Subaru Still Sees Risks in the Yen, Says President
Japanese automaker Subaru has enjoyed four consecutive years of strong sales growth in its largest market, the U.S., but its president and COO told CNBC he was still mindful of risks to the company's success, one of which could come from a sudden spike in the yen.
The recent weakness in the yen, which has fallen about 20 percent over the past four months has given Japanese exporters a boost, but Thomas Doll fears a turnaround in the yen could dent the company's profitability going forward.
"What would affect us would be if the yen appreciated again right now," said Doll, who is also the chief operating officer at Subaru, the automobile manufacturing division of Japanese transportation conglomerate Fuji Heavy Industries.
The yen's slide against major currencies came amid expectations of aggressive monetary easing and a drive by Japan's new Prime Minister Shinzo Abe to revive a stagnant economy.
However, after its rapid decline the yen has regained some lost ground - it is up 2.6 percent from a 3-1/2 year low of 96.70 per dollar hit on March 12.
Read More: Ssshh! Why Japan Is Keeping Quiet on the Yen)
"The yen going the other way [weakening] is helping our business a bit. It's providing the resources that are necessary to continue to invest in research and development (R&D) and vehicle development. A yen at 77 to the dollar puts enormous pressure on our parent company in terms of pricing," added Doll.
Following on from four consecutive years of strong U.S. sales growth, the firm recently posted a record sales figure for February, selling 28,163 units in the U.S. -an 11 percent year-on-year increase.
According to Doll one of the reasons for its success in the U.S. is the fuel efficiency of its vehicles, plus the launch of three new vehicles over 2012-2013 helped push sales.
(Read More: Why Subaru Is Outpacing the US Auto Industry)
The firm is now gearing up to launch its first hybrid vehicle - the Subaru XV Crosstrek Hybrid - set to debut at the 2013 New York International Auto Show starting on March 29.
"This is a vehicle that will put our green credentials into play because all of our vehicles are built at zero-landfill plants," Doll said.
Subaru's U.S. plant Indiana Automotive is a zero-landfill plant, which means virtually none of the waste created from its production is buried in the ground and is instead recycled.
(Read More: Japan's Autos Are Finally Shrugging Off China Blues)