TOKYO — Subaru Corp. on Monday reported its lowest quarterly profit in over five years, as North American sales declined and U.S. incentives rose.
Operating profit at the smallest of Japan’s major automakers fell 52 percent in April-June from a year earlier to 57.6 billion yen ($517.38 million).
North American sales, which comprise about 70 percent of Subaru’s total, fell 13 percent to 166,000 vehicles in the quarter, pushing overall global sales 12 percent lower to 237,900 vehicles.
U.S. sales of the compact Forester crossover fell during the period, as customers held back from buying until a revamped model is launched in the coming months.
Subaru has also been increasing buying incentives in the U.S., including for the Forester and midsize Outback crossover, as it tries to expand U.S. market in the face of competition with much bigger rivals. That raised marketing costs in the first quarter. U.S. retail sales rose 7.8 percent during the period, according to the Automotive News Data Center.
Tariff concerns
Subaru has been increasing vehicle production at its U.S. plant to address a jump in demand for its cars over the past few years, but it still imports roughly half of the cars it sells in the country from Japan.
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