carol loomis: her new book on warren buffett exclusive: the 2012 inside con ed the night businessperson sandy struck of the year PLUS steve jobs vs. sam JEFF walton: tale of the tape BEZOS globalism goes amazon ceo backward by adam lashinsky by joshua cooper ramo they say our list of subaru the 50 best in is the business, best car including money tim cook , can buy alan mulally & jay-z PERSONAL READING COPY ONLY. NOT FOR DISTRIBUTION. PHOTO CREDIT GOES EHERE GOES CREDIT PHOTO M O C . E Photograph by SOME PHOTO PERSON UN Month 00, 2012 FORTUNE 000 T / R DECEMBER 3, 2012 3, DECEMBER FO THEY’rE CALLING SUBARUS THE SUBARU SALES IN THE U.S. (2012)BEst CAROUTBACK SIMPREZA OUTBACK IMPREZA (incl. WRX) 69,719 MONEY55,248 CAN BUY FORESTER LEGACY FORESTER LEGACYT HE LATEST MODELS ARE WINNING 29,819 47,441 THE HIGHEST MARKS FOR QUALITY AND SABRZFETY. TRIBECA 0 50000 100000 150000 200000 250000 300000 HERE’S HOW THE TINY, QUIRKY, BRZ 1,989 TRIBECA“ARTI1,336 SANAL” CARMAKER DOES IT. BY ALEX TAYLOR III TRIBECA OUTBACK 1,336 69,719 BRZ 1,989 IMPREZA Forester 47,441 55,248 Impreza 55,248 BY THE USUAL MEASUREMENTS, Subaru should be Subaru of America—the U.S. armLegacy of Japan’s 29,819 Fuji no more than an afterthought in the U.S. car Heavy Industries—began selling cars in the U.S. market.FORESTER It sells just seven car and crossover 44 years ago and still ranks onlyOutback 12th in size. 69,719 models47,441 and accounts for a slim 2.3% of U.S. Hyundai and Kia, which arrivedTribeca two decades 1,336 auto sales. By itself, the Toyota Camry outsells later, have developed broader product lines and the entire Subaru lineup. For yearsLEGACY Subaru has sell several times more vehicles. been essentially a regional brand—strong29,819 in Yet Subaru has racked up more endorsements the Northeast and NorthwestBRZ 1,989 but unknown in by independent arbiters of automotive quality the rest of the country. No overnight success, and safety than just about any other manufac- U.S. SUBARU SALES (2012 through october) OUTBACK IMPREZA (incl. WRX) FORESTER LEGACY OTHERS PERSONAL READING COPY ONLY. NOT 95,357FOR DISTRIBUTION.68,329 61,180 39,187 6,769 SO URCE: AUTOMOTIVE NEWS Illustration by I LOVE DUST December 3, 2012 FORTUNE FORESTER OUTBACK IMPREZA (incl. WRX) LEGACY BRZ 1,989 TRIBECA 1,336 69,719 55,248 47,441 29,819 Here it is – 2012 will be 325,000 1968 332 1969 2407 1970 5590 1971 14161 1972 24056 1973 37793 1974 22980 T om Doll, SUR BA U Subaru’s top 1975 U.S. executive, 41587 in a Forester 1976 turer. Consumer Reports rates Subaru 48928 above Mercedes-Benz, BMW, and every other manufacturer in performance, 1977 DIFFERENT FROM THE stART T he company has thrived with quixotic vehicles and marketing campaigns to match. comfort, utility, and reliability, and says the 80826 company makes the best cars in America. 1978 “CHEAP “THE SUBARU “WE BUILD OUR “iNEXPENSIVE “SUBARU. “THE BEAUTY “WHEN YOU “DRIVEN “THINK. “IT’S WHAT ALG (formerly Automotive Lease Guide), AND UGLY IS NOT A REPUTATION AND BUILT WHAT TO OF ALL-WHEEL GET IT, BY WHAT’S FEEL. MAKES DOES IT” JAPANESE BY BUILDING TO STAY DRIVE” DRIVE” YOU GET IT” INSIDE” DRIVE.” SUBARU, A the industry’s arbiter of residual value and 103274 BEETLE” BETTER CARS” THAT WAY” SUBARU” used-car prices, named Subaru the leader 1979 in retained value among mainstream 325,000* brands. And after crash tests, the Insur- 127871 300 THOUSAND UNITS 263,820 ance Institute for Highway Safety made 1980 250 YEARLY SUBARU SALES IN THE U.S. Subaru a “top safety pick” across its entire 142968 200 product line, a distinction no other manu- 142,968 facturer can claim. 1981 150 108,547 Fueled by this trifecta of achievements, 152062 100 172,216 just about everything Subaru sells is flying off dealers’ lots this year. Despite a chronic 1982 50 332 shortage of inventory, the company has 150335 0 been breaking monthly sales records with 1983 1968 1970s 1980s 1990s 2000s 2012 regularity, and sales for the year are up 26% compared with last year’s—nearly 156840 double the 14% gain for the industry as 1984 a whole. Hurricane Sandy struck right in 157385 the heart of Subaru’s customer base, yet the little car company saw sales jump 30% 1985 1968 SUBARU 360 1978 BRAT 1984 JUSTY 1992 SVX 2002 BAJA 2011 TRIBECA in October, vs. the industry’s 7%. 178175 *FOREC AST. SOURCE: SUBARU DATA What Subaru has done is to make itself into the first automaker that could be de- 1986 scribed as “artisanal”—focused, individual- 183242 cars are in short supply and its relatively affluent buy- out until next year, 15 years after Toyota’s Prius went on istic, and really good at a very few things. 