Zheng shae-wen, economic journalist for the 21st century
Sbaru — this company, which was born on the wreckage of an aircraft, has a solid nuclear technology base that can heat up any energy lover. At some point in time, sbaru had a well-known “technology stream” in china’s car ring, which, with its two monolithic identities of engines and full-time four-way systems, created the myth of a brand price premium in china’s market of 278,000 to 378,000 won。
But with the release of the financial report for the 2025 fiscal year, the car company, known as the japanese little giant, fell completely down the altar. The data show that, although the company achieved an increase of 2. 1 per cent per year in the current season, reaching 478. 5 trillion yen, its operating profits fell sharply from the high cliff of the previous fiscal year to 40. 1 billion yen; the net profits attributed to the parent company likewise fell by almost 73 per cent, recording only 90. 8 billion yen。
Despite the fact that sbaru did not have the first loss in nearly 70 years, as it did in honda, nor did it have the same loss in japan for two years in a row, the profitability of a 100-year brand, known for its robust operation, evaporated so quickly that the market was shaken. This is no embarrassment to the sbaru family, more like a microcosm of the global transition of old and new kinetic energy。
Customs iron fists and electric “black holes”: the truth about the evaporation of profits
With the seemingly robust increase in revenue, the 90 per cent decline in profits in sbaru is undoubtedly the most striking point in the financial statements. In response, sbaru gave three key “explosive points”: united states tariffs, impairment of electric vehicle assets, and high-level r & d inputs。
In terms of industrial structure, sbaru is a “student” highly dependent on the north american market. In 2025, the united states market contributed 644,000, or about 70 per cent, to its global sales of 9. 24 million, with only 111,000 in japan and very little in china. Excessive reliance on a single market makes them extremely vulnerable to risk, which in good times is a profit engine and in the countercyclical period becomes a risk exposure。
In the last two years, united states customs policy has been tightening, and sbaru, which has a plant in indiana, still needs to import large quantities of spare parts from japan, and parts of cars are still exported locally, with tariffs driving directly higher procurement and logistics costs and seriously eroding profit margins。
Worse than customs duties, it is the huge “black hole” of sbaru's assets on the motorized transition track. According to the financial statements, the company had to confirm a one-time impairment loss of a pure electric vehicle of yen57. 8 billion. This loss of close to 60 billion yen has brought almost zero instantaneous investment in sbaru's high research and development in the area of electrification. In other words, sbaru's ambitious development in previous years of pure power platform technology, specialized battery moulds, etc., has been abandoned by the market before it came into operation。
In fact, sbaru's electro-transformation was branded from the very beginning as a slow-and-half. When china's market's “autonomous” and autonomous brands such as biadi and jiley have already completed product-to-generation swaps using 800v high-pressure speed platforms, sbaru's electricization programme has been “frequently resonated” with its warm global sales。
Sbaru's first global, pure suv “solterra”, was turned by the market to “shell-exchange toyota bz4x” - it also exposed sbaru's scarcity and path dependence on the electric technology reserves。
Sbaru was finally distracted by internal diplomacy. In the face of unsustainable input output ratios, sbaru announced in the wake of the release of the financial paper that it would postpone the self-research pure electric vehicle landing plan, scheduled to be launched in 2028, and redirect its research and development resources to fuel and hybrid vehicles, and reassess its mid-term target of 50 per cent of electric vehicle sales in 2030. This means that today, when china’s new energy vehicle penetration continues to climb and its market share in the autonomous brand is approaching 70%, sbaru has been forced to choose a strategic “retard” and focus back on the fuel track。
China's market island: transparents from japanese hard guys to 112 monthly sales
The story of sbaru began in 1917 with the creation of the institute of flights in japan by its founder, sakishima. The sbaru brand was created on 15 july 1953 with the formal establishment of the fulbright industry corporation, a merger of five companies. “subaru” - the name of the japanese “single star”, the brand name of the six stars, is closely linked to the “six stars uniting five companies into a bright star” desired by sinoshima。
In the history of car development, sbaru has always followed a unique path. In 1966, sbaru applied the horizontal engine technology to the mass-production model, which was highly engineering-controlled because of its very low gravity and high stability. Subsequently, in 1972, the first full-time four-wheel-drive leone was introduced, supported by a left-to-right symmetric full-wheel-drive system, resulting in a combination of “level-to-engine plus full-time four” gold technologies. From the foresters to the proud tigers to the winged panthers wrx sti, sbaru wrote a legend after a long time at the larx and wrc races, and accumulated a great deal of loyal “dead powder” worldwide。
