The period from 1971 to 1978
Wednesday, 29 Aug 2012
The oil crisis and advancement into the North American market
This week we will look at the period between 1971 and 1978 when the first generation Leone was manufactured.
The fourth Arab-Israeli war in October 1973 triggered oil producing countries to reduce production and the resulting oil price rise caused worldwide economic instability. In particular this had a large influence on Japan that got most of its energy from the Middle East, and the oil crisis was beginning to affect the lives of regular Japanese citizens. The increased cost and shortages of gasoline greatly reduced consumer willingness to purchase and the steadily increasing domestic demand for new cars suddenly dropped.
Facing these significant setbacks to the automotive industry, Subaru worked quickly to get back on track and our international sales did well. In 1974, the Subaru Brat, pickup truck version of the Leone, was released for the international market in an attempt to increase sales.
Subaru’s vehicle export business, which started with the export of 136 Subaru 360’s to the American-controlled Okinawa, was soon expanded to include South East Asian countries such as Thailand and Hong Kong. In 1967 production capacity was improved with the introduction of knockdown production of the Sambar in Taiwan which lead to 9,900 vehicles being exported the following year. In February of 1968, American Malcolm Bricklin founded Subaru of America (SOA) in Philadelphia. This lead to the Subaru 360 being introduced to the American market under the pretense of being a “low-maintenance cost vehicle that is cheaper than taking the bus”. Full scale exporting started with the release of the FF-1 and from 1969, exports mainly to America rapidly increased to 19,700 vehicles, and then on to 28,700 and 38,400 in 1971 and 1972 respectively.
The Gunma Yajima plant was established to handle the increased production requirements due to export demands of the American market. This plant was fully operational from 1974.