The surprising rise of Subaru as automaker
Malcolm Bricklin played a little-known role in the evolution of the company
Subaru regularly wins safety awards in crash testing, but that wasn’t always the case. When first imported into the United States — through a loophole discovered by an American businessman who would later fleece New Brunswick out of $23 million — it was promptly named the “most unsafe car on the market.”
Subaru’s parent company, Fuji Heavy Industries, began as an aircraft manufacturer. It was incorporated in 1953 when five companies joined together, taking its name from a star constellation the Japanese call Subaru. They’re the stars on the grille badge today.
The company’s first vehicle was a motor scooter called the Rabbit, introduced in 1956. But it had been working on a car as well, in keeping with the Japanese government’s directive for companies to build lightweight, inexpensive cars. Subaru used aerospace techniques to pare off the pounds, and in March 1958 introduced its first automobile, the 360.
It was typical of Japanese microcars, with an air-cooled, two-cylinder rear-mounted engine that made just 16 horsepower, along with a three-speed manual transmission. By the time it got to the U.S. a decade later, the 360 had been upgraded to 25 hp and four gears, but it took 37.5 seconds to reach 80 km/h.
In 1961 it introduced the Sambar mini-truck. To further cement its reputation as a serious automaker, the company installed a test track at its plant in 1964.
For 1966, it produced the 1000, its first car with a horizontally-opposed four-cylinder “boxer” engine and front-wheel drive. The design would be developed into a compact model that would later reach the U.S. as the FF1, indicating front-engine and front-wheel drive.
Enter Malcolm Bricklin, a Philadelphia-born entrepreneur who initially made his money with a chain of hardware stores in Florida. He noticed the growing popularity of scooters and mopeds, and after buying and selling a distributor’s unsold stock of Italian scooters, discovered and began importing Subaru’s Rabbit scooter. He was interested in its cars, but the company wasn’t yet ready to spend the time and money it would take to design a vehicle to meet U.S. crash standards. It was also unsure of this unfamiliar market, especially since Toyota and Datsun were still struggling to hit it big in America.
Undeterred, Bricklin found a loophole. American crash standards only applied to cars, which the rules said were vehicles that weighed more than 1,000 pounds (454 kg). The featherweight 360 was just 960 lbs. In effect, it wasn’t a car, and so it didn’t have to meet car standards to be sold to consumers.
Along with his friend Harvey Lamm, Bricklin founded Subaru of America on February 15, 1968. Lamm became its first president and chief executive, and it’s the same company that exists today. Rather than dealerships, the pair sold distribution franchises, most of which Subaru would later buy out.
The 360 went on sale in May 1968. Its $1,297 price tag was certainly attractive, given that the cheapest Chevrolet that year was $2,442, and even a Volkswagen Beetle was $400 more than the Subaru. But when Consumer Reports got its hands on one and declared its safety rating to be “unacceptable,” sales fell.
Only 5,590 were sold in 1970, and Lamm dropped it in favour of the front-wheel FF1. On a trip to Japan he saw Subaru’s Leone, a station wagon that the driver could switch from front- to allwheel drive. He brought it to the U.S. as the DL/GL Wagon, the country’s first all-wheel passenger car.
Subaru of America offered its first public stock in 1972, and by 1976, was in sixth place among all imports in the U.S. That year, the first Subaru vehicles were sold in Canada, and over the next decade, Canadians could buy such vehicles as the Brat minitruck and Justy hatchback.
By the late 1980s, the company was firmly part of the North American auto scene. In 1989 it built a manufacturing plant in Indiana, while Subaru Canada was formed for importation and distribution here. Parent company Fuji Heavy Industries owned about half of Subaru of America’s stock, and in 1990, bought it out entirely.
And Malcolm Bricklin? He sold his share of Subaru and, in 1974, convinced the New Brunswick government to help underwrite a factory to build a futuristic, gull-winged Fiberglas sports car that he named for himself. Production issues mounted and costs spiralled out of control, and only 2,875 were built before the province called a halt to it. Bricklin was back on the scene again in 1986, introducing the bargainbasement and problem-prone Yugo to North America.
In the 1990s he tried to build electric bicycles, and in 2005 he teamed up with Chinese automaker Chery to import its vehicles into the U.S., which ended in nasty lawsuits. Currently, he’s trying to interest dealers in a bizarre venture where they’ll sell both three-wheeled electric vehicles and expensive artwork. But if nothing else, he’ll be remembered for the loophole that ultimately gave us Subaru.