Subaru shifts production of cars for Canada from the U.S. to Japan
Due to retaliatory tariffs of 25% imposed by Canada on cars from the US, Subaru has decided to reduce the share of US-made cars for the Canadian market from 26% to 10% by the 2026 model year.
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In 2024, Subaru sold 68,043 vehicles in Canada, of which 26% (about 17,700 vehicles) were made in the US. However, due to US President Donald Trump's new tariff policy, Canada now levies a 25 per cent tax on cars manufactured south of its border in return. In response, Subaru has decided to move production of some models for the Canadian market from the U.S. to avoid unnecessary costs.
"By doing this, we can minimise the impact of retaliatory tariffs," Tomohiro Kubota, CEO of Subaru Canada, told Autonews Canada.
Currently, production of the Outback model for the Canadian market continues at a plant in Lafayette, Indiana, but is planned to be moved to Japan in the near future. After that, the Indiana plant will be retooled to produce the Forester, Subaru's second most popular model in Canada after the Outback.
At the same time, it is not yet clear whether the Forester, assembled in Indiana, will be delivered to Canada, or Subaru will prefer to use the capacity of its Japanese plants, where the production of this model for other markets is already established.
Notably, Subaru is one of the few global automakers without its own production facilities in Canada. Until now, the company has relied on the USMCA (US-Mexico-Canada Free Trade Agreement), which was first renegotiated by Trump. Now, with the new tariffs, that agreement has essentially lost its power for the auto industry, and Subaru is changing its strategy.
Source: Autonews
