I NTE GR ATEDREPOR T
2022

INTRODUCTION

Pursuing our Goal of“Delivering Happiness to All”

The SUBARU Group, by no means a large automaker, concentrates its limited management
resources in pursuit of the value it provides to its customers, which is “Enjoyment and Peace of Mind.”
The customers who support us value SUBARU vehicles like lifestyle partners.
Together, we are marching ahead to make society better, inspiring our customers to say that
SUBARU is “different.” Our vision of becoming a company “Delivering happiness to all” is somethingthat we have learned from the behavior of our customers, with whom we share deep relationships.
We will put these customers who have nurtured the SUBARU brand first, and continue to pursue
our goal of delivering happiness to people, society, and even the Earth.

Integrated Report 2022 01

Vision, Value statement, Corporate statement

Contents
Value Creation Story

Mechanisms Supporting Value Creation

04 At a Glance
06 Message from the CEO

48 Directors, Auditors, and Executive Officers
50 Outside Directors Roundtable
55	Message from the Chairman of theBoard of Directors
56 Corporate Governance
68 Compliance

Subaru’s Value Creation Story, Told by the President

12 SUBARU’s History of Value Creation
14 Value Creation Process

Commentary on Strategy
16 The SUBARU Group’s Unique Business Model
20 Our Evolving Mid-term Management Vision
22 Mid-term Management Vision “STEP”
22 Overview
24 Six Priority Areas for CSR
26 Progress of Key Initiatives

Corporate Data
70	Business Overview:
Automotive Business Unit
72 SUBARU Core Technologies
73 SUBARU Models through the Years

32 Human Resource Development–from Individual Growth to Organizational Growth38	Handing Down and Enhancing the SUBARU
Difference–Working with the Engineers of Tomorrow

40	SUBARU’s Idea for a Digital
Transformation Strategy
44	Message from the CFO–Financial and Capital Strategies–

46 Risk Management

74 Business Overview: Aerospace Company
76 Consolidated Ten-year Financial Summary
78 Five-year Unit Sales
80	Activities in the Six Priority Areas for CSR
in Relation to SDGs
82 Environment
88 Human Resources
90 Global Network
91 History of the SUBARU Group92 Corporate Data

On Publication
The SUBARU Group wants to achieve our vision of becoming a company “Delivering happiness to all.” By evolving
our value statement “Enjoyment and Peace of Mind” we seek the sustainable growth of the SUBARU Group and theachievement of an enjoyable and sustainable society. In order for a broad set of stakeholders, including shareholders
and investors, to better understand our approach, strengths, and business models that underlie these initiatives, we areworking to enhance our integrated disclosure of financial and non-financial information.
In this Integrated Report 2022, we have provided even deeper disclosure of our value creation story by introducing
specific initiatives and progress in the mid-term management vision “STEP” and the Six Priority Areas for CSR. We willcontinue to utilize this report as one of our tools for communicating with stakeholders, further enhancing our information
disclosure going forward.

Information Disclosure System
Business and Financial Information

Sustainability Information

Integrated Report
To provide consolidated key information on the SUBARU Group and share our value creation story
with a wide range of stakeholders, including shareholders and investors,
we aim to communicate in an easy-to-understand manner for all of our stakeholders.
https://www.subaru.co.jp/en/ir/library/annual-reports.html

Disclaimer Regarding Forward-Looking Statements
Statements herein regarding plans, strategies, and other information that are not historical facts are assumptions, judgments and forecasts based on
information available at the time of creation, and are subject to various risks and uncertainties. Actual results may differ materially from these statements
due to changes in economic conditions surrounding the Company and its Group companies, fluctuations in demand and exchange rates, and otherfactors. Final investment decisions shall be made by investors themselves based on their own judgment and responsibility in light of the above factors.
Please note that the parties providing the information in this report regarding the Company and its Group shall not be liable for any loss or damage
incurred as a result of investment based on the information contained in this report.

Annual Securities Report (Japanese version only)
https://www.subaru.co.jp/ir/library/securities-reports.html

Financial Reporthttps://www.subaru.co.jp/en/ir/library/financial-reports.html

Corporate Governance Guidelines/
Corporate Governance Reports (Japanese version only)
Scope of Reporting

Reporting Period

SUBARU CORPORATION

April 1, 2021–March 31, 2022

* In this report, the “SUBARU Group” and “the Group” refer to the SUBARU Group; “SUBARU”* Some information provided may be from outside the reporting period.
* The departments, titles, etc. of the people introduced in this report are as of the time of writing.

or “the Company” refers to SUBARU Corporation; “affiliated companies (affiliates)” refers to
SUBARU’s subsidiaries in Japan and overseas, including dealerships in the Automotive Business;and “group companies” refers to SUBARU’s subsidiaries in Japan, excluding dealerships in the
Automotive Business.

Website: Sustainability & CSR
https://www.subaru.co.jp/en/csr/

https://www.subaru.co.jp/en/csr/governance/corporate/

Investor Relations Information Website
https://www.subaru.co.jp/en/ir/

Guidelines Referenced
Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for
Collaborative Value Creation, Ministry of Economy, Trade and Industry
The International Financial Reporting Standards (IFRS) Foundation (formerly theValue Reporting Foundation)

02 Integrated Report 2022

Integrated Report 2022 03

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

At a Glance

Composition of Sales

Our Path to Today

FoundedAerospace(Automotive and Aerospace)

97.6%​

2.3%​

Production Sites

Industry Share*4

2

1917

Affiliated Companies*1

94
Automobile Sales Network

Automotive

Aerospace22(Gunma (Japan), Indiana (U.S.))(Tochigi, Aichi (Japan))

Performance andFinancial Soundness

Global ShareApprox.

3.9%​

Ratio by Region*3

Number of Employees (consolidated)

Produced in Japan

36,910locations in Japan

U.S. Market Share

1%*1

Plus locations in more than

90

Segments

operating locations operating locations

*2

Other
0.2%

Automobiles

Chikuhei Nakajima establishes
Aircraft Research Laboratory

440

Businesses

Business Segments

455 thousand units
Units Produced(consolidated)727

countries
and regions

thousand units
Produced in the U.S.

272 thousand units
Consolidated Performance

Revenue*3

Operating profit

2,744.5 billion yen 90.5 billion yen

Other:

27 thousand units

China:

14 thousand units

Europe: 15 thousand units

U.S.:

506 thousand units

Australia: 33 thousand units

Operating margin*3

Capital Stock*3

3.3%

153.8 billion yen

Canada: 49 thousand units

Units Sold(consolidated)734

thousand units

Japan: 89 thousand units

Equity ratio

53.4%

*3

Automobile Category
Issuer Rating

A-(Rating and Investment Information, Inc.)As of October 6, 2021

*1 As of March 31, 2022
*2 As of April 1, 2022
*3 Figures for FYE March 2022

04 Integrated Report 2022

SUV sales

Approx.

80%*4

AWD vehicles

98%

*5

​

Re tail sale s*4 For 2021 (calendar year)*5 Based on sales data from 2018 to 2021 (calendar years). Excludes OEM vehicles from other companies.

Integrated Report 2022 05

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Message from the CEO

SUBARU will make steadyprogress towards becoming acompany “Delivering happinessto all,” enriching people’s lives
and minds as a partner to ourcustomers and society.
Tomomi Nakamura

Representative Director, President and CEO
Profile1982 Joined SUBARU and worked in the Japan Sales and Marketing Division,
Global Marketing Division, and other units
2011 Vice President, Senior General Manager of Strategy Development Division
and General Manager of Corporate Planning Department
2014 Senior Vice President, Chief General Manager of SUBARU Overseas
Sales & Marketing Division 1, Chairman of SOA*
2016 Executive Vice President, Chief General Manager of SUBARU Overseas
Sales & Marketing Division 1, Chairman of SOA
Representative Director, President and CEO since June 2018
* Subaru of America, Inc.

Current Economic Conditions and Performance
Outlook for FYE March 2023

semiconductors throughout the year and supply chain stagnation due to the resurgence of COVID-19 in Southeast Asiaand other regions.

The unified SUBARU Group will work hard to deliver as manycars as possible to our customers.

With further impact from sharp rises in energy and raw material prices, in connection with the situation between
Russia and Ukraine that emerged at the end of FYE March 2022, the balance between supply and demand remains
uncertain.
Amid these circumstances, with extensive cooperation from our suppliers, we made advances in our BCP*1 effortson the procurement side in FYE March 2022, expanding the scope of monitoring the degree of risk impact. On theMore than two years have passed since the global outbreak of COVID-19. During this time, we at the SUBARU Group

manufacturing side, we have also made various efforts, such as flexibly adjusting production plans, in order to produce

have taken a variety of actions to maintain our business activities while simultaneously protecting the health and safety

as many cars as possible despite parts supply constraints. On the sales side, we have been able to further bolster whatof employees and their families. This includes shifting to a new normal for work arrangements, such as bolstering our IT

was already a highly efficient sales operation by utilizing our “pipeline” inventory of units before they arrive at retailers.

infrastructure and abolishing mandatory core hours in the flex-time system. We also held online Premiere events of new

However in FYE March 2022, consolidated sales and profits declined, due to the decrease in automobiles sales volume

vehicles, to create more opportunities for customers to directly come into contact with the value SUBARU provides. I

resulting from reduced production by constraints on the parts supply, and to soaring raw material prices.

commend these efforts that we have made to flexibly respond to changes in the environment and improve productivity

For our FYE March 2023 performance forecast, we aim to achieve 3,500 billion yen in revenue, up 27.5% year on

and operational quality. Meanwhile, the aftershocks from the spread of COVID-19 continue to affect us in the shortyear, and 200 billion yen in operating income, up 121.1% year on year. Thanks to strong demand, especially in theterm. Adjustments to production at our plants have been unprecedented, driven by the impact from the shortage ofNorth American market, we expect to sell 940,000 units and will take on the challenge of producing 1 million units.

06 Integrated Report 2022

Integrated Report 2022 07

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

With continuing challenges in semiconductor supply, we see our performance through the first quarter of FYEWith regard to the three priority initiatives in “STEP”—corporate culture reforms, quality enhancement, andMarch 2023 as largely in line with our plan. We believe it is important to make steady progress with a positive attitude,

evolution of the SUBARU difference—we are making steady progress thanks to continued actions as a unified Group

while maintaining a sense of urgency through the second half of the fiscal year. In July 2022, I attended the retailers’

under the slogan of “change mindset, change actions, change the company.”

conference, in which all SUBARU retailers in the United States took part. Each and every local retailer there said to

One of the most important topics here is quality enhancement, a persistent reform that we are pursuing first andme,“More Cars!”. It made me feel strongly that we have to satisfy those expectations as quickly as possible. Internally,

foremost. Specifically, in January 2021, we established the “FAST*2” quality improvement team in North America toI have also conveyed the message that we will work together relentlessly as a Group to produce and sell as many cars

quickly resolve any defects that may have occurred there. Furthermore, as part of efforts to prevent recurrence ofas possible, and we will work to restore our performance to the level of FYE March 2020, which was just before theimproprieties relating to final vehicle inspections at the Gunma Plant, we have been establishing new final vehicle

COVID-19 pandemic.

inspection buildings independent from production lines. One of the three new final inspection buildings has launched*1 BCP: Business continuity planits operations as of August 2022. In addition, we will speed up our quality improvement by establishing “QA (Quality
Assurance) Lab” to enhance our ability to investigate defects, and by strengthening parts traceability.
Although there is a trend toward improvement, such as a decrease in the number of defects and recalls on a global
basis, our perception is that we have yet to show results to our customers and dealerships. For us, high quality is at theProgress in the Mid-term Management Vision “STEP"

very root of the SUBARU brand, and is a source of added value. We will continue to push forward with further reforms,
including the development of new technologies, so that we can show our customers and retailers real results.

I am seeing steady progress in the priority initiatives
set forth in “STEP.”*2 FAST: Fast Action & Solution Team

Contributions to Building a Decarbonized Society

In May 2021, around three years after the mid-term management vision “STEP” was announced just following myappointment as President in 2018, we made a report to our stakeholders about our progress to date and our policy
for initiatives going forward. This offered us an opportunity to integrate the several principles present at the time.
Our corporate statement is “We aim to be a compelling company with a strong market presence built upon our

As we evolve the SUBARU difference, we will accelerate
activities towards electrification based on our roadmap.

customer-first principle.” With “Enjoyment and Peace of Mind” as the value the SUBARU Group provides to ourcustomers, we will evolve the the SUBARU difference that is unwavering amid changing times and changing external

Regarding environmental measures for sustainable growth, at the SUBARU technology briefing held in January

environments, enhancing the strength of our brand. The phrase “Delivering happiness to all” was announced when

2020, we announced our commitment to “contribute to building a decarbonized society through our distinctive andwe changed our company name from Fuji Heavy Industries Ltd. to SUBARU CORPORATION, and we learned it fromtechnological innovations,” and we are accelerating our efforts in our “CO2 Reduction Roadmap”. We have defined

our customers’ behavior. Taking this opportunity, we defined this term as our “Vision”.

SUBARU’s position in the era of electrification as “smart follower,” as we have long been engaged in research andproduct development related to vehicle electrification technologies. Especially in the past year or two, market trends
have changed rapidly, and we feel that U.S. retailers and our most valued customers are also rapidly becoming moreinterested in climate change issues and electric vehicles.
Deciding that the time was finally right, in May 2022, we launched our first global BEV*3, the SOLTERRA. The
SOLTERRA was jointly developed with Toyota Motor Corporation. The entire team, working together with a passion
to build a better car, tackled its development by engaging in a number of frank, uncompromising discussions until
they built a car that would satisfy. We
have faced the opinion of many thatwith the coming of the electrificationera, SUBARU difference could be lost.
However, this vehicle has received many
positive assessments from customers
and automotive journalists in Japan andoverseas, who say that the SUBARU
difference is still present, even in a BEV.
This experience has given us
confidence that we can make a car withthe evolved SUBARU difference even in
the era of electrification.

08 Integrated Report 2022

Integrated Report 2022 09

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

SUBARU’s accumulated knowledge in all-wheel drive (AWD) has a strong affinity with electric motors, facilitating

directors and executive officers to further motivate them to contribute to the achievement of priority initiatives set

a further evolution of driving stability and reliability. Doing this without loss of SUBARU’s core competencies, such as

forth in "STEP" and to the enhancement of business performance and corporate value over the medium to long

quality and safety, allows us to demonstrate the SUBARU difference even in BEVs. We will keep taking market feedback

term. Specifically, we have decided to incorporate employee engagement (employee satisfaction evaluation) as aseriously, linking it to our future electrification strategy.

new non-financial evaluation indicator in the executive compensation system. More than ever, employees and senior

In parallel with these efforts, we have begun to strategically restructure our domestic production, so that we can

executive management will work together to achieve sustainable growth for the SUBARU Group.

respond to the market’s transition to BEVs. We are targeting the launch of in-house production of BEVs at the Yajima
Plant around 2025, and the additional launch of dedicated BEV production line at the Oizumi Plant in 2027 or later. At
both of these plants, we will establish a high-efficiency, flexible production system. For this series of reorganizations, weplan to invest approximately 250 billion yen over the next five years.
While accelerating electrification, we also look for other ways of contributing to a decarbonized society, throughinternal combustion engines. Since March 2022, we participate in a Japanese racing series “Super Taikyu Series 2022”,with a racing vehicle that runs on carbon-neutral fuel, produced by synthesizing components derived from carbon
dioxide, hydrogen, biomass, etc.
*3 BEV: Battery electric vehicle

Reforming Corporate Culture and Cultivating Talent,the Driving Forces for Growth

We will link the growth of the individual to the growthof the organization and enhance employee engagement.

Toward Delivering Happiness to All

We will further deepen our relationships with customers,to achieve an enjoyable and sustainable society.
In our Vision for 2025 within “STEP,” we declarethat we will “Become a brand that is ‘different’ fromothers by enhancing distinctiveness.” In line withthis vision, we will further deepen this relationshipbetween SUBARU and our customers that makes
us different from other brands. We do this because
we see this relationship as an asset for the SUBARUGroup and the SUBARU brand.

In this once-in-a-century period of revolutionary change in the automotive industry, our human resources are theThis vision of “Delivering happiness to all” is more

key to turn environmental change into opportunity, and to carry out activities to carefully nurture relationships withthan just a catchy slogan. When I look at pictures

our customers. Our organizational culture has undoubtedly changed over the past several years, and in order toand videos posted on social media by SUBARU

encourage the growth of our human resources, we believe it is necessary to move to the next stage of our various

customers, I am always moved by the great number

measures toward corporate culture reforms, a priority initiative in “STEP,” and link the growth of the individual to theof smiling customers with their cars. In these social

growth of the organization.

media posts, as well as in sales and after-sales service, we can see the distinctiveness and true strength of the

In the last three years, we have increased opportunities for employee growth and behavioral change throughvarious dialogue sessions aimed at sharing management issues and promoting understanding of the external

SUBARU brand as told by our customers.
Also, especially in the U.S., our customers are noteworthy in that they have a high level of awareness aboutbusiness environment. With more employees voluntarily raising proposals, I feel an improvement in quality of thesociety and global resources, along with an interest in the safety and reliability of SUBARU vehicles. For customers

dialogues year by year. In FYE March 2023, the Human Resources Department and Corporate Planning Department

who want to help those in need and to do more for society and the environment, SOA*4 and its retailers have been

will work together to accelerate efforts to boost the reforms.

working since 2008 to meet their needs, providing a range of support for local communities through the Love

In addition, more and more employees are raising thoughtful, considered proposals to their managers

Campaign for over 14 years.

and senior executives. Regarding the strategic restructuring of our domestic production mentioned above, a

We will continue to provide “Enjoyment and Peace of Mind” through our various efforts to enrich people’sgroup of young managers who are in line to lead SUBARU around 2025 to 2027 formed a team and constantly

lives and minds, working to be a partner to our customers and society at large. With our aim to become a company

submitted proposals and held bi-weekly discussions with senior executives, helping guide the process to thedelivering happiness to people, society, and even the Earth, we will strive for the sustainable growth of the SUBARU

public announcement in May 2022. A new virtuous cycle is emerging, that not only the traditional “top-down” wayGroup and the achievement of an enjoyable and sustainable society.

to propel measures, but also the growth of individuals who think and act autonomously, is changing corporate
culture to increase company value.

We look forward to the continued support of our stakeholders as we build the future of the SUBARU Group.
*4 SOA: Subaru of America Inc.

We feel that employee engagement has improved with the introduction of a new personnel system in FYEMarch 2022, encouraging employees to independently develop their own careers and take on challenges. In orderto overcome rapidly changing times, it is important to think independently. We will keep expanding the circle ofrevolutionaries who want to change our company, by supporting and motivating the employees who act to change.
In addition, after active discussions with outside directors, we revised the compensation system for internal

10 Integrated Report 2022

Representative Director of the Board, President and CEO

Integrated Report 2022 11

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

SUBARU’s History of Value Creation
We have always been ahead of the curve in using products exemplifying the SUBARU difference torespond to customer needs based in the context of the times. This has created strong relationships withour customers. In particular, we believe that the driver’s universal value of safety is an unshakable
strength felt by our customers in our continuous refinement of all kinds of technologies.

