Subaru China now wholly-foreign-owned concern

By ZHANG Mingrui

Subaru China has undergone significant changes in its shareholding. Pang Da Automobile Trade Co., Ltd. has withdrawn entirely. In May, Pang Da Automobile Trade announced its long-anticipated delisting from the Shanghai Stock Exchange.

Pang Da's 40-percent holding has been transferred entirely to the Subaru Corporation itself, making the Japanese multinational the sole, and controlling, shareholder. Henceforth, the company can therefore no longer be considered a Sino-foreign joint venture but is now a foreign legal entity.

However, the industry sees the acquisition of Pang Da Group’s equity as a step in the right direction for Subaru and an opportunity to initiate reform.

Founded in 2003, Pang Da was once China's largest car dealer, with nearly 1,500 dealerships nationwide in 2012. But due to poor debt management, it declared bankruptcy in May 2019 and began a reorganization that was completed that year. At the end of 2022, Pang Da had only 267 stores left.

Other car dealers have also been struggling in recent years. Last year, the proportion of loss-making dealers in China was 45.2 percent, with only 30 percent in profit, according to a report by the China Automobile Dealers Association in March.

Subaru is a niche brand in China with poor sales performance. The company has five models on sale in China, including SUVs and two-door sports cars, all imported, with a general price of over 200,000 yuan (US$28,000). The product mix is weak and overpriced, making it difficult for Subaru to expand.

The corporation recently instigated a large-scale personnel reshuffle at the senior management level worldwide. Previous CEO Tomomi Nakamura was a well-known EV skeptic, questioning the demand for EVs. However, last year, Subaru announced plans for an EV assembly plant in Japan, which will become operational around 2027.

New CEO Atsushi Osaki took up the helm of a new-look board this month. He identifies closely with the race to zero emissions. The company plans to invest billions of dollars in electrification over the next five years.

Industry analysts believe that if minor brands like Subaru are to survive in the often-frenzied Chinese marketplace, they should think only of marginal profits and bring products into the country for sale at the lowest possible price.