1987 ers are less sensitive to promotions. In August, Subaru sale. Subaru suffered a near catastrophe when the earth- With only limited resources, Subaru has made smart bets Subaru’s compact Impreza sedan and hatchback. Newly spent just $857 per car on incentives; only Porsche spent quake and tsunami in March 2011 closed factories in Japan on features like all-wheel drive, developed memorable mar- redesigned and with a base price under177138 $18,000, it has less. Edmunds.com senior analyst Jessica Caldwell says for four weeks and interrupted the flow of parts to its sole keting and advertising that set it apart from the competi- young families and first-time buyers1988 queuing up to take Subaru customers are generally capable of affording a U.S. plant, in Lafayette, Ind. Dealers were starved for cars. tion, and learned more about its customers than any other advantage of its improved fuel economy, updated styl- more expensive vehicle, don’t buy strictly on price, and Used to operating with 32,000 cars on the ground, Subaru automaker. In appealing to them by geography, lifestyle, ing, and roomier interior. Sales have155956 doubled from a year continue shopping even when the economy takes a dive. saw its inventories drop to 17,000, pummeling sales. and, at times, sexual orientation, it has built the deepest ago, and dealers have less than a two-week1989 supply. At Even so, life isn’t easy for Subaru or its corporate par- Subaru recovered but now faces fresh challenges. It loyalty in the car business. The company understands the opposite end of the functionality136112 spectrum is another ent, Japan’s Fuji Heavy Industries. They are minnows needs to catch up with competitors by developing fuel- itself so well that for years its advertising tag line was the red-hot seller, the Subaru BRZ. A modern interpretation in an industry where size counts. Don’t look in Subaru’s efficient powertrains across its lineup, opening more self-referential “It’s what makes a Subaru, a Subaru.” of the classic sports car, the two-plus-two1990 coupe features lineup for any minicars the size of the Honda Fit or for factories outside Japan to spread its currency risk, and So resilient is the appeal of its brand name that Subaru out-there styling and racetrack handling108547 that appeal to full-size ones like the Toyota Avalon either. All Subaru expanding its U.S. sales footprint. And it has to keep has managed the feat of stretching it over wildly different men of a certain age. So many are going out the door at cars and crossovers are based on just two platforms looking over its shoulder. Fast-rising Volkswagen poached models. One of this year’s fastest-selling cars has been prices starting at $25,000 that the days’1991 supply at the (General Motors has 30!), and the vehicles range in size Subaru’s top marketing executive a year ago, and accord- beginning of September had shrunk 105052to 11. only from subcompact to midsize. Subaru needed to form ing to industry reports, VW is considering a new cross- It’s unusual for any car company, let1992 alone one as tiny a partnership with Toyota to make the BRZ economical. over with ride height, bumpers, and wheel-arch cladding + APP EXTRA as Subaru, to have two hit models at once. Subaru did most of the engineering and provided the that takes dead aim at Subaru’s most popular models. Today Subaru finds itself in a market104803 sweet spot that engine, but Toyota created the design and markets an So Subaru will have to find new ways to differenti- Read this story on your tablet to see a photo gallery produces outsize profits because, like an NFL receiver, it almost identical version called the Scion FR-S. ate itself, which shouldn’t be much of a stretch. Since its of Subaru vehicles and watch an exclusive interview 1993 with executive Thomas Doll. hasPERSONAL learned how to work the READING seams. In the overcrowded COPY ONLY. NOTSmall size FOR hurts when DISTRIBUTION. a new model like the awkward founding, it has always gone its own way. Its headquarters midsize segment, for instance, Subaru102179 sidesteps heavy- seven-passenger Tribeca fails to gain a foothold. It’s also are in a New Jersey suburb, several thousand miles away weights like Camry, Accord, and Altima1994 by equipping hard for a small car maker to keep on top of new technol- the Legacy with all-wheel drive (AWD),100619 which the others ogy. Subaru’s signature four-cylinder “boxer” design is two Photograph by RYAN DONNELL don’t offer.