PeriodTo 1950

Customer needs
based in historicalcontext
SUBARU’s value

1950s

1960s and 1970s

1980s

and 1990s

Since 2000

• Postwar
reconstruction• National Car
Concept• Rapid economic growth• Motorization• Leisure (skiing)
boom• Motorsports boom

• The 2008 ‘Lehman shock’ economic downturn• Increasing safety awareness• Increasing environmental awareness• Desiring mobility• Desiring anaffordable car• Desiring a car ride withoutworrying about the weather• Desiring family fun with apersonal vehicle• Desiring leisuretime with friends• Desiring to bond with cars
• Desiring to manifest uniquepersonality• Desiring car safety at all times• Desiring to do more for society and theenvironment

Mobility

provided throughSafety performancecar manufacturing

Family mobility for all
The SUBARU community
An unpretentious, self-actualized style
Technology

Visibility design Primary Safety

embodying our1965 Began crash tests Passive Safety

safety concept

1966 Horizontally-opposed engine

Active Safety

1972 4WD/AWD Active Safety
1989 
Began stereo camera development
Preventive Safety

1999
ADA

(Active Driving Assist)

2008
EyeSight
2016 
SUBARU Global Platform
Active Safety

Passive Safety

2020
SUBARU STARLINK
Connected Safety

Products

1966
SUBARU 1000
Pre-Subaru
Aircraft

1958
SUBARU 360
1972
Leone 4WD
Estate Van

Note: The information above is mainly about the Japanese market.

12 Integrated Report 2022

1989
Legacy1988
Established
SUBARU Tecnica
International Inc.

1992
Impreza2012
SUBARU XV

1995
Grand Wagon

2012
SUBARU BRZ

1997Forester
1997
Three-time World
Rally Championship(WRC) winner

2022
SOLTERRA

2014
LevorgFrom 2008
Participated in the
Nürburgring
24-hour race
Integrated Report 2022 13

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Value Creation Process
With its DNA as an aircraft manufacturer, SUBARU continues to practice the human-oriented approach to Mono-zukuri,
where it places top priority on safety. We hope to enrich people’s lives and minds by providing product value that
embodies the SUBARU difference in pursuit of safety and rough-road capability, and by continuing to meet the various
expectations of our customers who share these values. Toward achieving our vision of becoming a company “Delivering
happiness to all,” we will link the growth of the individual (our employees) to the growth of the organization, further
evolve “Enjoyment and Peace of Mind,” the value we provide, deepen our relationships with customers, and achieveboth sustainable growth for the SUBARU Group and the realization of a sustainable society.

rcu

larity

Sus

ta

in

ab

Enhancing relationships with customers

Customer
expectations

Financial
capitalS

Enjoyment andPeace of Mind

ust
a

in
ab

Manufacturing
capital

le

Ci

rcu

larityIntellectual
capitalDevelopment with afocus on individuals
Respond to
new work styles

Support individuals
who take on challenges

Invest in employee
development

Mid-Term Management Vision

Three Priorities
in STEP

Six Priority
Areas for CSR

Corporate Culture Reforms

People-oriented Car Culture

HumancapitalSocialcapitalResonance and Coexistence
Peace of Mind
Diversity

Quality Enhancement

NaturalcapitalEnvironment

Evolution of the SUBARU Difference

Compliance e aim to be a compelling company with a strong market
Corporate Statement W
presence built upon our customer-first principle.

Sustainable Growth of
the SUBARU Group

Human resource
development

Delivering Happiness to All

Management
ResourcesleCi

Achieving an Enjoyable
and Sustainable Society

Enriching People’s Minds and LivesThe SUBARU Group’s Unique Business Model

Selection and concentration
Work stylechanges
14 Integrated Report 2022

Advancement of innovationin the auto industry+ Differentiation + Added value
ClimatechangeSocial Issues
Resource
Traffic
recycling
accidents

Respect forhuman rights
Integrated Report 2022 15

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

The SUBARU Group’s Unique Business Model
SUBARU is building a unique business model to achieve its vision of being a company “Delivering happiness to all”.
Instead of simply expanding our priorities in our business, products, markets, and development, we aim to achievesustainable growth by selecting and concentrating our business resources in areas where we can best utilize thetechnologies and know-how that we have built up over the years as part of the human-oriented approach to
Mono-zukuri which SUBARU has maintained throughout its history.
In our automotive business, for example, we select and focus on specific areas to provide enhanced functional value
in the form of vehicle safety, durability, and superior handling. This allows us to offer value to our customers in theform of Enjoyment and Peace of Mind. As a result of these efforts, our customers see SUBARU vehicles as more thanjust a means of transport—they are an essential part of our customers’ lifestyles.
We will continue to meet our customers’ expectations and make efforts to enrich people’s lives.
This will allow us to deepen our relationships with our customers and enhance the value of the SUBARU brand.

Enhancing the Most Basic Functions of Our Vehicles to Provide“Enjoyment and Peace of Mind”
SUBARU, which has roots as an aircraft manufacturer, has constantly maintained a human-oriented approach to
Mono-zukuri. Even in the midst of changing times, this approach has always been the core of our manufacturing
philosophy, allowing us to create various unique and advanced technologies by continually taking on challenges
that enrich the lives of our customers and society. Based on this human-oriented approach to Mono-zukuri,
SUBARU will continue to enhance the basic functions of our vehicles—expanding our customers’ freedom of
movement—to provide customers with Enjoyment and Peace of Mind.

SUBARU’s Selected Focus Areas
Ensuring driving safety from every perspective, from putting on
your seat belt to unexpected situations

Business Focus Areas

Primary
SafetyActiveSafetyAutomotive Business

FY2017
Discontinued

Industrial Products Business
Sanitation Truck andWind Power Business

Our priority is not simply expanding
our business. Instead, we concentrate
our business resources by narrowing
down our focus to automobiles andaerospace, where we can best utilize
the technologies and know-how wehave built up over the years.

FY2012
Transferred
FY2003
Transferred

Product Focus

Market Focus

82%

SUVs

667

thousand units

Note: Retail sales
for FYE March 2022

Development and production of minicars ended in 2012. Within
our passenger car segment, we have focused on vehicles in the
SUV category due to their versatility for both daily use and more
active lifestyles.

69%

U.S.

506

thousand units

Note: Consolidated sales
for FYE March 2022

Growth by focusing on the U.S. market, which matches SUBARU’s
car-making and the lifestyles of our customers, and by gaining
further affinity toward SUBARU’s initiatives.

Development Focus
Competitiveness

Collaboration

We focus on Enjoyment andPeace of Mind.

We effectively utilize partnerships tojointly develop vehicles instead ofdeveloping everything in-house.

16 Integrated Report 2022

Connected

Passive
SafetyAerospace Business

Railcar and
Bus BusinessPreventive
SafetySafetyEver since the SUBARU 360 popularized personal car ownership in Japan,
the philosophy at SUBARU has been to give top priority to safety
because people entrust their cars with their lives. The safety technologies
that we continue to refine based on this philosophy are integrated into the concept of delivering All-Around Safety tocustomers whenever they ride in our vehicles, from when they put on their seat belts to unexpected situations. SUBARU’senhanced safety performance constantly receives the highest safety performance ratings from various third parties inand outside of Japan.

Development based on our customers’ car use in the real world
At SUBARU, we place importance on being practical for our customers, which is
why we build cars that match their lifestyles and changing needs. Examples
include a touring wagon that combines a spacious luggage compartment withsporty driving performance, and a crossover SUV that combines off-road capability
with everyday usability. Meticulous attention to materials, structure, and layout
are factors that enhance the safety of the vehicle. This attention to detail
enables us to make the frame thin and strong, which results in a high level ofboth driving visibility and passive safety performance.
Our vehicles are tested on our company’s test track by taking into accountvarious patterns of use by our customers. We also conduct numerous other tests
in harsh environments around the world, including uphill driving, rough roadhandling, and towing. This allows us to collect a diverse array of performancedata which we use to boost the reliability of our vehicles in the real world.

We aim for our cars to be easy to freely control for anyone in any environment
Unless the driver can control the car freely, they will not be able to drive with
Enjoyment and Peace of Mind. The car must respond to the driver’s control ofthe steering wheel without delay, move smoothly without any awkwardness, andnever require steering adjustments when driving straight. This is the kind of carthat SUBARU strives for when refining basic performance—a car that anyone canoperate freely with peace of mind.
SUBARU does not have dedicated test drivers—that job is carried out by ourengineers. Our engineers strive to achieve better basic performance byunderstanding the level of skills possessed by professional test drivers. This
sharpens their ability to feel the difference between the ideal and reality, andtheorize the mechanism behind that difference, which they can then reflect in
the best possible design drawings.
If our engineers cannot acquire the equipment they need to identify thesource of any differences felt between the ideal and reality, they will create
their own equipment to solve the problem.
By constantly making cars informed not just by hard data, but also by sensory
aspects, we are able to exceed the expectations of our customers while
accumulating unique theoretical knowledge and know-how.
Integrated Report 2022 17

Value Creation Story

Enhancing Relationships with Customers

Creating the SUBARU difference for our customers

We at SUBARU have worked to enhance the functionality of our vehicles, including safety and longevity, as part of ourCommentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Our goal of being More Than a Car Company®: SOA‘s Love Promise Initiatives®

efforts to provide value in the form of “Enjoyment and Peace of Mind”. Our customers tell us about their lifestyles,

SOA Launches Programs with Love as the Keyword

experiences, and affinity using words that describe their SUBARU vehicle as a part of their lives. Safety is one area

In the United States, a key SUBARU Group market, SOA has been conducting its Love Campaign since 2008. Every day, SOA

where SUBARU has worked to elevate functional value into emotional value in our customers’ minds, and ourreceives messages from customers saying things like, “I love my SUBARU.” What really stands out is that so many people use thecustomers express this value as caring for beloved family and friends.

word ‘love’ to express their feelings about their SUBARU. Launched with love as the keyword, the Love Campaign involves avariety of initiatives that are closely attuned to customer feelings and values. That approach is especially represented during the

Enjoyment and Peace of Mind

year-end holiday season by the Share the Love® campaign. Large discounts are the norm during the season, but the Share theLove® campaign gives customers who buy a SUBARU vehicle during this period the chance to have SUBARU donate on their

Functional
valuesSafetyLongevity

Capability

Elevated

Elevated

Elevated

Strengths of SUBARU vehicles have come to be expressed more intimately in terms of the customer's life.

Emotional
valuesCaring for beloved
family and friends...

Building precious
memories...

behalf to a charity of their choice. This program is closely attuned to the

SUBARU and its participating
retailers donatedmore than $227 million
to over 1,700 hometown
charities.

sensibilities of customers who are committed to social contribution, and has
been running for the 14 years since 2008.

Enriching life
and adding color
to leisure time...

We will further enhance this “deep relationship between SUBARU
and our customers that makes us different from other brands.”

In the priority market of the U.S., we see many social media posts featuring images and videos of SUBARU vehicles with family
members, friends, and pets in front of gorgeous backdrops. This shows us that our customers recognize our vehicles as more

Evolution from Love Campaign to Love Promise – An Initiative That Makes Us More Than a Car Company
The Love Campaign began as a sales promotion initiative, and over the past 14 years has grown into a more significant activity
that makes use of community networks built through collaboration with more than 630 retailers across the U.S.
SOA and retailers are participating in the Love Promise Community Commitment based on a core belief in helping those in needthan just a means of transportation - they are an integral part of our customers’ lifestyles and aspirations. Many of our customers

through charitable efforts, and the concept that everyone connected with SUBARU should feel loved and respected. Focusing ontell us that they feel attached to our vehicles, and they feel that SUBARU is appealing because it is different to its competitors.

initiatives in five areas of interest, we are making the world a better place through activities for the communities and regions that

This “difference” is truly an asset to the SUBARU brand. The deep relationship between SUBARU and our customers creates

each retailer calls home. Specifically, in addition to the four organizations*1 that SOA partnerships with, retailers independently

emotional value that makes us different from other brands, and we feel strongly that we must continue to enhance it.

support community and regional organizations.

We hope the “Enjoyment and Peace of Mind” that the SUBARU Group provides allows our customers to experience

Love will guide SOA’s aspirations to transcend what it means to be an automaker with programs to link customers, SUBARU

greater joy, fulfillment and attachment to our vehicles. This includes driving experiences that offer “Enjoyment and Peace ofvehicles, and life and lifestyles.

Mind”, active lifestyles, memorable experiences with loved ones, and a deeper relationship between retailer staff and*1 SOA has partnerships with these four national charity partner beneficiaries: the ASPCA, Make-A-Wish, Meals on Wheels, and the National Park Foundation

customers. We will also respond to new expectations from our customers to build a virtuous cycle that further develops ourrelationships and enhances the SUBARU brand.

Subaru of America, Inc. (hereinafter, “SOA”), which is the local sales management company for the U.S., and its participating
retailers work together to make the world a better place all year round with our motto “Do the right things.” Customers whoshare our values and actively support these activities will not be content with ensuring their own happiness. Instead, they are
deeply concerned about society and global resources, and they are making the effort to act in an altruistic way, including
helping those in need and want to improve society and the environment. In many cases, our customers become ourteachers through the various activities we implement to improve society. These ongoing initiatives allow us to build stronger
and deeper relationships with them.
We at SUBARU will continue to work with our retailers to be a trusted part of our customers’ lives. Together with ourLove Promise® Initiatives in Five Areas
SUBARU Loves to Care

SUBARU Loves to Help

SUBARU Loves the Earth

SUBARU Loves Learning

SUBARU Loves Pets

Support for people
battling illness

Support for those in needof housing and food

Activities to protect
the Earth

Support for
education

Animal welfareD onated more than 230,000
blanketsG ifted 31,000 arts and crafts kitsT
 housands of messages ofhope written by SUBARU
retailers and customersD onated approximately
150 million meals to thoseaffected by COVID-19

 ore than 7,000,000 piecesMof hard-to-recycle trash
like coffee cups and snack
wrappers were given a newlife as useful items such as
benches at local schools

 UBARU and its retailers haveS
supported the educations ofmore than 300,000
students nationwide

S upport for 230,000 animals,
including matching with foster
families, rescue, and healthcare

U.S. Accolades for the SUBARU Brand
SOA programs, including Love Promise® initiatives withretailers and customers, rank highly in U.S. consumer

Forbes Halo 100

ACSI®

Forbes ranks SUBARU
among the top 10
brands consumers love.

SUBARU has received top rating in
numerous categories in the American
Customer Satisfaction Index (ACSI)
survey for the automobile industry.
Safety: Ranked 1st (3 years in a row)*2
Driving performance: Ranked 1st*2
Service quality: Ranked 1st*2
E ndurance: Ranked 1st (2 years in a row)*3
P roduction quality: Ranked 1st (2 years ina row)*3
Satisfaction 1st*2

brand evaluations for all industries and in U.S. customer
satisfaction surveys. This has helped to enhance the
SUBARU brand.

customers, we will work to achieve an enjoyable and sustainable society.

*2 Compared to all other measured mass-market automotive companies in the 2022 ACSI surveys of customers rating their own automobile. ACSI® is a registered trademark of ACSI, LLC.
*3 Compared to all other measured mass-market automotive companies in the 2022 ACSI surveys of customers rating their own automobile. The 1st rating is shared with one other automotive company.

	

18 Integrated Report 2022

SUBARU Loves to Care 
https://www.subaru.com/our-commitment/love-promise/subaru-loves-to-care.html

SUBARU Loves Learning 
https://www.subaru.com/our-commitment/love-promise/subaru-loves-learning.html

SUBARU Loves to Help https://www.subaru.com/our-commitment/love-promise/subaru-loves-to-help.html

SUBARU Loves Pets https://www.subaru.com/our-commitment/love-promise/subaru-loves-pets.html

SUBARU Loves the Earth https://www.subaru.com/our-commitment/love-promise/subaru-loves-the-earth.htmls

U.S. Accolades for the SUBARU Brand
https://www.subaru.com/vehicles/accolades.html

Integrated Report 2022 19

Value Creation Story

Mechanisms Supporting Value Creation

Commentary on Strategy

Corporate Data

Our Evolving Mid-term Management Vision
We aim to be a compelling company with a strong market presence built upon our customer-first principle. Under thiscorporate statement, we have worked to enhance the appeal of the SUBARU brand by offering customers “Enjoyment
and Peace of Mind.” We will work to achieve our vision of “Delivering happiness to all” by promoting our mid-term
management vision “STEP.”

2007–2010
Customer Satisfaction:
Our Customers Are Everything

2011–20132014–20172018–2025

Motion-V

Prominence 2020

STEP

At the time of announcement: Representative Director of the Board, President and CEO Ikuo Mori

At the time of announcement: Representative Director of the Board, President and CEO Yasuyuki Yoshinaga

At the time of announcement: Representative Director of the Board, President and CEO Yasuyuki Yoshinaga

Representative Director of the Board, President and CEO Tomomi Nakamura

Management philosophy

Essential features

With the philosophy of “customers come first” at
its core, focusing on improving profitability andinvesting in growth areas with management resources

Aiming to be a compelling company with a strong market
presence built upon its customer-first principle

Major challenges

Reason for formulation

Value statement

Enjoyment and Peace of Mind

2 With the basic philosophy of “customers come first,”“Provide distinctive SUBARU experience”

4 To also grow through the business alliance with Toyota

3 Strengthen sales force and the availability of automotive supply,“Accelerate sales expansion”

5 To grow the level of employee competence andso enhance the organization

4 Overhaul of cost structure and promote alliance with Toyota,“Solidify operational foundation”

Achievements

5 Back up concrete approaches for business,“Improvement in Management”
Achievements

XUV/SUV strategy succeeded
Boosted sales through U.S.-oriented product development
Highly rated collision safety and EyeSight
Cost reduction activities paid off
Achieved low-incentive sales
Achieved highly efficient production

IssuesLowering sensitivity to foreign currency fluctuations
Increasing sale in emerging countries including China
Developing environmental technology and products
Autonomy of three internal companies*
Flexibility to adapt to changes in business environment

We aim to be a compelling company with a strong market
presence built upon our customer-first principle

Pursue the goal of sustainable growth anddevelopment by boosting competitiveness andbuilding a solid business platform at a new stage“Provide value to customers and Enjoyment and Peace of Mind”

Sharing the mindset of “customers come first”
within the Group
Globalization of products
World’s leading safety performance
Expanding sales in U.S. (the most important market)
Reform of profit structure by reducing costs

Aiming to be a compelling company with a strong market
presence built upon its customer-first principle

1 Guiding principle for all activities “Confidence in Motion”<Promote the brand strategy>

3 To strengthen competitiveness in quality and cost

Corporate statement

Five themes

1 To provide a distinctive SUBARU experience for drivers
and passengers
2 To increase sales globally (Most important market: U.S.)

Management philosophy

IssuesCompliance with future environmental regulations
Production capacity shortages
Responding to the needs of new customers
Sensitivity to currency fluctuations

Delivering happiness to all
Vision for 2020
Vision for 2025

Corporate vision
Not big in size, but a high-quality company with
distinctive strengths

1 Become a brand that is “different” from others byenhancing distinctiveness.

Specific goals• No.1 for customer trust• Strong brand• Among the most profitable companies in the industry• Vehicle sales of 1.1 million-plus units

2 Engage in business activities that resonate with customers
by putting them center-stage
3 Fulfill corporate social responsibilities by contributing todiversifying social needs.
Major challenges

Direction for mid-term management visionCorporate culture reforms
Quality enhancement
Evolution of the SUBARU difference

Pursue added-value business
Enhancing the SUBARU brand
Increase tolerance to changes in the business environment
Building a strong business structure

Note: A progress report on “STEP” was made in May 2021, and content waspartially updated.