As a proxy for professional, unique and performance genes, sbaru has never sought to become an industry of toyota, but has adhered to the “small and beautiful” stance. Even though toyota was officially a major shareholder in sbaru in 2020, sbaru maintained its development spirit, especially in the face of new energy sources and intelligent driving flows, which constituted its special historical positioning。
If the sight is drawn back from the sea to the continent of the canyon, the situation of sbaru in this vast market is even more magical and realistic than its financial data. If sbaru had a barely decent american base on a global scale, it had become a completely forgotten symbol in the chinese market。
Data show that sbaru sold 7884 in china in 2023, fell sharply to 3635 in 2024 and to 2580 in 2025. In january 2026, sbaru sold only 112 new vehicles in china。
Even though the 2. 5l natural air-inhaling engine and full-time four-way systems, which are the main market power of sbaru in china, are highly appreciated for their mechanical qualities, the start-up price of $249. 8 million, in an era that has fully moved into smart cabins, high-class smart driving and the ai mega-model, appears to be a “industrial classical echo” from the last century。
Even more deadly is the fact that sbaru's domestic pricing structure is still characterized by high import postures and lack of any “localized” price elasticity. In a fierce competition with toyota, honda, japanese production, and the chinese-owned brand-new energy car model, which is the leading global intellectual experience, sbaru's sales terminal offers neither a large terminal discount nor a destabilizing bid for global imports。
Today, sbaru's authorized distributors in china have been reduced from nearly 200 at their peak to less than 80, and most of them are no longer in possession and only maintain their sales. A brand that used to have countless fans because of the "head d" leopard sti is now left with only the ashes of love。
The japanese car company's group has lost speed: sbaru is just the tip of the iceberg
The collapse of sbaru did not occur in an industrial vacuum. Looking at it, almost the entire day-to-day industry faces varying degrees of difficulty in finance and markets. Even the huge financial shock of sbaru is, to say the least, just the tip of the iceberg of mass collapse of the japanese army。
At the very same time that sbaru published its financial performance for the 2025 fiscal year, honda and japanese produced successive financial reports for the 2025 fiscal year, which were more alarming than sbaru when the two headlines were car companies. Honda directly handed over the first annual deficit survey in nearly 70 years since it was listed in 1957 - a net loss of jpy 42. 39 billion, compared to jpy 83. 8 billion for the same period of the previous year. Daily production is also on the death line, with a combined net loss of approximately 550 billion yen for the 2025 fiscal year, a two-year period of deep loss, and plans for a global downsizing of some 20,000 workers and the closure of seven factories。
And toyota, the head of japan, while maintaining its strongest base at the global level – with sales exceeding 50 trillion yen in fiscal year 2025, with a net profit of 3. 8 trillion yen – is also under pressure in the chinese market. According to market data, the retail share of japanese brands in the chinese market has declined from around 22 per cent in 2021 to 12. 2 per cent in april 2025, a dramatic decline. This downward trend continued until 2026, when honda's sales in china, toyota's constant exchange of prices and the loose price system for daily production became the norm in industry。
What is really embarrassing for a car company is a massively delayed electrical transformation. In 2026, in the face of the total competition brought about by the continued rise in the penetration of china's new energy vehicles, japanese cars were generally clumsy and slow to move into the chinese market。
Honda's electricized products are almost non-existent at the terminals, and 147,000 of toyota's platinum brands are sold monthly for their overall size. The slow transformation of electro-mobilization means not only that r & d input output is low, but also that it directly squeezes the already weak profits and further increases the risk of “brand marginalization” of japanese firms in international and local markets。
The pressure on sbaru was particularly acute in this tragic stock phase-out campaign – neither toyota’s mixed profit pool as a buffer for the transition period, nor honda’s and japanese production’s multifaceted configuration in emerging global markets. It is an excellent player who is highly dependent on “the u. S. Fuel truck market plus japanese indigenous manufacturing”。
The financial vulnerability of sbaru will be amplified indefinitely against the backdrop of rising tariff costs on the united states market, almost zero sales on the chinese market, and the global electrodynamic transition absorbing r & d funding。
Recall that 10 years ago, the japanese cars built a deep “magazine river” on the basis of mature fuel economy technologies and stable quality control systems, and that today autonomous brands such as biadi are gradually gaining ground in terms of the loss of electricity and infrastructure. When they took the ace of oil savings from the former, japanese companies finally realized that a counter-attack from product, pricing to supply chain domesticization of china as a whole had been completed and that they had been left behind in the old age。
The fate of sbaru may be one of the footnotes of this industry paradigm migration。
