Subaru is the automobile manufacturing division of Japanese transportation conglomerate Fuji Heavy Industries Co., Ltd. (FHI).
They are known for their use of boxer engines in their vehicles and full-time AWD, as well as their turbocharged performance vehicles, such as the Subaru Impreza WRX.
Fuji Heavy Industries, and in turn, Subaru are currently affiliates of Toyota Motor Corporation, which owns 8.7% of FHI.

Modified versions of the Impreza WRX and WRX STi have been competing successfully in car rallies; drivers Colin McRae, Richard Burns and Petter Solberg have won World Rally Championship titles with the Subaru World Rally Team. The Subaru World Rally Championship cars are prepared and run by Prodrive, the highly successful British Motorsport team. Several endurance records were set in the early and mid-nineties by the Subaru Legacy.

FHI started out as "The Aircraft Research Laboratory" in 1917 headed by Chikuhei Nakajima. In 1931, the company was reorganized as "Nakajima Aircraft Company, Ltd", the main airplane manufacturer for Japan in WWII.

At the end of the Second World War, Nakajima Aircraft was again reorganized, this time as Fuji Sangyo Co, Ltd. In 1946, Fuji Sangyo created its first Rabbit motor scooter with spare aircraft parts from the war. In 1950, Fuji Sangyo was divided into 12 smaller corporations according to the 1950 Corporate Credit Rearrangement Act, but between 1953-1955, four of these corporations and a newly formed corporation formed by an alliance of the four aforementioned companies were again merged together to form the Fuji Heavy Industries we know today.

Kenji Kita, the CEO of Fuji Heavy Industries at the time, wanted the new company to be involved in car manufacturing, and chose the name Subaru to grace its first car, the Subaru P1 in 1954. From 1954 to 1989 the company designed and manufactured dozens of vehicles including the P1 (1954), the 360 (1958), the Sambar (1961), the 1000 (1965), the 1100 and the R2 (1969), the leone (1971, 1975 and 1977), the Domingo (1983), the Alcyone (1985) and the Legacy (1989).

It is currently an affiliate of Toyota Motor Corporation, with their owning 8.7% of FHI. They acquired that stake from General Motors, who bought 20% of FHI in 1999 to have an extended presence in international markets, and collaborate technologically with FHI. Before that, the stake owned by GM was owned by Nissan, who acquired the stake in 1968 during a period of government-ordered merging of Japanese auto industry to merge in order for improved competitiveness under the administration of Prime Minister Eisaku Sato. Later on, they would utilize FHI's bus manufacturing capability and expertise for their Nissan Diesel line of buses. In turn, many Subaru vehicles, even today, use parts from the Nissan manufacturing keiretsu. In fact[citation needed], it was Subaru that introduced Renault to Nissan when they asked for assistance in all-wheel drive (AWD) technology, when FHI told Renault to discuss their plans with Nissan, the discussions eventually led to the successful Renault-Nissan alliance.

In the United States, the Subaru attracted a following among the young and educated, and as a lightweight SUV alternative to the likes of the Ford Bronco and Jeep Wagoneer or even the expensive Volvo. It has historically been popular in US regions such as the Pacific Northwest , the North American Rocky Mountains region and New England, with relatively high resale values and owner loyalty rates. However, facing pressure from competition from the large Japanese brands, Subaru would switch to marketing only AWD cars and wagons. The Subaru Outback wagon, based on the Legacy and modified with SUV-like stance, bumpers, and roof, became the best selling wagon in the US during the 2000s as many other wagon body styles declined and vanished, notably the Audi Allroad.

In the 1990s the company moved away from small commercial vehicles and concentrated on the development of mainstream passenger car models, starting with the Legacy and including the controversially styled six-cylinder SVX (1992), and the Impreza (1992).

When Subaru introduced the Legacy in 1989, it was a new direction for Subaru, as the Legacy was considered mainstream in its appearance and a departure from their previous vehicles, which had a reputation of being "quirky". It was perceived by some as Subaru's attempt to compete with new luxury brands Lexus, Infiniti and Acura, as Japanese vehicles were increasing in popularity, particularly in the USA.

With the rise of rally racing, and the Import scene in the US, the introduction of the highly anticipated Subaru Impreza WRX in 2001 was successful in bringing high performance, AWD compact cars into the sports car mainstream just like VW/Audi did years before.[1]In 1995 the company created the Sambar EV electric van. In 1997 the Forester was introduced to the world market, followed by the third generation design of the Legacy platform (1998).
During the General Motors period, a modified Impreza was sold in the United States as the Saab 9-2X. A SUV (Subaru Tribeca / SAAB 9-6X) was also planned[2][3]but the SAAB version did not proceed.

From 1995 to 2000, Subaru ran a series of advertisements for the Subaru Outback which starred Paul Hogan. The advertisements were intended to highlight Subaru's all wheel drive, and depicted the Outback in a number of rugged Australian locations. The tagline "the world's first sport utility wagon" was successfully used by Subaru, though the AMC Eagle had tried much the same idea, with less success in the 1980s.

On October 5, 2005 Toyota stated that it will purchase 8.7% of the shares of FHI from General Motors. GM announced that it will divest its 20% stake in and eventually sever all ties with FHI. FHI has stated that there have been 27 million shares (3.4%) acquired before the start of trading by an unknown party on October 6, 2005. It has been speculated that a bank or perhaps another automaker was involved. Toyota announced a contract with Subaru on March 13, 2006. The under-utilized Subaru of Indiana Automotive plant in Lafayette, Indiana will hire up to 1,000 workers and set aside an assembly line for the Camry model, beginning in spring 2007.

On December 20, 2006 Subaru announced the development of a variable vane, common rail turbodiesel boxer engine to power a wide range of products. Subaru has not yet released the displacement or power ratings of this new engine. At the 2007 Geneva Motor Show in Switzerland, Subaru unveiled that it would be available in Europe beginning in 2008.

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