Achievement

Among the most profitable companies in the industry
IssuesStrong brand
Vehicle sales of 1.2 million-plus units
No. 1 for customer trust

Note: The Motion-V mid-term management plan, originally intended to run from 2011 to2015, was completed ahead of schedule in FYE March 2014. Prominence 2020, the
new mid-term management vision, was launched in FYE March 2015.

* Aerospace Company, Industrial Products Company, Eco Technologies Company

VisionConsolidated Automobile Unit Sales and Operating Margin
Automobile sales(Thousand units)

U.S.

Overseas (Excl. the U.S.)Japan

Operating margin

Operating margin (%)

1,100

17.5

1,000
825

800
700
600

724

657

597

563

555

500

860

14.7

12.4

13.6

640

734

5.3

300

5.8

200

2.9

100

6.3

6

2.9

1.9

3.6

3.3

–0.4
0

0
’08/3

20 Integrated Report 2022

12

11.7

6.3

400

18

1,034

1,001

958

911

900

1,067

1,065

’09/3

’10/3

’11/3

’12/3

’13/3

’14/3

’15/3

’16/3

’17/3

’18/3

’19/3

’20/3

’21/3

’22/3

Integrated Report 2022 21

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Mid-term Management Vision “STEP”: Overview

Creating the Mid-Term Management VisionMarket Strategy

In July of 2018, we formulated our mid-term management vision “STEP,” with the goal of building trust and resonatingwith customers by providing “Enjoyment and Peace of Mind.” Then, in May 2021, we reported on our progress so far.

We aim to maintain and expand our market share in each market by increasing the value we provide to our customers andenhancing the strength of our brand. In our priority market of the U.S., we are making progress toward a 5% market share.

不変の経営理念• Changes in the external environment• Strains from the company’s rapid growth
Lacking fundamental corporate strength

お客様第一を基軸に「存在感と魅力ある企業」
を目指すOnce-in-a-century changes
Backgroundin a mobility society

ありたい姿

Market share for SUBARU vehicles in the U.S.
5.00%

モノをつくる会社から笑顔をつくる会社へ

3.87%

•R
 estore trust by cultivating fundamental corporate strength as soon as possible.

Intentions in developing
the mid-term
2025年ビジョン
management vision•S tay true to the brand principle of providing “Enjoyment and Peace of Mind” to our customers.
•M ake SUBARU more than just a company that is trusted by, and resonates with, our customers.

1. 個性を磨き上げ、お客様にとってDifferentな存在になる
2. お客様一人一人が主役の、心に響く事業活動を展開する
3. 多様化する社会ニーズに貢献し、企業としての社会的責任を果たす

4.00%

3.00%

Concept and Timeline

2.09%

2.00%

1.00%

Significant business/social changes:
Continued steady growth in quality andfurther enhancement of the brand.

Preparations for business/social changes:
Qualitative growth catching up;
steady growth in quantity.

Rapid quantitative growth:
Qualitative growth not keeping pace.

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 (Year)

Quantitative
growthProfit Direction and Capital Policy

Qualitative
growthProminence 2020

Motion-V

2014

Speedily advanceinitiatives

Restore trust

2018

Provide “Peace ofEngage and resonate
Mind and Enjoyment”
with customers
to customers

We aim for an industry-leading operating margin (8%).

Vision for 2030 (Provisional)

Vision for 2025

2025

2030

“STEP” is an acronym formed from the initial letters of Speed, Trust,Engagement, and Peace of Mind and Enjoyment, which are four importantelements of the vision. The letter “T” is emphasized in the logo as SUBARU
considers trust to be the most important element of all. The name also
expresses the Company’s determination to take “steady, strong steps”
before a future jump over social changes.

 apital expenditures and R&D expenditures will be steadily executed for initiatives aimed at enhancing theC
SUBARU difference.
Capital expenditures: In addition to recurring investment (3.5% to 4.0% of revenue), full-scale investment in reorganizing
the domestic production system will begin in FYE March 2024 (250 billion yen over five years)
R&D expenditures: 120 billion yen level/yearWe aim for a ROE of at least 10% while ensuring a capital equity ratio of 50%.
Our stance on shareholder returns remains unchanged.
P ositioning dividends as the main form of return to shareholders with emphasis on stable, continuous returns. Based on theperformance-linked approach, dividend payments will be determined considering the business performance of each fiscal year,
investment plans, and the business environment. (Consolidated payout ratio: 30%–50%)

Vision for 2025

1C
 onducting share repurchases flexibly in line with our cash flow.

Become a brand that is“different” from othersby enhancing distinctiveness.

0

Change the Culture
Corporate culture reforms

2

Engage in business activities
that resonate with customers
by putting them center-stage.

3

Fulfill corporate social
responsibilities by contributing
to diversifying social needs.

Accelerate efforts to become “a company that does the right thing in the right way.”
Continuous efforts aimed at corporate culture reforms.
Mono-zukuri (Car-making)Sales and service

New mobility domain
Alliance enhancement

1Enhance corporate quality

Quality reforms

Enhance quality at
customer contact points

2

Build a strong brandMore enjoyment,
more peace of mind

From “A car you can love” to “A car,a brand, and people you can love”

Generate new value throughconnected car technologies

3

Sustainable growth based on
focus strategy

Launch “Make-a-SUBARU” initiative

Target 5% share in the U.S.
Steady growth in each region

Initiatives to create newtechnologies and businesses

22 Integrated Report 2022

Capital Policy

Shareholder returns

ROE

At least 10% (target)

Capital equity ratio

50% (minimum)

Consolidated payout ratio

30%–50%Share repurchases

Conduct flexibly

Integrated Report 2022 23

Value Creation Story

Mechanisms Supporting Value Creation

Commentary on Strategy

Corporate Data

Mid-term Management Vision “STEP”: Six Priority Areas for CSR
In mid-term management vision “STEP,” which was developed in 2018, we at SUBARU envision becoming acompany “Delivering happiness to all.” To achieve this vision, we have adopted the “Six Priority Areas for
CSR” and will promote initiatives based on the SUBARU Global Sustainability Policy and to fulfill our corporatesocial responsibilities, thereby providing “Enjoyment and Peace of Mind” to our customers and otherstakeholders. The SUBARU Group aspires to be a truly global company with sustainable growth driven by eachand every one of its employees, and to contribute to the realization of an enjoyable, sustainable society.

SUBARU Global Sustainability Policy
Until recently, the SUBARU Group promoted various initiatives in line with its CSR Policy, revised in June 2009. However, tocope with changes in the social environment and in relationships with our stakeholders, we established the “SUBARU
Global Sustainability Policy” in April 2020 as a guideline to be shared by all Group employees on a global basis.
This Policy is applied to Subaru Corporation and all its subsidiaries.

SUBARU Global Sustainability Policy
We, the SUBARU Group, are committed to sustainable business practices designed to promote harmony between people, society andthe environment in the following ways:

SUBARU Group’s Six Priority Areas for CSR
In accordance with SUBARU’s mid-term management vision “STEP,” the SUBARU Group established the Six Priority Areas for
CSR: People-oriented Car Culture; Resonance and Coexistence; Peace of Mind; Diversity; Environment; and Compliance.
To select the priority areas, the SUBARU Group first identified 41 CSR priority topics for which social needs were high andthen conducted a questionnaire among experts and investors in North America and Japan. The responses and opinions we
received were used in an assessment and exploration of these areas from two perspectives: areas in which we can engage thecommunity by leveraging our business strengths, and areas related to the demands of society. As a result, the SUBARU Group
selected People-oriented Car Culture, Resonance and Coexistence, Peace of Mind, and Diversity as the four areas where
SUBARU could engage our communities by leveraging our business strengths, and Peace of Mind, Diversity, Environment, andCompliance as the four areas where the SUBARU Group could work to meet the demands of society.
Peace of Mind and Diversity appear in both categories, because Peace of Mind is an area in which society’s needs and thestrengths of the SUBARU Group’s business coincide, while Diversity refers not only to diversity in the community, but also todiversity in a broad sense, including in the products that the SUBARU Group offers to customers.
In May 2021, SUBARU announced its progress report for mid-term management vision “STEP.” Its priority areas in this vision
are fundamentally unchanged. Based on the SUBARU Global Sustainability Policy, SUBARU will promote initiatives in the Six
Priority Areas for CSR on a group-wide, global basis with the goal of becoming a company “Delivering happiness to all.”

Reflecting SUBARU Group’s Six Priority Areas for CSR in Management
SUBARU Group

SUBARU

Executive Management
Board Meeting

Reflection
in management

Priorities specific
to SUBARU

Board of Directors

Resonance andCoexistence

Areas in which the Company can
engage communities byleveraging its business strengths
Priority areas selected from thebusiness strategy perspective

Peace of Mind

Information disclosure
Board of Directors
and dialogue

3.	As a good corporate citizen in the international community, we respect human rights, diverse values and individuality, and treat all
stakeholders with sincerity in every interaction.
4.	We strive to maintain and advance the workplace environment so that employees can work safely in peace, and with a senseof satisfaction.
5.	We respect international rules and the laws and regulations of each country and region, as well as local culture and customs,
and pursue fair and transparent corporate governance.
6.	We make use of dialogue with stakeholders to make management decisions, and disclose corporate information in a timely andproper manner.

Six Priority Areas for CSR: Visions for 2025 and Relevant SDGs
The Sustainable Development Goals (SDGs) for 2030 are development goals for achieving a sustainable future, and the
SUBARU Group recognizes the importance of responding to these goals.
By clarifying visions for 2025 regarding the Group’s Six Priority Areas for CSR, SUBARU will reinforce its efforts in eachpriority area and make positive contributions toward achieving the SDGs. Specifically, we acknowledge that the SUBARUGroup’s initiative to achieve a goal of zero fatal traffic accidents* by 2030 contributes to Target 3.6 of the SDGs: “By 2020,
halve the number of global deaths and injuries from road traffic accidents.”

Society’s
expectations

Six Priority Areas for CSR

Basic Concepts

People-oriented
Car Culture

SUBARU believes that a car is more than just a means of transport.
SUBARU will foster a sustainable mobility culture by providing
customers with added value in the form of products and services whichmake the car a partner that enriches people’s lives and minds, whilecherishing the human emotions of “Enjoyment and Peace of Mind.”Become a company that enriches people’s lives andminds as a partner.

Resonance andCoexistence

SUBARU will become a company that is trusted by, and resonatesand coexists with, both individual customers and society as a wholeby engaging seriously with their voices through greater person-toperson communication.

Become a company that is widely trusted by, resonatesand coexists with society.

Peace of Mind

SUBARU will become a company that provides all stakeholders withthe utmost peace of mind.

Become a company that provides the utmost peace ofmind to all stakeholders.

Diversity

The SUBARUu Group’s approach to promoting diversity has two key
elements: offering products that respect diverse forms of market
value, and respecting and reflecting the diverse values of all those
who work for the SUBARU Group.

Promote businesses that create diverse forms of market
values while respecting the diverse values of all people.

Stakeholders

Diversity

Environment

2.	Respecting the quality and originality of our products, we will continue to provide SUBARU’s unique value using advanced
technologies, and enrich the lives of all those involved with the SUBARU Group.

* Reducing to zero the number of fatal accidents occurring while a driver or passenger is in a SUBARU vehicle and the number of fatalities among pedestrians, cyclists,
and the like arising from collisions with a SUBARU vehicle.

Six Priority Areas for CSR
People-oriented
Car Culture

1. 	Through our business activities, we will contribute to the resolution of various social issues, including the protection of the global
environment, and to the creation of a sustainable society.

Areas related to thedemands of society
Priority areas selected from issues
regarded as critical by experts andinvestors in North America and Japan

Compliance

SUBARU Global Sustainability Policy

Relevant SDGs

Environment

In order to pass on “The earth, the sky and nature,” SUBARU’s fields
Cherish and protect the global environment—The earth,of business, to future generations, we provide utmost care to thethe sky and nature—through Group-wide activities.
environment with our company-wide activities.

Compliance

SUBARU will become a company that operates in accordance withlaws, regulations, and societal norms, ensuring that our focus oncompliance as a priority permeates throughout and is practiced by
all those who work for the SUBARU Group.

Human Rights Policy

Human Rights Policy Appendix

Responsible Mineral Procurement

24 Integrated Report 2022

Visions for 2025

Quality Policy

Green Procurement Guidelines

Act in good faith and become a company that is trusted
by and resonates with society.

Fundamental Procurement Policy

SUBARU Environmental Policies

SUBARU Supplier CSR Guidelines

SUBARU Guidelines on Biodiversity

Social Contribution Policy

Integrated Report 2022 25

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Mid-term Management Vision “STEP”: Progress of Key Initiatives
Corporate Culture Reforms

Quality Enhancement

Based on our slogan for Corporate Culture Reforms, “Change mindset, change behavior, change the company,” we havecontinuously held company-wide activities, including various dialogues to share information about business challenges
and learn about businesses outside the Company. Specifically, from FYE March 2022 we launched our Dialogue with the
President and External Dialogue, which management leaders from other companies are invited to. These are held in
addition to the existing Officer Speech Relay and Dialogue with General Managers Relay that began in FYE March 2020.
We are steadily increasing these activities to change the mindset of individual employees and their behavior. The
enhancement and utilization of IT tools was accelerated by the COVID-19 pandemic, providing the momentum that is
helping to revitalize the organization by generating spontaneous company-wide communication spanning a range of
departments and job positions. As a result, employees are feeling the effects of these changes, with Employee Attitudes
Survey scores for “openness in the workplace” showing continuous improvement for the fourth straight year.

SUBARU is pursuing Quality Enhancement initiatives as a key theme of its mid-term management vision, “STEP”.
We are promoting activities in three areas to achieve Quality Enhancement: 1) Thorough implementation of a “QualityFirst” mindset and reinforcement of organizational efforts and structure, 2) Execution Quality enhancement, and 3) Innate
Quality enhancement. While we have made steady progress in these areas, we have not been able to fully present ourachievements to customers and dealerships. High quality is the bedrock of the brand and the source of the added-value
strategy. We will continue to proactively promote Quality Enhancement and aim to produce results in a consistent manner.

FYE March 2022 Results of Employee Attitudes Survey on Corporate Culture Reforms (Response rate: 94.7%)
Workplace communication feels active and open
61.1%
UP 1.8 points
59.3%
UP 3.8 points
55.5%
UP 2.7 points
52.8%

FYE March 2022
FYE March 2021
FYE March 2020
FYE March 2019

0

10

Agree

20

Somewhat agree

30

40

50

60

Neither agree nor disagree

70

80

90

Somewhat disagree* FAST: Fast Action & Solution Team

100 (%)DisagreeThrough activities, the workplace atmosphere shows signs of positive change and improvement
FYE March 2022

55.7%
UP 0.5 points
55.2%
UP 6.1 points
49.1%
UP 1.5 points
47.6%

FYE March 2021
FYE March 2020
FYE March 2019

0

10

20

30

12.8%
Up 0.5 point
12.3%
Down 1.7 points
14.0%
Down 3.3 points
17.3%

UP 8.1 points

40

50

60

70

80

90

2. Execution Quality Enhancement
This initiative aims to prevent the flow of defects downstream after the production preparation stage. We are promoting initiatives
to rapidly implement measures to resolve defects that have occurred in the market, and improve the response speed of quality
improvement. Specifically, we set up FAST*, a quality improvement team, to strengthen the quality assurance system and promote
rapid issue resolution in North America. At the same time, we are working to establish the QA Lab at our Gunma Plant to enhance
our ability to investigate the causes of defects, investigate defect trends using artificial intelligence (AI), and strengthen parts traceability.

13.7%
Down 0.5 points
14.2%
Down 2.7 points
16.9%
Down 2.4 points
19.3%

UP 8.3 points

1. Thorough Implementation of a “Quality-First” Mindset and Reinforcement of Organizational Efforts and Structure
To establish the foundation for quality enhancement, we are reviewing our quality policy and renewing quality manuals to redefine
SUBARU’s vision. We are also carrying out ongoing company-wide educational and reflection activities, such as Quality Caravan eventsand activities to prevent lessons learned in the past from fading away, to encourage renewed quality awareness among individual employees.

3. Innate Quality Enhancement
Innate Quality Enhancement involves reforming all processes from the initial planning stages to development and design. This
allows us to ensure quality throughout the entire manufacturing process, from the earliest stages of development to production
and distribution. Employees responsible for development will be given more authority and there will be a stronger focus on theuse of stage gate project management for quality targets from the initial development stages. We are also changing development
processes so that a project cannot proceed to the next stage until it has cleared the previous stage.

Accelerating Quality Enhancement in Three Areas, as a Top Priority

3

100 (%)

2

Innate Quality
Enhancement

Execution Quality
Enhancement

From Individual Growth to Organizational Growth: the Human Resources Department andCorporate Planning Department will work together to accelerate reforms

Ensure quality from the very start of development
down through component logistics and production

 onstruction of a new final vehicle inspection
C
facility (partially operational as of August 2022)

Fully check past issues in development, production, and suppliers
Identify changes in new parts and systems and prevent issues before they occur

Swift response to quality issues

Now that employees have become accustomed to thinking and acting on their own volition, from FYE March 2022
onward, we are implementing Corporate Culture Reform activities focused on the growth and development of individual
employees, and we will boost engagement so that each employee can feel their growth and job satisfaction. In FYEMarch 2023, we have integrated Corporate Culture Reforms, formerly led by the Corporate Planning Department, with
Workstyle Reforms and our Personnel Strategy led by the Human Resources Department, and those 2 departments will
work together to accelerate efforts to boost the reforms.

 larify the quality responsibilities of the Project General
C
Managers in charge of product development and enhancetheir authority
 tricter development process where meeting criteria ofS
each quality gate (checkpoint) is given top priority

1

VisionStrengthening individual growthIntegration
by focusing on human resources
Linking organizational growth to SUBARU’s growth

Delivering happinessto allTOPICS

Development witha focus on individuals
Change mindset, change behavior, change the company

COVID-19
Corporate Culture Reforms

Becoming a company that does
the right thing in the right way
Improper conduct concerning
final vehicle inspections

2017−2020

26 Integrated Report 2022

2021

Thorough Implementation of a Quality-First Mindset andReinforcement of Organizational Efforts and Structure

Redefine goalsQ uality awareness, reflection activities

Increase in personnelQ uality Policy revised for the first timein 25 yearsF ull revision of the quality manualQ uality Caravan eventsC ompany-wide efforts to prevent lessons
learned in the past from fading awayIncrease in Quality Assurance Divisionpersonnel by 50% over 3 years

Growth for SUBARU
Now!

