The ASEAN Chinese auto invasion might be why Subaru is scaling back
News just in from the Hong Kong Stock Exchange on May 24 that states, Tan Chong International Limited (TCIL) and Subaru Corporation will phase out the assembly of all Subaru vehicles in South East Asia.
All Subaru vehicles will come from its Japanese factories with immediate effect. This means CKD operation are no longer financial viable as Subaru sales across the region slows down (which we predicted and wrote about months ago).
When we heard from established Subaru dealers earlier this year that they were scaling back their outlets and some closing down, it was clear sign that the current aging model lineup could not compete with the competition from Japan, Korea and also China.
Despite the Subaru engineering leadership in their symmetrical all wheel drive technology, EyeSight safety systems and also the familiar ‘Boxer’ engines, Subaru in ASEAN had lost their edge with lower priced rivals.
The Tan Chong Subaru Automotive Thailand (TCSAT) assembly plant officially opened back in April 23, 2019 and It was a joint venture between Subaru Corporation and Tan Chong International Limited (TCIL). At the time, this was the second Subaru-managed assembly plant outside Japan. The other being the Subaru facilities in Lafayette, Indiana, North America.
At the time Subaru sales were rising fast with the popularity of the Forester and the XV with some 23,000 units being sold in ASEAN nations. This factory was designed for Subaru to more than double its sales in ASEAN (a projected 50,000 units by 2025).
All this changed when the Chinese automotive ‘wave’ started aggressively in 2022 across ASEAN nations. Thailand was the first to see a rise in Chinese auto brands like Haval, Great Wall Motors, MG and also BYD.
Then the ‘wave’ moved to Indonesia and Malaysia and was closely followed in the Philippines.
For the older Subaru fans (like us….. we own a Subaru Legacy GT) decades ago Subaru in Malaysia only sold fully imported units and it was the Impreza WRX and STI that was on offer. At the time, just 99 units were sold in one whole year.
Then it was the introduction of the local assembled popular Subaru XV in 2012 that pushed sales up to a height of more than 5,000 units a few years ago. This success also included the popular local assembled Forester in early 2016.
Please note that the Subaru business in ASEAN is handled by the Tan Chong Singapore base family and NOT the Malaysian based Tan Chong family (Edaran Tan Chong Motor).
