 74000 miles I had to replace both rear wheel bearings on our 2015 Forester. The bearings were shot earlier than 74K but it took me awhile to realize what was going on. The car has never been off-road or in snow or salt. The fact that both were bad at the same time seems to indicate a defective or sub-standard part. I have owned cars for 60 years but this is the only one to have wheel bearings fail.

Edward Bourdo (not verified)    July 19, 2020 - 8:48AM

Been having problems recently with computer / radio workin the correct way does not activation of some things on the screen of the radio and bad reception gone in-and-out. I have a 2020 outback.

LS (not verified)    August 21, 2020 - 11:40AM

Great article! With Subaru breaking sales records maybe competitors will finally wake up and start thinking! They have to listen to what the consumer wants (and just deliver it.) Subaru's deficiencies in quality and reliability seem not to be hurting their sales. A part of their success could be the fact that Subaru offers a lot more useful options for customization than their competition. Recently, I asked a Toyota dealer if they could get me tinted/auto dimming side mirrors. They had no idea such thing exists! It's the most important safety feature against the modern LED headlights and it is standard on Lexus (which happens to be a Toyota brand). Subaru has it available (and affordable) on their reasonably priced cars. Toyota and Honda WAKE UP! Stop sabotaging your working class brands in favor of the upscale Lexus and Acura!