A company open to new ideas

North American quality team FAST
Early detection of defect trends based on analysis using AI
Direct gathering of quality data via telematics systemsE arly determination of the scope of affected parts withtraceability systemsN ew QA Lab facility for enhancing our capability toinvestigate defects

2022

2023− (FY)

Tatsuro Kobayashi, Senior Vice President,
General Manager of Human Resources
Department in charge of Corporate
Culture Reforms (left) andTomoaki Emori, Senior Vice President,
Chief General Manager of Corporate
Planning Division (right)

New Final Vehicle Inspection Building

At the Gunma Plant, we are reviewing processes and building and updating our Final Vehicle
Inspection Buildings to implement more stringent final vehicle inspections. In August 2022,
one of the three new final inspection buildings has launched its operations in Japan. Use of the
facility will be expanded to other lines in the future. SUBARU will continue to strive to become
the brand that is the preferred choice for our customers through quality that allows them touse our vehicles with peace of mind for many years to come.

For more information on Quality, visit:https://www.subaru.co.jp/en/csr/social/quality_automobile.html

Integrated Report 2022 27

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Evolution of the SUBARU Difference
SUBARU’s Future Direction

Contribute toward achieving
a carbon-free society

Aim forzero fatal road accidents

with SUBARU strengths
and technological innovation.

by 2030.

Further advance our technologies to deliver “Enjoyment and Peace of Mind.”
Maintain the SUBARU difference even in the age of vehicle electrification.

Following the domestic market launch of EyeSight X,
which offers enhanced features that provide greater
safety and comfort when traveling on roads specificallydesignated for automobiles, in 2022 we added a new
wide-angle single-lens camera capable of recognizing
objects in a wider area to our Outback model for North
America. We will improve Advanced Driver Assistance
Systems (ADAS) to further avoid and mitigate accidents,
and reduce at-fault traffic accidents.
For no-fault accidents, we will aim to achieve zerofatality road safety by 2030 by strengthening ourexisting four safety performance areas and adding
Connected Safety in the form of our Advanced
Automatic Collision Notification (AACN) system.

Plan to Achieve Zero-Fatality Road Safety
Present
Causedby othervehiclesADAS enhancement65%
reduction

Causedbyown
vehicleAdvanced
Driver-Assistance
Systems

Down to zero
fatal traffic
accidents
by 203035%

AACN utilization
Advanced Automatic
Collision Notification

reduction

Causedby othervehiclesContinual
improvement ofpassive safety

Caused byown
vehicleSUBARU’s All-Around Safety
In our mid-term management vision “STEP” announced in 2018, we declared our goal of working toward zero-fatality
road safety*1 by 2030, attaching particular importance to protecting lives.
SUBARU will enhance the safety performance of its cars from every perspective as we aim to achieve zero-fatality roadsafety by 2030. We will do this by making the four existing areas of Primary Safety, Active Safety, Preventive Safety, andPassive Safety even better, while also adding Connected Safety.
*1 Zero fatal road accidents occurring while a driver or passenger in a SUBARU vehicle and the number of fatalities among pedestrians, cyclists, and the like arising fromcollisions with a SUBARU vehicle.

Basic design features for avoiding accidents
Primary
SafetySafe situation

Increasing driving safety through basic design
features such as car shape and controls
Designing for visibility

Hazardous
situation

Preemptive
accident
avoidance

Driving position

Interfaces

The ultimate in driving performance for greater safety
ActiveSafetyFacilitating hazard avoidance by improving the performance ofbasic car functions: driving, turning, and stopping
Horizontally-opposed engine

Symmetrical AWD

SUBARU Global Platform

Car Assessments
SUBARU vehicles undergo safety performance testing and assessment by public organizations inside and outside of Japan,
including JNCAP*2 in Japan, IIHS*3 in the U.S., Euro NCAP*4 in Europe, and ANCAP*5 in Australia, and have gained thehighest rank of assessment in most of them.
In FYE March 2022, the new Legacy Outback won the JNCAP Five Star Vehicle Safety Performance 2021 Award, thehighest rating in the JNCAP. This is the second consecutive year that we have earned this highest rating, following lastyear’s win by the Levorg. At the IIHS, as of May 2022, six of SUBARU’s 2022MY (model year) vehicles had won theorganization’s 2022 TOP SAFETY PICK+ (TSP+) Award, and two vehicles had won its 2022 TSP Award. In addition,
SUBARU’s Ascent and Forester were selected for the IIHS Seat Belt Reminder evaluation test, a program launched in
March 2022. Both vehicles received the highest rating of “Good.” Euro NCAP and ANCAP both gave the Outback afive-star rating in their 2021 assessments.
*2 JNCAP (Japan New Car Assessment Program): A car assessment program conducted by the Ministry of Land, Infrastructure, Transport and Tourism andthe National Agency for Automotive Safety and Victim’s Aid (NASVA)*3 IIHS: Insurance Institute for Highway Safety*4 Euro NCAP: European New Car Assessment Programme, a safety information disclosure program for automobiles in Europe*5 ANCAP: Australasian New Car Assessment Program, a safety performance assessment program conducted since 1993 by an independent organization
created by Australian and New Zealand transit authorities

Recent Awards
Model

Organization

Advanced technology that supports safe driving
Accident

Preventive
SafetySupporting safe driving by helping avoid collisions
and reduce damage
EyeSight

An extra level of safety, just in case
Passive
SafetyCollision
Damagereduction
during an
accident
Spread ofdamageProtecting both passengers and pedestrians
Engine layout

To save even more lives
24-hour/365-day access to rapid emergency assistance

Advanced Automatic Collision Notification (AACN) system

28 Integrated Report 2022

Legacy Outback

JNCAP, Japan

Vehicle Safety Performance
JNCAP Best Award 2021
JNCAP Five Star Award 2021

2022 model year editions of the Crosstrek Hybrid, Legacy,
Outback, Forester, Ascent, and BRZ (equipped with
EyeSight) (as of May 2022) (U.S. models only)

IIHS, U.S.

2022 TSP+ Award *6

IIHS, U.S.

2022 TSP Award *6

OutbackEuro NCAP, Europe

2021 Five-star rating

Outback

ANCAP, Australia

2021 Five-star rating

2022 model year editions of the Impreza (5-door)
and Crosstrek (all equipped with EyeSight andspecific headlights) (U.S. models only)(U.S.-specification models only)(U.S.-specification models only)

SUBARU Global Platform

Pedestrian protection airbag

Connected
SafetyAssessment*6 In the IIHS’s publication of vehicle safety information, the TOP SAFETY PICK (TSP) Award is given to vehicles that earn the rating of “Good” for all test results including theOffset Frontal Test, the Driver-side Small Overlap Front Test, the Passenger-side Small Overlap Front Test, the Side Crash Test, the Rear Impact Test, and the Rollover Test andthe rating of “Acceptable” or higher in the Headlight Evaluation, as well as the rating of“Advanced” or higher in the vehicle-to-vehicle and vehicle-to-pedestrian tests. In
addition to these ratings, vehicles which have standard equipped headlights that are rated “Acceptable” or higher are awarded the TOP SAFETY PICK+ (TSP+) Award.

Integrated Report 2022 29

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data
Evolution of the SUBARU Difference

Contributing to the Achievement of a Carbon-Free Society by Further Enhancing the SUBARU Difference
SUBARU will contribute to a zero-carbon society by demonstrating the SUBARU difference through distinctiveness andtechnological innovation. Specifically, our plan is to ensure that at least 40% of SUBARU global sales are battery electricvehicles (BEVs) *7 and hybrid electric vehicles (HEVs) by 2030. We also aim to apply electric powertrain technology to all
new SUBARU vehicles sold worldwide by the early 2030s. By 2050, we aim to reduce well-to-wheel*8 CO2 emissions by
90% or more*9 compared to 2010 levels.
*7 BEV: Battery electric vehicle*8 Well-to-Wheel: Approach to calculating CO2 emissions including the emissions produced by the generation of electricity to be used by EVs and other vehicles*9 R
 educing total CO2 emissions calculated based on the fuel efficiency (notified value) of all SUBARU automobiles sold across the world in 2050 by 90% or more relative to 2010
levels. Changes in the sales quantity due to changes in the market environment will be taken into consideration, while minor changes such as driving distance will not.

Environmental efforts with commitment to enhancing the SUBARU difference

CO2 reduction roadmap
2030

Make at least 40% of SUBARU global sales BEVs or HEVs.

By the 1st halfof the 2030s
2050

The AWD system, unique to BEVs, uses separate motors to drive thefront and rear wheels. This system leverages technology built up by
SUBARU over the years for exerting precise control of all four tires, andsuperior responsiveness and flexible front-rear power distribution
afforded only by a motor. This achieves excellent driving stability thatuses the gripping force of all four wheels to their maximum potential.
A notable feature of the newly developed e-SUBARU Global Platform
is the partial integration of the battery in the frame, which achieves
more strength and rigidity than ever before. This contributes to better
handling stability and allows drivers to enjoy the driving quality of a
SUBARU. The structural architecture efficiently absorbs collision energy
to thoroughly protect not just the passengers, but also various
electronic components.
At test driving events for automotive journalists held in Japan, theU.S., and Europe, many drivers said they were able to actually feel the
SUBARU difference. Going forward, we will pay close attention to
feedback from our customers and link it to our future BEV strategy.

Apply electrification technologies*11 to all SUBARU vehicles*10 sold worldwide.

Reduce average well-to-wheel CO2 emissions from new vehicles sold worldwide
by at least 90% compared to 2010 levels.
Contribute toward achieving carbon neutrality
With highly responsive electric motors, SUBARU’s AWD capability
and driving dynamics will be further enhanced.
We will continue to enhance the SUBARU Difference in the age of electrification
and accelerate the roadmap toward 2050.

*10 Excluding models supplied by OEMs
*11 Refers to technology that boosts the use of electrical power, such as EVs and HEVs

New Model BEV—SOLTERRAThe SOLTERRA is SUBARU’s first global BEV that is packed with
“Enjoyment and Peace of Mind”, carefully cultivated by our company
over many years. Customers can choose this environmentally friendly andpractical model with the same peace of mind as previous SUBARU vehicles.
This development project was carried out jointly with Toyota Motor
Corporation (hereinafter, “Toyota”). During the process of creating atruly outstanding vehicle, both companies knew the SOLTERRA would
serve as the foundation for future SUBARU BEV models, and madea firm commitment to create a BEV that would feel like any other
SUBARU model to customers.
Under the motto, “Let’s fight nice and friendly,” both companies
engaged on an equal footing. Rather than compromise, we held
repeated discussions with Toyota’s team, which, as a result, enabled
us to fully realize SUBARU’s unique approach to car manufacturing.

Reorganization Plan for Our Domestic Production System
Although it is difficult to precisely predict the timing of the large-scale transition to BEVs that is expected to arrive in the
future, we are planning a strategic reorganization of our domestic production system to ensure that we can respond to
this change. We are considering starting in-house production of BEVs (around 2025 is our target) and adding a specialized
BEV production line after 2027 to increase the number of models and units. Additionally, we are steadily working to use
the next-generation e-BOXER system, which uses the TOYOTA Hybrid System (THS), on our horizontally-opposed engine,in several models.
During the transition period to BEVs, we will establish a flexible system that can also produce gasoline and hybrid vehicles
to achieve even more highly efficient BEV production, with the aim of improving our business performance.
We will continue to provide products which satisfy our customers while carefully monitoring trends related to the market
and environmental regulations, as well as the convenience of BEVs, including infrastructure.

Strategic reorganization of domestic production for the expansion and acceleration of electrified vehicle development
2022
BEV

Mid-2020s

2027 and beyond

SOLTERRA released(Production launch through the alliance)

Starting in-house BEV production (Starting with ICE/BEV mixed production line)

Adding dedicated BEV
production line
HEV

Introducing next-generation HEV models (Adopting THS* technology)*THS: TOYOTA Hybrid System

30 Integrated Report 2022

Integrated Report 2022 31

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Human Resource Development —from Individual Growth to Organizational Growth
We intend to achieve continued sustainable growth for the SUBARU Group amid a rapidly changing businessenvironment. In order to do so, it is important to cultivate human resources who think and act individually inresponse to various changes.
We will boost employee engagement by promoting the training of human resources who will lead SUBARU in
the future to fulfill our vision of “Delivering happiness to all”, and link individual growth to organizational growth.

Diversity
Appropriate evaluations and compensation

Fostering a better
corporate culture

Job rotation system to ensure the right person is in the right position

Company policies and messaging

Improvement activities in the workplace

Boosting
engagement

Organizational
growthIndividual
growthEnhancing
corporate value
Challenges

Job satisfaction andfulfillment

Encouraging autonomyIdentifying with our
corporate philosophy

New Personnel System
In April 2021, we launched a new personnel system that encourages employees to take on new challenges.
The three points below outline our organizational ideals under the new personnel system. We will achieve the organizational
cultural reforms promoted by our mid-term management vision “STEP”, and strive to change the mindsets and behaviors of
our employees.
2. Evaluations and treatment are fairand commensurate with work

We provide career training as an opportunity for each employee to take a look back at their career progression. They
analyze their current strengths and weaknesses so they can develop their careers autonomously. Employees visualize
and share where they want to be and what they want to achieve in the next three to 10 years using a career design
sheet. We also offer career management training and career consultations for managers so that they can receive
support for their career development from their workplaces and supervisors.
Autonomous skill development programs

SUBARU aims to train human resources who can act autonomously and play a leading role in creating change. We arealso developing a corporate culture that encourages individual employees to develop their own careers and take on new
challenges in an environment that allows diverse human resources to play an active role. Specific examples include theintroduction of a new personnel system, training program, and open-call job rotation in FYE March 2022. These initiatives
will raise each employee’s motivation and satisfaction, which will lead to greater employee engagement. We are also
working to boost corporate value by achieving a deeper level of empathy with SUBARU’s philosophy of becoming asource of fulfillment and pride.

1. Employees who take on new
challenges can grow and succeed

SUBARU promotes various initiatives where the ideal employee is defined as someone who continues to take on new
challenges independently based on their affinity with SUBARU’s philosophy.
Career training and career support

Capability improvements (investment in training)

Expansion of work styles and enhancement of workplace environments

Human Resource Development that Encourages Employees to be Autonomous and take on New
Challenges to Achieve their Goals

SUBARU offers a range of programs to assist with business skill development for all employees, including regular
employees and management-level personnel. Programs can be chosen according to the employee’s skill level andtheir reason for acquiring additional skills. We provide support to employees so that they can think independently
and choose the skill development they need based on their personal career plan and their individual strengths andweaknesses. We are also proactively utilizing external seminars to increase opportunities to learn and connect withpeople outside the Company to gain new insights.
As a result of these efforts, the score for “Opportunities for improving abilities” in the Employee Attitudes Survey
in FYE March 2022 improved significantly by more than six points compared to the previous fiscal year.
SUBARU offers training for selected managers and mid-level employees with the aim of continually fostering thenext generation of managerial talent.
Open-call job rotation
SUBARU introduced an open-call job rotation system in FYE March 2022 as a scheme to support employees indeveloping their ideal careers. Many departments are already making use of this system. Employees can choose to
apply for positions available in each department (open calls include job description, conditions, etc.) If both parties
agree to the conditions of employment, the employee is transferred to their new position. This system leads toimproved motivation as employees utilize their skills and acquire knowledge in new areas.
Each of these initiatives are promoted throughout the SUBARU Group, and are being carried out at affiliatedcompanies around the world in accordance with regional characteristics.

Scheme for Autonomous Career Development and Career Support in the Workplace
Individual career analysis

Career support in the workplaceand from supervisors

Encouraging employees to takeon challenges independently

Career design sheet*

Career interview

New careers

3. Human resources with a diverse setof abilities can succeed<Main initiatives of the new personnel system>
We are promoting the following five actions as the main measures of the new personnel system:1) Introduce a personnel system that enables faster promotions and personnel selection than before by focusing on results
achieved by taking on challenges, rather than age or experience2) Revise the pay system into a more dynamic scheme by discouraging seniority-based pay, encouraging pay rises by risingthrough ranks, and paying bonuses based on results3) Introduce a specialist system aimed at boosting the technical capabilities and motivation of engineers4) Introduce a new re-employment system that promotes the active participation of diverse human resources, including seniors,in active roles5) Abolish the executive age limit for management-level personnel, and introduce a system that appoints them based on
performance and ability

32 Integrated Report 2022

Career training
Skill development (autonomous)

Open-call job rotation
Strategic job rotation* Targeted at section leader-level employees in FYE March 2022, and at all back-office employees in FYE March 2023

Integrated Report 2022 33

Value Creation Story

Mechanisms Supporting Value Creation

Commentary on Strategy

Corporate Data

Diversity Management

Efforts to Boost Employee Engagement

The SUBARU Group aims to continue creating the unique value provided by the SUBARU brand. To achieve this goal,
SUBARU employees with a diverse range of individual characteristics and values need to be able to fully utilize their own
unique talents. This is why SUBARU respects diversity in the form of gender, nationality, culture, and lifestyle, and strives
to create a positive workplace environment for everyone. In addition, SUBARU’s affiliated companies in Japan andoverseas promote initiatives in accordance with the business domain of each company and regional characteristics. In
January 2015, we established the Diversity Promotion Office to facilitate active participation by all human resources
including female employees, mid-career hires, and foreign national employees. This office strives to create employeefriendly workplace environments, place the right human resources in the right positions, develop human resources, andfacilitate promotions to managerial positions. The office recognizes that promoting active roles for female employees is a
top priority. Efforts are being made to create work environments where all human resources can work in an enthusiastic
manner. In 2020, we began holding regular online seminars by outside speakers on topics such as LGBT issues and theemployment of people with disabilities. In 2021, we set up an external hotline for consultation about LGBT-related issues.

Employee engagement (employee satisfaction rating) is a rating in the Employee Attitudes Survey that reflects fulfillment
from work and pride in the company. We are implementing various initiatives aimed at boosting this rating to 70% by2025. From FYE March 2023, compensation for directors will be subject to an employee engagement rating (employee
satisfaction rating) as a qualitative (non-financial) evaluation criterion.

Empowerment of female employees
SUBARU is working to promote active roles for female employees by establishing Support for Balancing Work andChildcare and Support for Career Development as the two pillars of its action plan that will continue until March 2026.
We are also supporting the health of female employees so that they can continue working throughout various life events.
We aim to more than double the number of female employees in managerial positions by 2025 compared with the levelin 2021. As of the end of March 2022, 24 of the 1,113 employees in managerial positions were women.
We also established the Women’s Leadership Program (WLP) to develop our human resources. Female employees
seeking managerial positions share their career plans, goals, and challenges, and the program then provides guidance
and training tailored to each individual. We are working to empower women to develop their own unique careers,
including providing training for female leaders by establishing a career training system for all women at our company,
from young employees to managers. We are also holding health seminars for employees and their managers to promotebetter awareness about physical changes that women experience at particular ages and phases in their lives.
Through these efforts and unconscious bias training, we are working to develop a corporate culture andworkplace environment that facilitates active participation by everyone, allowing each person to make the most of theirindividual abilities.

