January 11, 2011 / 7:28 AM / 7 years ago

Subaru planning hybrid for U.S. in 2013

DETROIT (Reuters) - Fuji Heavy Industries’ Subaru brand is planning a hybrid model for the United States in 2013, although it remains to be seen how big an impact such cars would have on the market, a top executive at its U.S. unit said.

“We’re going to need something at some point, even (only) to say we have it because that enhances our brand image in the market,” Tom Doll, chief operating officer of Subaru of America, told Reuters in an interview at the Detroit auto show on Monday.

Japan’s Fuji Heavy, known for its boxer-engine all-wheel-drive cars, has announced plans to launch its first gasoline-engine hybrid car in 2012 but has not officially disclosed which regions it would sell in, and when.

Last year, Subaru was one of the fastest-growing brands in the United States — its biggest market — with a 22 percent increase, putting it neck-and-neck with BMW.

Its market share grew to 2.3 percent, almost doubling in three years, although its spending on incentives was the lowest among major brands, near $1,000 and at one-third of those at General Motors Co.

Doll declined to disclose Fuji Heavy’s internal estimate for U.S. sales this year but said he was optimistic about Subaru’s continued brisk growth, adding he expected its per-unit incentives to be unchanged from last year’s levels.

While hybrids could improve Subaru’s brand image, Doll said he was happy with the car maker’s current product line-up, which has won over many customers new to the brand with its fuel-efficient, all-wheel-drive models such as the Outback and Forester.

“If gas prices increase moderately and they stay in this $3 range, we have the products that can compete very, very well in the segments that we compete in,” Doll said.

“Because remember, hybrids are only 2 percent of the market. And everybody has them out here (at the auto show) so it’ll be interesting to see how that all shakes out in the market.”

Fuji Heavy last year boosted production at its U.S. factory, in Indiana, to 163,000 units a year from 100,000, and is working on further capacity expansion as Subaru races to fill demand for its Legacy and Tribeca models.

Editing by Steve Orlofsky

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