Various Initiatives Aimed at an Employee Engagement Rating (Employee
Satisfaction Rating) of 70% by 2025

Employeeengagement

Fulfillment
from work

Pride in thecompany

Management by supervisors
and interpersonal relations
Opportunities for improving abilities

Identifying withthe corporate philosophy
Keeping up withchanges at SUBARU(%)
80Results of the Employee Attitudes Survey
Percentage of those who feel both pride in the company andfulfillment from their work

Target for
2025

70%

70
60

49

50
40

46

42

50

50

2020

2021

30
2017

2018

2019

2025 (Year)

Implementation of Various Measures Related to both “Fulfillment from Work” and “Pride in the Company”
Initiatives to boost engagement
Senior executive management

Management level

General employees

Message from the President

Facilitation and coaching training

Executive engagement declaration (includes KPIs)
Use of Employee Engagement for evaluations of
director compensation (employee satisfaction
evaluation)

 ompany-wide disclosure of Employee Attitudes
C
Survey results and employee engagement rating(employee satisfaction rating) by department/office(planned)Enhance understanding of SUBARU throughTeam Window*Ongoing communication of future strategy

Career interviews

Activities in cooperation with labor unions

Dialogue with the President

Visualization within the talent management system

SUBARU Vision Awareness ProgramSmile Up Project

Workplace environments, etc.
Health management

Responses to new work styles

Wages

Welfare and benefits*Team Window: An initiative for building a more robust organization by conveying information and facilitating discussion among members representing all departments

Employee Attitudes Survey
Foreign national employees
The SUBARU Group hires human resources best suited to the policies and business activities of each location, regardlessof their nationality. SUBARU employs 87 foreign nationals as of the end of March 2022. There are two foreign national
employees in managerial posts at manufacturing and engineering departments. We will continue to hire foreign nationals
based on their individual capabilities and qualities, and promote them to managerial positions without discrimination.

Mid-career hires
SUBARU has been actively promoting mid-career recruitment in recent years to respond to changes in the businessenvironment and achieve sustainable growth. There were 4,059 mid-career hires working as regular employees as of theend of March 2022, and 164 of them were in management positions. A total of 996 people were hired as mid-career
recruits during the five-year period starting in 2017. In addition to active recruitment, we conduct regular surveys after the
1st, 3rd, 6th, and 12th month of employment, and provide follow-up support to mid-career hires after they join the
Company. Follow-up support includes support and on-demand education provided by the HR department with cooperationfrom the workplace.
In addition, we established SUBARU Lab, an AI development base in Shibuya,Tokyo, where a cluster of IT companies
are located, in December 2020 as part of an initiative to enable smooth and targeted hiring of human resources required
for AI development. As of May 2022, nine people had been recruited as mid-career hires. We will continue to hire newgraduates and mid-career human resources based on individual capabilities and qualities, and promote them tomanagerial positions without discrimination.

This survey has been conducted every year since FYE March 2018 with the purpose of creating a company where
employees are happy and everyone can work in a vibrant and energetic atmosphere. It uses data to objectively
understand changes in employee attitudes and changes in the workplace environment, while also gathering opinionsfrom our employees.
After the improper conduct related to the final vehicle inspection issues in 2017, scores for items such as “Fulfillment
from work” and “Pride in the company” dropped sharply. This is why we use the Employee Attitudes Survey to verify theeffectiveness of our initiatives to change the corporate culture, enhance quality, and create workplace environments thatare open to new ideas. The survey results are reported to senior executive management, and are also utilized to identify
problems and formulate countermeasures at each of our workplaces.
In FYE March 2022, 16,536 people, 94.7% of all regular employees, responded to the survey. The scores showed an
overall upward trend compared to FYE March 2021, and the score related to “Opportunities for improving abilities” rose
dramatically as an effect of introducing the new personnel system and educational programs.
Results of the Employee Attitudes Survey
Percentage of employees who responded positively (%)

53

56

59 61

57 59

70

64 66

73 74

FYE March 2019

64
56
47 49

51

50

56 58

59

62 63

67 66

FYE March 2021
FYE March 2022

Please visit the Subaru website for details on human resources and diversity.
https://www.subaru.co.jp/en/csr/social/resources/diversity.html

34 Integrated Report 2022

Communication,
Open culture

Work-life
balance

Opportunities
for improving
abilitiesFYE March 2020

Identifying withthe corporate
philosophy

Fulfillment
from work

Pride inthe company

Note 1: ”
 Communication, Open culture” is thesame item as “Communications in theworkplace are lively and the workplacefeels open” under “Organizational
Culture Reforms” on page 26 of the
Employee Attitudes Survey results for
FYE March 2022.
Note 2: T he results represent selected questions
from the Employee Attitudes Survey

Integrated Report 2022 35

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Main initiatives for health management

Promoting Health Management

Health policies
and targets

Elements

To achieve its vision of a company that delivers happiness to all, SUBARU is promoting health management initiatives alongwith occupational health and safety activities so that all employees can maintain their health, well-being, and enthusiasm as
they work, while also taking on challenges and achieving growth. SUBARU is implementing these actions based on the belief
that the health of employees and their families is the foundation of all our business operations. SUBARU is also working on
activities to provide a more comfortable working environment, such as supporting the physical and mental health of its
employees as well as building a healthy organization and promoting flexible working styles.

Physicalhealth

SUBARU Health Declaration
PurposeIn pursuit of becoming a company “Delivering happiness to all” and based on our Global Sustainability Policy of “striving tomaintain and advance the workplace environment so that employees can work safely in peace, and with a sense ofsatisfaction,” SUBARU CORPORATION, the Subaru Labor Union, and the Subaru Health Insurance Association jointly released
the Health Declaration in October 2020 with the intent that the three parties work in unison toward health.

Health DeclarationB oosting rate of follow-up medical examinations
and follow ups on medical examinations byproviding medical records

Follow-up
examination rate:
100%Implementing measures to reduce BMI (obesity
index) (raising awareness through various seminars
and the use of body composition scans)

Boosting thecancer screening
rate
Specific healthguidance rate:
20%

Rate of employees
receiving stresschecks:95% or more
Mental healthsurveyTomomi Nakamura
Minoru Yamagish
President, Subaru Health Insurance Association Tatsuro Kobayashi

Representative Director, President and CEO, SUBARU CORPORATION

Established October 2020M easuring physical strength, and implementing
exercise programs and taking measures to prevent
musculoskeletal disordersA dding female-specific cancers to regular healthcheck items, and providing support for the top
five cancersP romoting quit smoking seminars and subsidies
for online smoking cessation clinics to achieve nosmoking on premises by FYE March 2026

Reducing
absenteeismO ffering well-balanced nutritional lunch meals low
in calories and salt in all company cafeterias

Visualization of theemployee’s mental
state
Early detection,
preventive action

Reducing
presenteeismU tilizing stress checks (Workplace Improvement
Promotion Section), mental health surveys*(identifying personal characteristics anddiagnosing employee mental health status) for
management purposes*Currently being gradually introduced to backoffice departments throughout the company
S trengthening cooperation between supervisors,
the employee experiencing health issues, andindustrial health staff through various training
and health activities

Responses to newwork styles

Optimization ofworking hours
Productivity
enhancement
Work-life balance/
securing time awayfrom workI mplementation of hybrid work styles (working
in conjunction with office reforms and creating
opportunities for employees to gather andcommunicate)Re-emphasizing labor management

A corporate
culture thatencourages newchallenges andnew ideas

Ensuring
psychological safety
Strengthening
communicationC reating comfortable workplaces through activities
that praise, recognize, and show appreciation
to employeesA ctivities to revitalize informal communicationH arassment prevention activities

Organizational
healthHealth management goalsE xpanding online specific health guidance

Reducing thepercentage ofsmokers to 28%

Consultations withindustrial healthstaff and training
promotion

Executive Chairman, Subaru Labor Union

Priority prevention
for those at high risk
Physical training toenable work on thefactory floor untilage 65

Outcome index

Key initiatives for FYE March 2023

Regular healthcheckup rate:
100%

Strengthening ofhealth guidance

MentalhealthTo build happiness for our employees and their families,
we need a foundation of mental and physical health.
SUBARU works with its employees to promote health and preventive
care, taking on the challenge of building workplaces full of smiles
and enabling growth.

Health issues

Boosting
engagement

Improving mental
safety in theworkplace

Attracts people
throughenthusiasm, andbecomes thedriving power of ahealthy company(work fulfillment)

Boosts work-lifebalance, andallows employees
to concentrate on
work (comfortableworkingenvironment)

Fosters a healthy
culture orporate cultureC
open to new ideas

Overview of SUBARU health management
SUBARU considers health improvement activities to be a management issue, and has reported on progress, issues, andmeasures related to health management at Board meetings since FYE March 2021. Throughout the year, we communicate
this information to all employees using internal newsletters, and notices on measures to promote health. SUBARU, labor
unions, and the health insurance labor union cooperate in perpetuating a plan-do-check-act (PDCA) cycle with
employees by visualizing issues related to the three elements of health management: physical health, mental health, andorganizational health.
Maintaining health boosts productivity, which leads to benefits such as employees’ ability to continue working actively inthe workplace, and the ability to secure talented human resources in the future. It also boosts employee engagement on
both counts of work fulfillment and achieving a comfortable workplace, thereby fostering a healthy work culture.
Promotion Focus

Health management

Health management

Physical health

Legal and regulatory compliance
Safety considerations

Three elements
Strategic
implementation

Mental healthOrganizational
healthBenefits
Elimination of productivity drops causedby health issues
Employees can work happily to the ageof 65 directly on the factory floor
Better ability to secure talented
human resources

Initiatives to prevent harassment
SUBARU is strengthening initiatives to prevent harassment and to promote workplace culture reforms as the foundation of
a company that is open to new ideas. We conduct intensive awareness-raising activities to boost momentum for creatingharassment-free workplaces, in conjunction with the No Workplace Harassment Month held every December by the
Ministry of Health, Labour and Welfare. Specifically, we hold study sessions as part of our workplace management where
opinions are exchanged and action statements are made about measures to prevent and mitigate power harassment.
PurposeAwareness-raising
activities

Prevention andmitigationFYE March 2023 plan

Building awarenessInitiatives for the company-wide No Workplace Harassment Month (December)

Sharing know-how

Study groups for each department and personal declarations

Creating an environment where employees
can identify issues and make corrections on
a mutual basis

Anger management training

Prevention by utilizing peer input
Restoring order within the business

Organizational declarations and employee behavior surveys

Individual responses through the harassment consultation desk andcompliance hotline

Promoted in conjunction with work style reforms

36 Integrated Report 2022

Integrated Report 2022 37

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Handing Down and Enhancing the SUBARU Difference —Working with the Engineers of Tomorrow

SUBARU Driving Academy: Training engineers who can drive, feel, consider, and quantify

Super Taikyu: Racing with Carbon-Neutral Fuels

SUBARU does not employ dedicated test drivers because our engineers assess all of our cars in the development stage.
Our engineers want to deliver products that make our customers satisfied, so they drive our cars while assessing sensory
qualities that are difficult to express numerically, such as Enjoyment and Peace of Mind. They then reflect theirobservations in the design drawings after studying their observations theoretically.
SUBARU’s strength comes from having the same engineer handle the entire process of driving, feeling, considering,and quantifying instead of dividing it among multiple staff. This is the purpose of the SUBARU Driving Academy (SDA).
It exists to further refine these skills to allow the creation of even better cars.

SUBARU started participating in an endurance race, Super Taikyu*1 (S-Taikyu, Super Endurance ) with a production vehicle
modified for racing. The Team SDA Engineering BRZ CNF Concept aims to achieve carbon-neutral driving and expand
carbon-neutral options. The project is intended to assist in developing the next generation of engineers. SUBARU races
with the SUBARU BRZ using carbon-neutral fuels*2 (CN fuels).

SUBARU development: Our engineers’ dedication
to one project is our strength
Drive

Feel

ConsiderQuantify

Driving skill

Assessment
skill

Logicalthinking

Measuringskill

Often, clear sensory differences felt by the driver do not show up
in figures acquired using conventional measurement methods. At
the SDA, we do not limit ourselves to conventional measurement
methods. Instead, we focus on probing deeper into the mechanism
behind the issue and what we can measure to identify the cause.
Drivers train to sharpen their senses so they can feel differences
when driving. They then probe deeper into the mechanisms behindthe differences they feel. This increases the number of elementsthat can be quantified numerically, and these elements are thenincorporated into development.
By perpetuating this cycle, we can quantify elements that cause
people to feel Enjoyment and Peace of Mind numerically. This expands the development of those elements beyond therealm of hardware and into the realm of control software development. The final result is a car that allows customers to feelthe SUBARU difference, regardless of the model or type of power unit.
The SDA focuses on training engineers with these qualities in order to continue implementing SUBARU’s uniqueapproach to car-making. The SDA is comprised of members from various departments involved in development. Drivers
at the SDA hone their assessment and management skills as they acquire the highest level of driving skills possible. They
also work to establish car manufacturing thattranscends organizational barriers.
SUBARU provides value to its customers in
the form of Enjoyment and Peace of Mind. We
believe we can achieve sustainable growth andfurther enhance our corporate value by building
even stronger relationships with customers who
feel an affinity with our pursuit of SUBARU’sunique approach to car-making.

For more information on the SUBARU Driving Academy, please see the 91st Shareholders Report.

https://www.subaru.co.jp/ir/library/pdf/br/br_c91.pdf (Japanese version only)

38 Integrated Report 2022

SUBARU races in the ST-Q class, a special class open to
automakers whose purpose is to develop technologies
and vehicles that can provide feedback for production
vehicles. As electrification advances, SUBARU is not
limiting itself to a single option to contribute to theachievement of a zero-carbon society. We believe that our
Company needs to manufacture cars that address changes
in society and the environment, as well as the needs of ourcustomers. The use of CN fuels increases the probabilityof being able to maintain the use of SUBARU’s proprietaryhorizontally-opposed engine.
The development of racing vehicles focuses on training
engineers who can oversee development of the entire vehicle,
as well as the development of future technologies. The SDA
draws members from various departments within theEngineering Headquarters. Many participants are younger
employees in their third or fourth year at SUBARU. The
development of racing vehicles proceeds at an incredibly fastpace, much faster than the development of regular mass
produced vehicles. We hope that allowing our engineers toexperience the speed of the verification process for racing
vehicles will further enhance our human resource development.
SUBARU’s automotive development is competing with both Japanese manufacturers and overseas manufacturers.
Training engineers is essential to outperform the competition. It is also important for engineers to experience thedisappointment of losing a race and understand how difficult it is to win. This helps to instill the fighting spirit they need toovercome challenges.

Toyota Motor Corporation (hereinafter, “Toyota”) also
races in the ST-Q class with the GR86, which was jointly
developed with the BRZ. Racing includes elements of bothcollaboration and competition. We worked together with
Toyota to develop body reinforcements for racing vehicles
and a new fuel tank, and the GR86 has the same basic
specifications as the BRZ. SUBARU equips its racing vehicles
with EyeSight to aim for “zero fatal road accidents by2030”. EyeSight image data collected under harsh racing
conditions will allow us to further enhance the recognition
performance of EyeSight for production vehicles. On race
day, both companies put everything they can into the raceas they compete to claim victory. SUBARU uses motorsports
to make even better cars, to attract new fans, and to develop human resources.
*1 An endurance race where race cars are built to specific regulations and divided into classes for competition. Vehicles include production vehicles modified for racing.
*2 The fuel that SUBARU will use for this race is manufactured by synthesizing carbon dioxide and hydrogen with other components partially derived from non-ediblebiomass to comply with JIS standards for gasoline.

Integrated Report 2022 39

Value Creation Story

Mechanisms Supporting Value Creation

Commentary on Strategy

Corporate Data

SUBARU’s Idea for a Digital Transformation Strategy

SUBARU’s unique digital transformation (DX)strategy has a firm foundation to respond toenvironmental changes.

Takuji Dai
Executive Vice President
Chief Information Officer
Chief General Manager of
IT Strategy Division,
Senior General Manager ofCorporate Planning Division

The automotive industry is undergoing a once-in-a-century upheaval that
adds further complexity to car-making. Until now, automakers were tasked
with the product planning, development, and manufacture of cars which werethen distributed to dealerships. More recently, however, it has become
possible to secure touchpoints with customers through the use of data anddigital technologies.
It is generally said that consumer needs are shifting from goods toexperiences. SUBARU provides products that have functional value backed bysound car-making and considers it important to strengthen relationships withcustomers through their experiences driving our cars. SUBARU’s DX strategy
utilizes data and digital technology to strengthen Mono-zukuri (car-making)while simultaneously facilitating the creation of experiences.

Our Common Goal is Strengthening Ties between SUBARU and our Customers
For a smaller car manufacturer like SUBARU to respond to the current upheaval in the automotive industry, we need to
select and establish focuses in regard to the use of data and digital technology. As a result of these major changes, thevertical division of units by function (such as development, procurement, manufacturing, sales, and after-sales service)that worked well for car-making in the past is becoming obsolete. In response, we are changing the way business isconducted across the entire Company by establishing data systems and enabling everyone to share that data to facilitatechanges to organizational culture in the future.

SUBARU has many customers around the world wishing to enrich their lives by leading a lifestyle that includes a car. In
response to these customers, we are working to establish data and digital-based “experience-making” for our customers
as our new challenge. We are also working to enhance the value SUBARU provides to customers in the form of Enjoyment
and Peace of Mind by strengthening our Mono-zukuri as described previously. Our common goal is to increase thenumber of customers who feel an affinity with our value statement, and deepen our relationships with these customers. In
other words, the ultimate goal of all our initiatives is to deliver happiness to our customers.

Strengthening Mono-zukuri Using Data and Digital Technology
We have identified three major issues related to the development and production of cars.
The first is “process”. Until now, we repeated a cycle where we designed parts, made prototypes, assembled thoseparts into a prototype for a single vehicle, and then evaluated it. However, this cycle is no longer sufficient to keep up
with current development processes as they become more advanced and complex. We aim to streamline this process byusing a digital twin that combines partial model-based development using data and digital technology in conjunction
with real-world development.
The second is “operations”. The number of variations in models and power units, such as hybrids and BEVs*1, isincreasing. This, in turn, has increased the number of items that need to be managed by each department involved in
Mono-zukuri. It is easy for these departments to focus on management as their goal, even though the original purpose ofmanagement was to make improvements. We need to promote a renewed focus on improvement activities that need to
be done. To do so, it is important to establish data handling tools and skills to process a large number of control items
and expand their use on-site.
For example, some manufacturing sites are implementing initiatives to use BI*2 tools. Until now, manufacturing
processes included the creation of paper records on-site. These records were then entered into a computer manually.
We have changed this system to enable direct input into a tablet. Vehicle numbers, images, and records are input
into a tablet on-site, and that data is managed in an integrated way. This has increased the speed at which supervisors
can monitor and respond to trends, and the information linked to a single car can now be shared by the manufacturingsite with various departments, such as production engineering, quality control, and development, in a timely manner.
*1 BEV: Battery electric vehicle*2 B usiness Intelligence (BI): Software that can assist with management and work tasks by analyzing and visualizing a range of data maintained by the company

Setting common goals and implementing parallel initiatives
Painting

Changes to products,
services, andbusiness models

Checking andreworkingCollection andanalysis

Reworking records

Results and actions

Reconfirmation of dataInnovation

Attempts to create new value

OK!

Defect confirmation

Creation of new values(Experience-making)

Painting

Checking andreworking

Data entry omissions

Recorded on paper

Input into computer

The following day or later

Reworking records

Collection andanalysis

Results and actions

BI tools

Strengthening ties between the SUBARU brandand customers by utilizing data and digital technology
Defect confirmation

Changes in our business,organization, processes,
and corporate andorganizational culture
Strengthening Mono-zukuri

40 Integrated Report 2022

Reforms

From improvements tobusiness process reform

Improvements

Improvement as
the core element

Foundation

Development of infrastructureand human resources capableof utilizing data

An employee inputting
data into a tablet

OK!

Tablet input

Eliminates the need to collect and analyze data, andallows status information to be shared in a timely manner

The third is “organization”. The conventional structure for car manufacturing uses an organization with vertical,
function-based divisions, such as for development, procurement, manufacturing, sales, and after-sales service, with
development being handled as projects involving all divisions. Dividing the organization by function is very effective interms of allowing own-process completion for individual processes. However, it is no longer suitable for new trends
involving concurrent activities with external organizations and new business models such as connected services. In
addition, each department and operation exists as an individual silo, making it difficult to share data across departments.

Integrated Report 2022 41

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

SUBARU’s Idea for a Digital Transformation Strategy

We believe that building a conventional integrated system under current conditions would not only require tremendous
resources, it would also mean that we end up facing the same issues again when new business models appear. Rather
than integrate the system, we opted to integrate data by building a company-wide data integration platform that sharesdata across departments and further advances Mono-zukuri.
One such initiative is Global Product Lifecycle Management (PLM). This system manages all information about each car,from development and production to after-sales maintenance. This makes it possible to understand the health conditionof the car and allows us to promptly notify existing owners in the unlikely event of a problem with a model in the sameseries during the production stage. By facilitating access to data tracking the lifetime of each vehicle, we are working toprovide more convenience and create new experience value for the customer.

Creation of New Value by Enhancing Experience-Making
Nowadays, customers connect to the outside world through their smartphones, and their cars are equally as connected.
We hope that by creating these connections, people will enjoy new experiences that come from the enjoyment of driving,made possible by the enduring safety that SUBARU provides as a functional value. We want to create a cycle where these
new experiences make customers appreciate their SUBARU, and also make them want to buy a SUBARU as their next car
as well. We are striving to create new value through facilitating experiences that strengthen our ties with the customer
through the use of data and digital technology.
After-sales

Creating new customer experiences
Enhancing after-sales service
AUTONOMOUS

Development

Purchasing

Manufacturing

Supplies

Sales

Customer
service

Qualityassurance

Product
planning

Development

Manufacturing

Sales
SHARED &SERVICECONNECT
BEFORE

While this type of organizational structure and process management is effective for Mono-zukuri,
it is becoming more difficult to confirm and analyze system data across the organization.

Next cycle
Connections
Affinity
New customer experiences

Ride-sharing
Car-sharing

Benefits

Data

Data

AFTER

Benefits

Company-wide horizontal data linking to facilitate process reform (Data integration platform)
Traceability
information

Manufacturing

MaintenanceParts/Supplies

Driving

Telematics

SoftwareRecalls andservicecampaigns

Integration
into newproducts

Data

Data

High-accuracy maps
Enhancinginfrastructure

ELECTRIC

EVs
Safety and peaceof mindBenefits

Understanding the qualities of SUBARU

Creating a platform for vehicle lifecycle data

Fostering DX Human Resources that Focus on Transforming Work On-Site
Human resources are essential to implement these initiatives. Currently, SUBARU is proactively hiring mid-career
personnel, but as a basic principle, we need to develop human resources internally as a company engaged in Mono-zukuri.
In the future, it will be essential to have a specialized IT department in addition to developing human resources on site ateach department to implement company-wide reforms to our business and corporate culture. There are six types of DX
human resources defined by the IPA*3. In regards to developing human resources in-house, we will focus on data
scientists and AI engineers to change our car-making. These personnel are talented resources who have an in-depth
knowledge of digital technology and data analysis, and are capable of changing the way business is carried out on site.
The manufacturing department at the Gunma Plant is an excellent example of our efforts to develop human resources.
The IT and manufacturing departments are working in partnership to create a system to raise awareness and skill levels
on the manufacturing floor. They have taken a standard training program on data science and adapted it to suit the
SUBARU ideals. This course is used to train experts who can use data as a tool for improving work on the manufacturing
floor. To ensure the establishment of individual skill development as part of our corporate culture, we are conducting acontinuing chain of grassroots activities in which the first generation of students mentors the second generation, and thesecond generation then mentors the third generation.
*3 Information-technology Promotion Agency (IPA), Japan

42 Integrated Report 2022

Our connected service has already started in the U.S. and has been well received by customers who can use theirsmartphones to start their engine remotely and operate the air conditioner. There are also vehicle-linked services such as
a locator that shows where the driver has parked their car in large parking lots at shopping malls, etc. In addition to this,related features for reserving a visit to the dealership and displaying vehicle information are already being used by manycustomers. Connected services in Japan started with the Levorg, which went on sale in 2020, and we are currently thinking
about enhancing functionality and expanding the market in the future.
We also started the SUBARU Digital Innovation Lab to make use of digital technology and data in areas such as digitalmarketing, sales and more. Studies and analysis conducted at this lab revealed these characteristics about SUBARU’scustomers: they consider their car to be more than just a means of transportation; they demand value that goes beyond
mobility; and they seek an emotional element that cannot be expressed in terms of efficiency.
Our customers tell us that they sometimes intentionally take a longer route to theirdestination, or that they do not always follow the route given by their navigation system. We
see this feedback as an example of our customers experiencing the features of SUBARU
vehicles that appeal to their senses, and this leads to feelings of excitement and affinity. We
created the SUBAROAD driving app to offer this kind of experience to as many customers as
possible. The concept of the app is to present the route that provides the most driving
pleasure in their SUBARU vehicle, rather than the most efficient route, and it is already being
used by many of our customers.
We are using data and digital technology to enhance SUBARU’s approach to car making,and we are also creating new experiences, using a range of customer contact points, to allow
our customers to have enjoyable experiences in their SUBARU vehicle. We consider both ofthese initiatives to be the same goal, which is to strengthen the ties between the SUBARU
brand and our customers.
We hope that all of our customers will be looking forward to SUBARU’s unique DX
initiatives in the near future.

Integrated Report 2022 43

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Message from the CFO

To achieve success in the electrificationera, we will strive to enhance ourcorporate value by maintaining a soundfinancial base and making steady
preparations for
growth investments.
Katsuyuki Mizuma
Director of the Board, Executive Vice President,
CFO (Chief Financial Officer) and
CRMO (Chief Risk Management Officer)

Profile1984 Joined The Industrial Bank of Japan Ltd
2014 Became Managing Executive Officer of Mizuho Bank, Ltd.
2016 Joined SUBARU as Senior Vice President andSenior General Manager of Subaru Overseas Sales & Marketing Division 22018 Executive Vice President, Chief General Manager ofOverseas Sales & Marketing Division 1, Chief General Manager ofOverseas Sales & Marketing Division 2
Executive Vice President, CFO and CRMO since June 2021

Review of FYE March 2022 and Outlook for FYE March 2023
It has been one year since I was appointed as Chief Financial Officer (CFO) in April 2021. FYE March 2022 was anextremely challenging year. In addition to tight supply and demand of semiconductors throughout the year, impact fromparts supply chain stagnation due to the resurgence of COVID-19 in Southeast Asia and other regions resulted in a seriesof automotive production volume adjustments, temporary production suspensions, and other actions. We were unable
to achieve a sufficient level of production, causing a great deal of inconvenience to our customers and dealerships. With
the cooperation of our suppliers and dealerships, we adjusted our production and sales plans in accordance with theever-changing situation in order to minimize any impact. However, our final production volume for the fiscal year was
727 thousand units, down 83 thousand units from FYE March 2021, and vehicle sales were 734 thousand units, down
126 thousand units year on year. As a result, we posted consolidated financial results for FYE March 2022 as follows.
Revenue was 2,744.5 billion yen, down 3.0% year on year. Profits were also down year-on-year despite the curbing ofsales incentives, reduction of warranty expenses, and positive impact from exchange rate fluctuations. Operating profit
was 90.5 billion yen, down 11.7%. Profit before tax was 107.0 billion yen, down 6.1%. Profit for the period attributableto owners of parent was 70.0 billion yen, down 8.5%. This was a year that keenly reminded us of the importance of
maintaining a solid and sound financial base.
Meanwhile, demand has been extremely high for SUBARU vehicles, with back orders*1 exceeding 100 thousand
units globally, mainly in the United States. In FYE March 2023, we intend to produce and sell as many units as possible
through unified Group-wide efforts and innovations to meet these customers’ expectations. Specifically, we will take on
the challenge of producing one million units and selling 940 thousand units, aiming for revenue of 3,500 billion yen andoperating profit of 200 billion yen.

400

IFRS

Capital Policy

10

100

5.8

6.3

181.7

210.3

3.6
102.5

0

’18/3
Operating Profit (Left)

To Our Stakeholders
In the era of electrification, where we will have no map to navigate by, we see flexibility and mobility as important in orderto achieve success. In order to realize this, it is essential to boost employee motivation. Therefore, we have launchedinitiatives under the slogan of each individual acting on their own, and will actively invest in human capital with a focus on
the growth of the individual. There is great competition ahead here for us. We will pursue the SUBARU difference morethan ever through growth investment, while at the same time striving to achieve return on capital, financial soundness,and shareholder returns. We look forward to your continued support.

’19/3

’20/3

Operating Margin (Right)

’21/3

3.3
90.5
’22/3

5

0

Dividend Per Share (Yen) / Dividend Payout Ratio (%)
JGAAP

IFRS

150

JGAAP

144

IFRS

100

144

20
15

11.7

379.4

*2 BEV: Battery electric vehicle

15

300
200

As SUBARU does not possess a large scale among automakers, we aim to improve our corporate value over the medium
to long term by developing a highly profitable business model and achieving a sound financial position and high capitalefficiency by promoting selection and concentration, in which we allocate limited management resources to markets andcategories where we can demonstrate our strengths.
In our financial and capital strategy to achieve this, we have identified return on capital, financial soundness, andshareholder returns as three key indicators. Our basic policy is to provide appropriate shareholder returns while maintaining
a balance between return on equity (ROE) and the shareholders’ equity ratio over the medium to long term. Specifically,
we will aim for an industry-leading operating margin of 8%, and ROE of 10% or more as KPIs, and will demonstrate highfinancial soundness by maintaining a shareholders’ equity ratio of 50% as the foundation to support these.
In order to achieve success in the coming era of full-scale electrification, we believe it is of the utmost importance tomonitor changes in the market and regulations and the growing convenience of BEVs*2, including social infrastructure,
and above all, to respond to changes in the needs, preferences, and values of customers. Our financial and capital
strategy will follow this principle.
In May 2022, we announced the first phase of our investment strategy toward electrification, a restructuring of ourdomestic production system. Though the specific investment plan is currently under consideration, we plan to invest 250
billion yen over the next five years, beginning in earnest from FYE March 2024. Even after this point, we will continue
discussions to develop business strategies with a view to full-scale electrification. Although our investment and cash flow
amounts may fluctuate from year to year, our basic policy for shareholder return remains unchanged. Specifically, this is
to pay performance-linked dividends in a stable and consistent manner (30-50% consolidated payout ratio) and to flexibly
purchase treasury stock in accordance with cash flow. In order to strike a balance between aggressive investment for
future growth and shareholder returns, we have revised our traditional financial policy, which had been to retain net cash
worth two months of revenue. In addition, we will create a structure that can generate solid profits even with BEVs in bothproduction and sales, and reattain the industry’s highest operating margin, thereby increasing shareholder value.

25

Operating Profit (Billions of yen) / Operating Margin (%)
JGAAP

Financial and Capital Strategy for Sustainable Growth in the Electrification Era

ROE (%)*1 Orders received but awaiting stock. This indicates demand for a product exceeding its supply.

500

These results for FYE March 2022 are not the sort we take great pride in, and we are determined to achieve successin the future via a two-pronged approach, restoring previous levels of profitability with sustainable growth for the entire
Group, especially in the U.S. market, and leveraging our strong brand.
Currently there are inflationary pressures caused by the worldwide rise in raw material prices. In order to counteract
concerns about the impact on revenues, we are implementing price policy reviews and model mix improvements whileclosely watching market and customer trends. In addition, our quality enhancement efforts, part of our mid-term
management vision “STEP,” are beginning to show results. This includes a decrease in the number of defects and recalls
globally and a downward trend in warranty expenses. Looking ahead, we will continue to march forward with these efforts.

ROE

Targeting 10% or more

10

Equity ratio

50% at minimum

5

Shareholder Dividend payout ratio
returns
Share repurchases

30-50%

0

Conduct flexibly

100

14.6
8.5

9.0

50

4.4

3.8

’21/3

’22/3

78.1

100
50.3

50.1

61.3

50

56.1
56

56

’21/3

’22/3

’19/3

’20/3

25
0

0

’18/3

75

’18/3
Dividend Per Share (Left)

’19/3

’20/3

Dividend Payout Ratio (Right)

Financial Information
Please visit the SUBARU website for details about our financial information.

https://www.subaru.co.jp/en/ir/library/

44 Integrated Report 2022

Integrated Report 2022 45

Value Creation Story

Mechanisms Supporting Value Creation

Commentary on Strategy

Corporate Data

Risk Management

Our Approach

Risks Associated with Business Activities

SUBARU is undertaking risk management as one of its key priority management issues, not only to address emergency
situations when they arise but also to deal with various risks that have a serious impact on daily corporate activities, aswell as to minimize damage when risks emerge.
The automotive industry is ushering in a major transformation, which only occurs once in a century. The SUBARUGroup, which operates businesses globally, is aiming to enhance the resilience of its management infrastructure by
ensuring the sustainability of its businesses by quickly tackling changes in world affairs. At the same time, the Group
must boost its measures to minimize its human, social and economic losses. Amid this environment, it is essential tostrategically conduct risk management throughout the group to conduct business activities. We therefore believe it isimportant to create a SUBARU Group that has an infrastructure that is resilient to risk to enhance our corporate value.

At the SUBARU Group, we extract and identify key risks associated with our business activities and consider measures tocombat them. The major business risks are listed below. Please note that this is not an exhaustive list of all risks relating
to the SUBARU Group.

17 Risks Affecting Business Activities
Risks relating to fluctuationsin the economic and financial environment
Economic trends in major markets

Financial markets fluctuations

Political, regulatory and legal proceduresin various countries that impact business activities

Exchange rate fluctuations

Change in raw material costs

Impact of disasters, war, terrorism, infections, etc.

Management System

Risks relating to industry and business activities

To prevent the emergence and expansion of risks to the SUBARU Group, the CRMO (Chief Risk Management Officer) appointed
by the Board of Directors leads risk management and compliance activities, reporting their status to the Board of Directors.
As a system to promote risk management, SUBARU has appointed risk management officers (job grade of Chief
General Managers) for each department and established the Risk Management & Compliance Committee. This
committee is chaired by the CRMO, and its vice-chairperson is the Vice President in charge of the duties of the Risk
Management Group, comprised of the Risk Management & Compliance Office and the Legal Department. At thiscommittee, members deliberate, discuss, make decisions, and exchange/ communicate information on importantmatters.
The CRMO leads corporate Group-wide efforts to enhance risk management with professional support from experts incorporate departments, such as the Risk Management & Compliance Office and the Legal Department. In this leadershiprole, the CRMO works closely with the Corporate Planning Department, which performs division-encompassing functions,as well as different divisions and companies. The Audit Department audits execution of tasks by each division andsubsidiary in a planned manner.
Risk Management System

Formation
Normalsituation

President and CEO

Emergency
situation

Offices/plants supervision
Companies supervision
Financing related

Special Emergency Response Headquarters:

Risk Management& Compliance Committee

CRMO• Formulatecompany-wide policies• Supervise risk
management situations• Address company-wideissues• Formulate action
Risk
guidelines
management• Understand and report
officers
the implementation
situation
Risk
Management • Operate committee
meetings&
Compliance • Support activities at
Officeindividual departments(secretariat)

Chief Risk Management Officer

for immediate responseto the most critical situations

Risk Management &Compliance Office

President and CEO, CRMO,
Risk Management & Compliance Office,risk management officer and other officers
in the relevant department(CRMO)

Information sharing/
reporting

Determine which
response headquarters
should be set up
according to the situation

Departmental risk
management officers
General managers, company presidents,
officers in charge of common departments,
etc.

Emergency Response Headquarters:

for responseto critical situations
CRMO, Risk Management &Compliance Office, related officers

Cooperation
Departmental Response Headquarters:

for independent response toincidents by the related department
Each department
Dealerships, affiliatedcompanies, customers

Risk management officer

Responsible persons in individual departments

Board of Directors

Risks arising from national regulations
and other events affecting business activities

IT system/Cybersecurity
Group companies related
Legal services
Cooperation between
offices/plants
Management decision support
Safety/health/personnel protection
Executives support
Stakeholder communication
Market related
Supply chain management
Technical conformity support
Quality assessment support
Decision as to whether or not
to suspend production lines

Normal situation

Emergency situation

Focus on specific businesses and markets

Intellectual property infringement

Respect for human rights

Changes in the demand andcompetitive environment in the market

Information network security

Secure and train human resources

Responsibility related to products, sales and services

Compliance

Climate change

Supply chain disruptions

Stakeholder communication

Impact on business performance or financial standing

Message from the CRMO
In order to achieve our vision of becoming a company“Delivering happiness to all,” we are working to permeate
ownership in conceptualizing risk management and compliance.
Over the past three years, SUBARU has advocated to think actively about the conceptualization of risk
management and compliance, and has steadily promoted initiatives in this area. Although we still havesome way to go, discussions at meetings of the Risk Management & Compliance Committee, which are
regularly held several times a year, have become more active and diverse with each passing year. As
our activities take root, I feel that mindsets are strengthening for the entire Group, including not only
managers but those at the staff level as well.
With regard to risk management, we are strengthening risk management activities and systems
based on our Group-wide Risk Map that prioritizes issues according to likelihood of occurrence
and magnitude of impact. Following the global outbreak of COVID-19 in 2020, 2021 was once again a year of never-before-seen
severity in the environment. In addition to the global shortage of semiconductors, this came in the form of supply chain disruptions
due to a resurgence in COVID-19 in Southeast Asia and elsewhere, natural disasters, the impact of the situation between Russia andUkraine, greater risks pertaining to cybersecurity, and more. Under these circumstances, we have been steadily acquiring practical risk
management capabilities in a posture of battle readiness. We are doing this not only on our own, but particularly in the procurement
department, as we are also strengthening cooperation with our suppliers. We will continue to strengthen our efforts by focusing on
events with high risk factors, based on a firm understanding of the current situation.
Our aim is to ensure that compliance is permeated throughout all of the Group’s approximately 36,900 employees, and weare promoting compliance activities in a creative way so that they can be carried out in the field, rather than simply through verbal
messaging. Specifically, we conduct video training to raise awareness of compliance, as well as awareness-raising activities including
ongoing study groups on important laws and regulations to operations at each department and Group company. We also recognizethat the Compliance Hotline is functioning effectively within the Group. Going forward, we will work toward the realization of our visionof being a company “Delivering happiness to all” through grassroots activities tied to our daily operations.

Katsuyuki Mizuma
CFO, CRMO

46 Integrated Report 2022

Integrated Report 2022 47

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Directors, Auditors, and Executive Officers (As of June 22, 2022)
Directors of the Board
Executive Officers(Number of years in office as a director/number of shares owned)

Tomomi Nakamura

Kazuo Hosoya

Katsuyuki Mizuma

Representative Director,
President and CEO

Director, Chairman

Director, Executive Vice President,
CFO and CRMO

3 years / 21,729 shares

4 years / 35,419 shares

ChairmanKazuo Hosoya*

Secretarial Office, Human Resources Department

President

Tomomi Nakamura*

CEO (Chief Executive Officer)
Aerospace Company, Quality

Executive Vice President

Katsuyuki Mizuma*

CFO (Chief Financial Officer), CRMO (Chief Risk Management Officer)
Finance & Accounting Department

Executive Vice President

Tetsuo Onuki*

Chief General Manager of Purchasing Division,
Product & Portfolio Planning Division

Executive Vice President

Atsushi Osaki*

Chief General Manager of Manufacturing Division

Executive Vice President

Fumiaki Hayata*

Chief General Manager of Overseas Sales & Marketing Division 1,
Chairman and CEO of SIA*1

Executive Vice President

Takuji Dai

CIO (Chief Information Officer), Chief General Manager of IT Strategy
Division, Senior General Manager of Corporate Planning Division

Senior Vice President

Shoichiro Tozuka

Company President of Aerospace Company

Senior Vice President

Tatsuro Kobayashi

General Manager of Human Resources Department

Senior Vice President

Jinya Shoji

Chief General Manager of Overseas Sales & Marketing Division 2

Senior Vice President

Osamu Eriguchi

CQO (Chief Quality Officer)
Chief General Manager of Quality Assurance Division,
General Manager of Quality Assurance Management OfficeSenior Vice President

Tomoaki Emori

Chief General Manager of Corporate Planning Division

Senior Vice President

Tetsuo Fujinuki

CTO (Chief Technology Officer)
Chief General Manager of Engineering Management Division andTechnical Research Center

Senior Vice President

Tamotsu Inui

Senior General Manager of Purchasing Division,
Cost Innovation Promotion Department

Senior Vice President

Kazuhiro Abe

Chief General Manager of Product & Portfolio Planning Division

Vice President

Yasushi Nagae

General Manager of Investor Relations Department and General Administration
Department, Corporate Communications Department andSustainability Promotion Department

Vice President

Tatsuya Okuno

Chief General Manager of Customer Service Division

Vice President

Hiroshi Wakai

Company Vice President of Aerospace Company,
Senior General Manager of Engineering & Development Center

Vice President

Hiroshi Watahiki

Senior General Manager of Engineering Division and Purchasing Division

Vice President

Tadashi Yoshida

Senior General Manager of Overseas Sales & Marketing Division 1,
Executive Vice President of SOA*2, SCI*3, NASI*4

Vice President

Ryota Fukumizu

President and COO of SIA*1

Vice President

Shinichi Murata

General Manager of Risk Management & Compliance Office
Risk Management Group, External Relations Department,
Intellectual Property Department

Vice President

Kazuki Uejima

Senior General Manager of Engineering Division andGeneral Manager of CTO’s OfficeVice President

Ikuo Watanabe

Senior General Manager of Manufacturing Division,
Chief General Manager of Gunma Plant

Vice President

Akihiro Kato

Chief General Manager of Japan Sales & Marketing Division

1 year / 12,215 shares

Tetsuo Onuki

Atsushi Osaki

Fumiaki Hayata

Director, Executive Vice President

Director, Executive Vice President

Director, Executive Vice President

4 years / 20,353 shares

1 year / 19,743 shares

1 year / 10,256 shares

Yasuyuki Abe

Natsunosuke Yago

Miwako Doi

Independent Outside Director

Independent Outside Director

Independent Outside Director

3 years / 4,800 shares

3 years / 4,200 shares

2 years / 400 shares

Corporate Auditors* Concurrently serve as a Director(Number of years in office as an auditor/number of shares owned)

Yoichi Kato

Hiromi Tsutsumi

Shigeru Nosaka

Kyoko Okada

Yuri Furusawa

Standing Corporate
AuditorStanding Corporate
AuditorIndependent Outside
Corporate Auditor

Independent Outside
Corporate Auditor

Independent Outside
Corporate Auditor

1 year / 11,129 shares

2 years / 19,056 shares

3 years / 1,600 shares

3 years / 1,400 shares

Newly appointed / 0 shares

Please visit the Subaru website for details on profiles.

https://www.subaru.co.jp/en/outline/profile.html

48 Integrated Report 2022

*1 Subaru of Indiana Automotive, Inc.
*2 Subaru of America, Inc.
*3 Subaru Canada, Inc.
*4 North American Subaru, Inc.

Integrated Report 2022 49

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Outside Directors Roundtable

Theme 1

Progress on the Direction of our Electrification Strategy

Hosoya: At this management discussions and social gathering events*1 for FYE March 2022, wehave discussed the theme of the direction of our electrification strategy. This was recognized as
an ongoing issue to be addressed in the previous year’s evaluation of the effectiveness of theBoard of Directors. Amid global trends toward decarbonization and automotive electrification, I
would like to hear from our outside directors, from their objective perspective, about how theevolution of the SUBARU difference has been perceived over the past year or two.

Abe: When I was appointed as an outside corporate auditor in 2016, SUBARU was generating highearnings, but from 2017 onwards, quality issues such as the improper conduct related to the final vehicle
inspection issues and large-scale recalls had eroded trust in the brand, and the stock price was falling. I
became an outside director in 2019 while closely observing this dramatic change and have always
worked to provide timely advice. Most recently, the spread of COVID-19 and the subsequent stagnationin the supply chain has created a very frustrating and difficult situation, with strong demand but
insufficient production.
On the other hand, I can say that steady progress is being made in the evolution of the SUBARU
difference. While other companies had begun to steer toward electrification strategies, SUBARU had until
now been unable to paint a clear picture in this direction. However, over the past year or so, measures
aimed at developing the market for electrification have steadily accelerated, and SUBARU became thefirst Japanese automaker to announce that it would build a dedicated BEV*2 plant in Japan. My firsthandexperience in talking with various people internally is that they are confident that SUBARU can maintain its
market competitiveness in the era of CASE*3, and I feel that the iatmosphere within the company.

Natsunosuke Yago

Miwako Doi

Kazuo Hosoya

Yasuyuki Abe

Outside Director

Outside Director

Director and Chairman

Outside Director

We will steadily improve the effectiveness ofcorporate governance and achieve thesustainable growth of the SUBARU Group.
The priority initiatives of the mid-term management vision “STEP,” as well as the SUBARU difference,
have been steadily evolving, and this is gradually showing results. In May 2022, we announced a plan toreorganize our domestic production system, taking the first step toward electrification. Three outside
directors with extensive knowledge and experience in corporate management, alongside director andchairman Kazuo Hosoya, discussed matters such as their understanding of issues in light of electrification

Yago: I agree. At the time of my appointment as an outside director in 2019, the atmosphere within thecompany was characterized by differences between how people thought about and perceived
electrification. Some thought the era of electrification wouldn’t really come. But, from around 2021, thestrategy and approach in this area became clear for SUBARU as a unit. The declaration that SUBARU willbuild a mixed production line for
BEVs at the Yajima Plant in 2025 isindicative of this clarity. I feel that a
number of key actions have beentaken all at once.
Automaker management willclearly shift toward electrification
going forward. This will depend onwhether or not they can procure
various parts, including
Natsunosuke Yago
semiconductors, at a stable andOutside Director
reasonable cost. It is necessary that
Appointed as outside director in June 2019
related departments share theirawareness of this issue, and that
SUBARU refines its information system infrastructure harnessing IoT and AI internally.
If we consider the future of SUBARU, I see the current difficult procurement environment as an
excellent opportunity to strengthen its organizational capabilities and DX.

and other milestone industry changes, substantive initiatives to strengthen corporate governance, andexpectations of the human resources who will be responsible for our future growth.

50 Integrated Report 2022

Integrated Report 2022 51

Value Creation Story

Corporate Data

Abe: We have without question seensound is very SUBARU. They truly love and respect their own products. When I was appointed in 2020, I
was concerned that this corporate culture would not be able to keep up with environmental regulations
aimed toward carbon neutrality and other trends. However, BEVs began to appear on the agenda at
management discussions and social gathering events, and in May 2022, SUBARU began to take orders for
its first global BEV, the SOLTERRA. Then, plans for the restructuring of its domestic plants quickly took
shape. Though I had guessed it would take quite a long time to address electrification, I was provenwrong—in a good way. The fact that SUBARU was able to instill the SUBARU difference in its BEV should
give confidence not only to its development teams, but to all employees of the SUBARU Group.
SUBARU’s response to CASE and its thought processes and approach with regard to BEVs have become
very clear, energizing younger employees in particular and giving the organization momentum for the
future growth of SUBARU.

improvements over the last three years
when it comes to areas like theselection of agenda items foraddressing at the Board of Directors
and management discussions andsocial gathering events, as well as thequality of information used in decisionYasuyuki Abe
Outside Director
making processes. First and foremost,as independent outside directors, weJun. 2016 Outside Corporate Auditor
Jun. 2019 Retired as Outside Corporate Auditor
represent stakeholders. This puts us in
Appointed as outside director in June 2019a position to make usefulrecommendations without beingbound by internal interests or the sensibilities of management. We must also serve as an importantelement of corporate governance by supervising and monitoring business execution. Despite thisposition, I believe that the key to success is how we can build trust relationships with internal directors
and employees. At SUBARU, there is an environment where we can talk freely with people in various
positions. Though there is sometimes harsh advice exchanged in these discussions, we continue toencourage them to do their best in order to advance the three priority items of the mid-term
management vision “STEP”—corporate culture reforms, quality enhancement, and evolution of the
SUBARU difference. Team members are also transferred between departments within each businessdivision. Even when moving to a new department and fresh workplace, previous experience is by nomeans wasted. In fact, many are more successful in their new positions. There is also a higher level ofdemand from the market, and I would like SUBARU to continue to cultivate human resources who canthink flexibly and not be bound by stereotypes.
From the improper conduct related to the final vehicle inspection issues in 2017 until now, I believethat the employees of the SUBARU Group have had a difficult time. I want everyone to let out all of theirpast thoughts and feelings now, because now is their chance. SUBARU is taking a very positive turn. I am
sure that you will see the results of your efforts in the organization’s performance, and I wish you the bestof luck.

*1 Meetings for exchange of opinions on the Company’s important management topics, conducted by directors and corporate auditors andwhich do not require a resolution*2 BEV: Battery electric vehicle*3 CASE: Connected, Autonomous, Shared, Electric

Expectations for Growth and Message to SUBARU Group Employees

Hosoya: I believe it is very important to enhance
effectiveness in strengthening the SUBARU Group’s
corporate governance. I would like to hear from theoutside directors about what they keep in mind andwhat their expectations are for the future growth of
the SUBARU Group.

Kazuo Hosoya
Director and Chairman
Jun. 2019 Representative Director and Deputy President
Apr. 2021 Representative Director and Chairman
Jun. 2021 Director and Chairman

52 Integrated Report 2022

Mechanisms Supporting Value Creation

Doi: Employees of the SUBARU Group often say they love the horizontally-opposed engine, and that the

Hosoya: Certainly, SUBARU’s concept and brand image were too well-established, and I think ouroutside directors were concerned about whether we could really enter the realm of vehicle electrification.
Until recently, there was a sense among employees that electrification would not be as easy as somethought and that the transition period would be long, as well as that SUBARU could compete just withengine vehicles for some time. Meanwhile, we were closely monitoring market trends, steadily conducting
research and product development studies for electrification, and looking for the right moment to makea decision as an overall strategy. It turns out that interest in electrification among U.S. dealerships andcustomers had been growing more rapidly than we had anticipated. That is why I believe that, with regard
to the restructuring plan for plants in Japan, all parties involved were able to come together and focus on
the issue. We will continue to meet the expectations of our stakeholders while contributing todecarbonization with our distinctive the SUBARU difference.

Theme 2

Commentary on Strategy

Yago: When I was initially appointed, I had the impression that SUBARU was a company that was difficult
to understand. Although it was difficult to understand the process by which important matters were
decided, I gradually deepened my own understanding of how to perceive SUBARU as a company andhow to be involved in its management. I finally understood it wasn’t that decision-making processes wereclosed off to me, but that this was a company where Board members do not mince words in discussion. In
other words, SUBARU was where policy directions and important conclusions are reached after careful
deliberation. Although this culture may be perceived by the rest of the world as not fast enough, it is anadvantage in a business environment where companies are forced to face a variety of business risks. In
addition, SUBARU is continuing its efforts to strengthen its organizational structure with regard tocompliance and risk management. In 2019, it adopted a system where the Chief Risk Management Officer(CRMO) leads risk management and compliance activities.
In May 2021, it reorganized its principles and philosophy system as a company, including the Vision
for 2025. I believe these are convincing to employees. By gaining the empathy of employees, I expectthat SUBARU’s vision and philosophy will be elevated to the level of corporate culture, leading to greater
corporate value.
President Nakamura and managers began holding dialogues in 2021 on the subject of employee

Integrated Report 2022 53

Value Creation Story

engagement, resulting in a rich exchange of opinions. Through these activities, my intent is to provide
appropriate advice to ensure the continuity of each policy by increasing employee empathy andmotivation. My hope is that all employees will be eager to learn new things without fear of failure.

Doi: I believe that corporate governance is a balance between the defensive—compliance founded inawareness of risk to management, as mentioned by Mr. Yago—and the offensive, which is innovation.
Innovation is essential for automaker management in this era of addressing decarbonization and CASE.
Here, I would like to make contributions by utilizing the knowledge I have cultivated in the field of
information and communications in order to further enhance the value SUBARU provides to its customers,
which is “Enjoyment and Peace of Mind.” Furthermore, on the defensive side, I would like to talk about
the problem of procuring parts, which was exacerbated by the COVID-19 pandemic. There is stagnationin the supply chain and SUBARU faces never-before-seen difficulty. However, communication between
the manufacturing and procurement departments has improved tremendously to cope with thischallenge. It is not easy to create cross-functional partnership within an organization, but the fact that
SUBARU has been able to use the disruptions and chaos in the supply chain as an opportunity to do thiskind of bridging is a real success. Now that these two sides are working closely together, laying the
groundwork for data-driven discussions, I expect that this will help speed up manufacturing innovationfrom now on.

Hosoya: Both President Nakamura and I place great importance on management discussions and social
gathering events and the evaluation of
the effectiveness of the Board of
Directors as matters of governance. The
free response section of the annual
evaluation of the effectiveness of theBoard of Directors elicits many
dispassionate and unfiltered opinionsfrom our outside directors, which arevery helpful and valuable to us. We
intend to continue receiving expert and
Miwako Doi
objective knowledge from our outside
Outside Director
directors, engaging in frank exchanges
Appointed as outside director in June 2020of opinion in order to steadily achieve
growth, one step at a time.

Commentary on Strategy

Corporate Data

Mechanisms Supporting Value Creation

Message from the Chairman of the Board of Directors
Since June 2021, I have served as the chair of the Board of Directors, the Executive Nomination Meetings, and the Executive
Compensation Meetings. I believe that the role of the chair is to enhance corporate governance by utilizing the specific and frankopinions, and the new perspectives, provided by outside directors in management.
While it is important to build structures, corporate governance is meaningless without effectiveness. In the annual evaluationof the effectiveness of the Board of Directors, we receive many specific and constructive opinions from our outside directors. In
FYE March 2022, we had a number of discussions at the Executive Compensation Meeting regarding the design of the executive
compensation system, which had been raised as an issue in the previous year’s evaluation. This fiscal year, we decided toincorporate the degree of employee engagement (Employee Satisfaction Rating) as a new non-financial evaluation in theexecutive compensation system, linked to the mid-term management vision. We have also been receiving a number of requests
via the open-endedopinions and questions section of the effectiveness evaluation as topics for the Board of Directors and the
management discussions and social gathering events, and we are taking these up as strategic themes that management should
address. Inevitably, there will be gaps in how much information internal and external directors have. Therefore, we try to ensurethat they have a common understanding of the topics to be discussed by providing detailed briefings in advance so that they can
engage in lively discussions. The topics of the most recent management discussions and social gathering events have ranged
from pressing issues to long-term directions, including procurement strategy, connected car strategy, electrification strategy, andaerospace business strategy. From time to time, we receive harsh opinions from the outside directors, but I believe that all of
their comments come from a place of wanting to find ways to make SUBARU a better company.
In this way, we are gradually enhancing our system for strengthening governance that can sustainably increase SUBARU’s
corporate value.
Going forward, we will continue to carefully assess the direction of governance reform in the world, treasure the values of the
SUBARU Group, and steadily improve the effectiveness of our corporate governance step-by-step with the knowledge of ouroutside directors, leading to sustainable growth.

Kazuo Hosoya
Director and Chairman

Activities for Strengthening Corporate Governance
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

1999 Adopted a corporate vice president system
2003 Reduced length of director terms from two years to one year
Increasingtransparencyof management

2007 Abolished executive officer retirement bonus system
Established Corporate Governance Guidelines
Abolished senior advisor system
Independent outside directors: 1

2

3
Ratio of outside directors:
one third or more

Strengtheningofoversight
functionsFemale director
Independent outside corporate auditors: 1

2

3
Female director

2004 Established Executive Nomination Meeting
Objective andtransparent
procedures

2004 Established Executive Compensation Meeting
Outside directors participating: 2

3
Ratio of outside directors:
one half or more

Initiatives toenhance corporate
value overthe medium tolong term

Introduced restricted stock compensation plan
(ROE, quantitative evaluation)

Reduction of cross-shareholdings
60 issues

Appropriate functionof the Board of Directors

54 Integrated Report 2022

Added
non-financial
evaluation(employeesatisfaction,
qualitativeevaluation)

32 issues

30 issues

18 issues

10 issues

4 issues

2 issues

Start of evaluation of the effectiveness of the Board of Directors

Integrated Report 2022 55

Value Creation Story

Commentary on Strategy

Corporate Data

Mechanisms Supporting Value Creation

Corporate Governance

Basic Policy

Board of Directors and Board of Corporate Auditors

SUBARU has articulated the vision “Delivering happiness to all” and works on the enhancement of corporate governance as
one of the top priorities of management, in order to gain the satisfaction and trust of all its stakeholders by achieving
sustainable growth and improving its corporate value in the medium and long term based on the Corporate Statement
outlined below.
<Vision>Delivering happiness to all<Value statement>“Enjoyment and Peace of Mind”<Corporate statement> We aim to be a compelling company with a strong market presence built upon our customer-first principle.
SUBARU clearly separates the function of decision making and the oversight of corporate management from that of theexecution of business operations, and aims to realize effective corporate management by expediting decision making. In
addition, SUBARU seeks to ensure proper decision making and the oversight of corporate management and the execution ofbusiness operations, as well as enhance its risk management system and compliance system through the monitoring of its
management and operations and advice provided by outside officers. We also implement proper and timely disclosure of
information in order to improve the transparency of management.

Organization

Board of Directors

Chairman

Chairman of Board of Directors

Board of Corporate Auditors
Standing Corporate Auditor

Composition

Directors: 6, Outside directors: 3

Standing Corporate Auditors: 2, Outside Corporate Auditors: 3*1

Role/
responsibility

The Board of Directors ensures fairness and transparency by
performing the oversight function for overall management andmakes the best decisions possible for the Company throughappointment, evaluation and resolution regarding thecompensation of its CEO and other management team members,
the assessment of material risks faced by the Company and thedevelopment of measures to deal with such risks, and decisions on
the execution of important business of the Company. The Board
takes these actions in the interest of effective corporate
governance, as well as sustainable growth and improvement ofcorporate value over the medium to long term.

The Board of Corporate Auditors, as an independent
organization entrusted by shareholders, is responsible for
ensuring the sound and sustainable growth of SUBARU andestablishing a high-quality corporate governance system thatcan be trusted by society by performing audits of the executionof duties by directors, passing resolutions on the contents ofproposal items regarding the appointment and dismissal, or
non-reappointment, of accounting auditors that are to besubmitted to the General Meeting of Shareholders, andperforming business audits, accounting audits and othermatters prescribed by laws and regulations.

Meetings held in
FYE March 2022

13 times*2

12 times*1 In FYE March 2022, there were four corporate auditors, including two outside corporate auditors.
*2 In addition to the number of times Board of Directors’ meetings were held as stated in the table above, there was one written resolution that was deemed equivalent
to a Board of Directors’ meeting in accordance with Article 370 of the Companies Act and the Articles of Incorporation of the Company.

Number of Board of Directors’ Meetings Held and Attendance Rate

For other corporate governance information, please visit:https://www.subaru.co.jp/en/csr/governance/corporate/

Category

2017

Corporate Governance Structure
SUBARU has chosen a structure with a board of corporate auditors. The Board of Directors (nine members, of which three areoutside directors) and the Board of Corporate Auditors (five members, of which three are outside corporate auditors) decide,supervise, and audit the execution of important business.
This structure also enables us to achieve more sound and efficient business operations through increased effectiveness ofmanagement monitoring, by involving highly independent outside directors and outside corporate auditors. At SUBARU, inorder to enhance the practical governance structure based on our present organizational design, we have established twovoluntary meetings: the Executive Nomination Meeting (consisting of five directors, of which three are outside directors) andthe Executive Compensation Meeting (also consisting of five directors, of which three are outside directors).
In regard to the business operation system, SUBARU has established the Executive Management Board Meeting as a preliminary
consultation body to conduct deliberations on company-wide management strategies and the execution of important businessbefore their presentation at the Board of Directors Meeting. In addition, SUBARU has adopted a vice president system andestablished the Executive Board Meeting as the decision-making body of each business department, and converted the Aerospace
division into an internal company in order to clarify responsibilities and accelerate the execution of business operations.
General Meeting of Shareholders
Election anddismissal

Election anddismissal

ReportingElection and dismissal

Auditing

Corporate auditors: 2

Directors: 6

Executive Compensation Meeting*Outside directors: 3

Outside corporate auditors: 3* The Executive Nomination Meeting andExecutive Compensation Meeting eachconsist of three outside directors andtwo internal directors.

Reporting
Reporting

Submission and reporting

Auditing

Executive Management Board Meeting

Reporting

Chairman: President and CEO

Collaboration
ReportingTransfer of authority and oversight
Auditing

ReportingInternal Audit Department

56 Integrated Report 2022

Internal auditing

Vice Presidents

Collaboration

Accounting auditing

Submission/reportingof important matters
Sustainability Committee

Submission/reportingof important matters

Social Contribution Committee

Corporate operations
departments at HQ

Automotive Business Unit

Executive Meeting

Aerospace Company

Executive MeetingGroup Companies

Corporate Governance Meeting

Policy instruction andapproval of plans, etc.

Environmental Committee

Plan proposal andreporting, etc.

Risk Management andCompliance Committee

Business operations execution functions

Accounting auditors

Appointment,
dismissal and oversightDecision making andoversight functions

Collaboration

Executive Nomination Meeting*

2020

2021

17

16

13

12

13

98.4%

100.0%

100.0%

100.0%

Note: In addition to the number of Board of Directors’ meetings shown in the above table, there was one written resolution passed in FYE March 2019, two in FYE March 2020, one
in FYE March 2021, and one in FYE March 2022 that were deemed equivalent to a Board of Directors’ meeting, pursuant to Article 370 of the Companies Act and the Articles
of Incorporation. Attendance rates for newly appointed directors are calculated based on the number of Board of Directors’ meetings held after their appointment.

Executive Nomination and Executive Compensation Meetings
Organization

Executive Nomination Meeting

Executive Compensation Meeting

Chairman

Chairman of Board of Directors

Chairman of Board of Directors

Composition

Independent Outside Directors: 3, Directors: 2

Independent Outside Directors: 3, Directors: 2

Role/
responsibility

To ensure the fairness and transparency of decisions on
executive appointment, and based on ample deliberation by its
membership, a majority of which is independent outside
directors, this committee submits proposals to the Board of
Directors regarding policies for the composition of the Board of
Directors, the appointment or dismissal of the CEO and othertop management members, and the nomination of candidates
for directors and corporate auditors. It also determines andmakes proposals for appointment, dismissal, and nomination forthe same.

To ensure objectivity and transparency in decisions oncompensation for directors, the Executive Compensation
Meeting, as a voluntary committee and on the basis ofdelegation by the Board of Directors, determines individualcompensation amounts per director and other issues after ample
deliberation. Where matters concern the executive
compensation system in general, such as its revision, the Boardof Directors deliberates on proposals approved by the Executive
Compensation Meeting and decides on them by resolution.

Meetings held in
FYE March 2022

2 times

7 times

The Executive Nomination Meeting discussed mattersconcerning the submission of reports on the executive structure
and appointments, the division of duties of executives, and theappointment of representatives of major subsidiaries.

The Executive Compensation Meeting submitted revised policy
drafts for determining director compensation systems and detailsof compensation for individual directors, while deciding on
performance-linked compensation for directors (except foroutside directors) and corporate vice presidents based on
evaluations and the amount of compensation claims in respect ofrestricted stock compensation for each individual recipient.

Proposal and reporting

Board of Directors: 9

Board of Corporate Auditors: 5

(FY)
2019

99.0%

Number of meetings held
Attendance rate2018

Items deliberated
in FYE March
2022

Board of Directors

Board of Directors(Independence)(Gender Diversity)

Executive
Nomination Meeting

Executive
Compensation Meeting

Board ofCorporate Auditors(Independence)(Independence)(Gender Diversity)

Independent
outside directors

Femaledirectors

Independent
outside directors

Independent
outside directors

Femalecorporate auditors

3 out of 9
33.3%

1out of 9
11.1%

3 out of 5
60.0%

3 out of 5
60.0%

3 out of 5
60.0%

Integrated Report 2022 57

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Directors/Auditors

Corporate Data

(As of June 22, 2022)
Main Areas of Expertise

Name

Directors

Corporate
Auditors

Position

FemaleTerm

Total Yearsof Service

Tomomi Nakamura

Representative Director, President and CEO

4 years

Kazuo Hosoya

Director, Chairman

3 years

Katsuyuki Mizuma

Director, Executive Vice President, CFO and CRMO

1 yearTetsuo Onuki

Director, Executive Vice President

4 years

Atsushi Osaki

Director, Executive Vice President

Fumiaki Hayata

Director, Executive Vice President

1 yearYasuyuki Abe

Independent Outside Director

3 years

Natsunosuke Yago

Independent Outside Director

3 years

Miwako Doi

Independent Outside Director

2 years

Yoichi Kato

Standing Corporate Auditor

1 year

Hiromi Tsutsumi

Standing Corporate Auditor

2 years

Shigeru Nosaka

Independent Outside Corporate Auditor

Kyoko Okada

Independent Outside Corporate Auditor

3 years

Yuri Furusawa

Independent Outside Corporate Auditor

Newly
appointed

1 year

4 years

Board ofDirectors*

Board ofCorporate
Auditors*

Executive
Executive
Nomination Compensation Management Technology / Manufacturing /(executive
Meeting*
Meeting*
Development Procurement
experience)

Sales /
marketingGlobalFinancialaffairs andaccounting

Legal affairs,
Humancompliance
Resource
and risk
Development
management

IT / DX

1 year

3 years* and indicate attendance of the chairman and other members, respectively
Note: The list above does not cover the entire scope of knowledge held by the Directors and Corporate Auditors.

Approach to the CEO Succession Plan
SUBARU recognizes that decision making regarding top management changes (e.g., the CEO) and successor selection may have a
critical influence on corporate value. Therefore, in order to ensure a successful succession at the right timing, we invest substantial
time and resources to carefully develop and implement succession plans.
In order to hand over the business to the right person, the Board of Directors, as part of its essential duties, develops succession
plans that can convince all stakeholder groups. To ensure objectivity and transparency in the process for deciding on thereplacement and selection of the CEO, the Board of Directors appropriately supervises the preparation of proposals by the current
CEO through discussions at the Executive Nomination Meeting.
To be able to implement succession plans appropriately, the CEO begins to prepare for selection and development of theirsuccessor candidates independently upon assuming office. Key processes for this purpose include providing information on
candidates to outside directors on an ongoing basis, particularly by enabling the directors to monitor the candidates in person
continuously in day-to-day business settings, as a measure to ensure appropriate and timely evaluation and selection down the road.
The Board of Directors and Executive Nomination Meeting meet on a regular basis to review the list of essential qualities andskills required of the CEO, which may include removing and adding items, in consideration of perception of current trends, changes
in the business environment surrounding the company, and the future direction of the Group’s business strategies.
To ensure the objectivity of the successor selection process and increase the effectiveness of its supervision by the Board of
Directors and Executive Nomination Meeting, it is important to have effective selection criteria in place, particularly for use by

58 Integrated Report 2022

outside directors. To this end, SUBARU discloses two sets of criteria: “Abilities required of the SUBARU Group’s CEO” and “Five key
qualities required of the SUBARU Group’s CEO.” These criteria serve as a guide for evaluating candidates in light of quality,competency, experience, track record, specialized expertise, personality, and other factors, which have been discussed and decided
on by the Board of Directors and Executive Nomination Meeting.
Abilities required of the SUBARU Group’s CEO
The SUBARU Group’s CEO must be able to: properly understand the business environment surrounding SUBARU, its corporate
culture and philosophy, business growth stages, and medium- to long-term management strategies and challenges; facilitate
collaboration appropriately with various stakeholders; and lead all executives and employees to work together to maximize
corporate value.
Five key qualities required of the SUBARU Group’s CEO
1. Integrity
2. Broad perspective
3. Character
4. Tireless spirit or revolutionary leadership skills
5. Person of action

Integrated Report 2022 59

Value Creation Story

Outside Directors/Outside Corporate Auditors•T he outside corporate auditors are expected to perform a management oversight function independent
from the management team and undertake their role of auditing from the viewpoint of legality andappropriateness on the basis of broad and advanced knowledge.

Category

Directors
Corporate
auditors

Outside Directors

YasuyukiAbe

Natsunosuke
Yago

Outside Corporate Auditors

MiwakoDoi

Meeting Attendance

As representative director and senior managing executive officer of Sumitomo
Corporation, Mr. Yasuyuki Abe has been involved in management in both a supervisoryand executional capacity, possesses extensive experience and knowledge in business
management, and has an advanced understanding of the IT field. Mr. Abe has served
three years as an independent outside corporate auditor for the Company since June
2016. During his tenure, he has supervised the execution of duties conducted bydirectors, as well as understood the true nature of the problems facing the Company
and offered his frank opinions to senior management in a timely and appropriatemanner. In June 2019, Mr. Abe was appointed to the position of independent outside
director and has been providing beneficial advice to the Company’s management. In
light of this, the Company appointed Mr. Abe with the expectation that he will provide
sufficient advice and oversight of all aspects of the Company’s management from an
independent perspective as an outside director of the Company.
Mr. Natsunosuke Yago served successively as president and representative executive
officer and chairman at Ebara Corporation, and has extensive experience andknowledge in business management. Mr. Yago is especially knowledgeable in theareas of internal control and governance. In June 2019, the Company appointed him
to the position of independent outside director. Given that he has been providing
beneficial advice to the Company’s management based on his rich experienceand wide range of knowledge, and high level of insight into the Company’s social
responsibilities, we appointed Mr. Yago with the expectation that he will provide
sufficient advice and oversight of all aspects of the Company’s management from an
independent perspective as an outside director of the Company.

As a researcher and supervisor in the field of information technology at Toshiba
Corporation, Ms. Miwako Doi has accumulated vast experience and made many
achievements in this field over many years. In addition, she has held successive
positions, mainly in government committees, owing to her high level of expertiseand extensive experience and knowledge. In June 2020, the Company appointed herto the position of independent outside director. Given that she has been providing
beneficial advice to the Company’s management for the generation of new innovation,
we appointed Ms. Doi with the expectation that she will provide sufficient advice
and oversight of all aspects of the Company’s management from an independent
perspective as an outside director of the Company.

ShigeruNosakaMr. Shigeru Nosaka has been involved in management in both a supervisory andexecutional capacity as a director, executive deputy president and deputy chairman
and CFO at Oracle Corporation Japan and possesses extensive experience andknowledge in business management. In June 2019, Mr. Nosaka was appointed to theposition of independent outside corporate auditor and has been providing beneficial
advice to the Company’s management based on his wide range of insights into
finance and accounting in corporate activities. In light of this, the Company appointed
Mr. Nosaka with the expectation that he will appropriately perform the duties as an
outside corporate auditor of the Company.

Kyoko
Okada

Ms. Kyoko Okada has accumulated extensive experience and knowledge in areas suchas CSR and corporate culture at Shiseido Co., Ltd. and has a career in management
auditing as a corporate auditor at Shiseido. In June 2019, Ms. Okada was appointed
to the position of independent outside corporate auditor and has been providing
beneficial advice to the Company’s management based on her wide range of insights
into CSR and corporate culture in corporate activities. In light of this, the Company
has once again appointed Ms. Okada with the expectation that she will appropriately
perform the duties as an outside corporate auditor of the Company.

Yuri
Furusawa

Ms. Yuri Furusawa has held key positions in the Ministry of Land, Infrastructure,
Transport and Tourism, and has been involved in the promotion of workstyle reform,
active participation by women and diversity in the Cabinet Secretariat, as well as inoverseas business development in the private sector, giving her a broad perspective
and a high level of insight. Based on this background, we expect that she willappropriately perform her duties as an outside corporate auditor of the Company
from an independent standpoint. Therefore, we believe her to be qualified for the
position and nominated her as an outside corporate auditor.

(FYE March 2022)

Board ofDirectors

Attended
13 of 13
meetings

Board ofCorporate Auditors—

Significant Concurrent Positions(As of June 30, 2022)

Outsidecorporate
auditorsS UBARU provides its directors and corporate auditors with information and knowledge regarding its business activities thatis necessary for them to fulfill their responsibilities to oversee and audit management directors and corporate auditors on an
ongoing basis with information•R efresher courses focusing on information regarding the Companies Act and other laws and regulations related tocorporate governance•P articipation in seminars and programs hosted by government agencies, Japan Federation of Economic Organizations, Japan
Association of Corporate Directors, Japan Audit & Supervisory Board Members Association, etc.
PolicyOutsidedirectors

Reasons for Appointing the Outside Officers and Major Activities
Reasons for Appointing

Corporate Data

Training Policy/ Major Ongoing Programs
Policy•S
 UBARU has established criteria for independence of outside officers in addition to the criteria for
independence established by the Tokyo Stock Exchange, and appoints outside directors and outside
corporate auditors who meet those criteria.

Independent
Officer
Status*Mechanisms Supporting Value Creation

Executive Officer Training

Nomination Criteria • T he outside directors are expected to perform a monitoring function independent from the
management team and provide appropriate advice on management on the basis of a wide range of
sophisticated knowledge.

Name

Commentary on Strategy

S UBARU provides its outside officers on an ongoing basis with information relating to the Company’s corporate statement,
corporate culture, business environment, and other matters, mainly through arranging appropriate opportunities, such as
operations briefings from business divisions and factory tours, as well as creating an environment for officers to share informationand exchange opinions more easily.

•T he following programs are provided to outside Board members at the time of appointment and subsequently to keepthem updated:-O pportunities for discussions with and briefings from responsible vice presidents about the corporate statement, corporate culture,business environment, and the performance, situation and issues of each business division/department- Inspection tours at manufacturing/R&D/distribution sites- Discussions with directors and corporate auditors on management issues- Social gatherings with directors and corporate auditors

Outside Director, HOYA
Corporation
Director, Chairman, WASEDA
University Ventures, Inc.
Advisor, ORANGE AND
PARTNERS CO., LTD.

- Participation in company-wide business events, such as improvement activity debriefing sessions
PolicyVice
PresidentsS UBARU gives vice presidents similar opportunities as those given to directors and corporate auditors, for the purpose ofdeveloping human resources to lead its management in the future.

•P articipation in external programs aimed at fostering the mindset required for executive management and motivating
self-improvement actions• L ectures by invited experts in specific topics to share and increase literacy in the related field (legal affairs, compliance, IT, the SDGs,
media response, etc.)• Strategy-building camps for all vice presidents

Attended

13 of 13—

meetings

Attended

13 of 13—

meetings

President, Ebara Hatakeyama
Memorial Foundation
Outside Director, J. FRONTRETAILING Co., Ltd.

Auditor, National Institute ofInformation andCommunications Technology(NICT) (part-time)
Executive Vice President,
Tohoku University (part-time)
Executive Director, Nara
Institute of Science andTechnology (part-time)
Outside Director, Isetan
Mitsukoshi Holdings Ltd.
Outside Director, NGK Spark
Plug Co., Ltd.

• Recommendation and support for participation in appropriate external seminars and programs* Expenses to be incurred for offering the above training to directors and corporate auditors, including outside officers and vice presidents are borne by the company.

Category•N ewly appointed directors and vice presidents participated in three-day external seminar programs
One director participated in a total of five programs on corporate governance
University-held public courses were offered on a voluntary and selective basis
All executives(including•C lassroom lectures by invited experts were held for all executives to discuss management issues
outside officers)(Total of seven sessions held)•S eminars by invited experts in specified topics, including about the Companies Act, were offered via on-demand streaming (Total of
two sessions held)
Outsidedirectors

Attended

Attended

13 of 13

12 of 12

meetings

meetings

Attended

Attended

13 of 13

12 of 12

meetings

meetings

Newly
appointed

Corporate Auditor, dotD, Inc.
Advisor, AI Dynamics Inc. Japan

Programs Provided in FYE March 2022

Outsidecorporate
auditors•B usiness-related briefings from, and discussions with, vice presidents and others•M anagement roundtable discussions attended by all 13 directors and corporate auditors (two meetings, one held every six months)•O utside directors and outside corporate auditors participated in in-house presentations and exhibits about future technologies andquality solutions

Outside Audit & Supervisory
Board Member, Daio Paper
Corporation
Outside Director, JACCS Co., Ltd.
Outside Audit & Supervisory
Board Member, NEC
Corporation

Outside Audit & Supervisory
Board Member, Kubota
Corporation* Independent officers: Outside directors and outside corporate auditors with no risk of a conflict of interest with general shareholders as stipulated by the stock exchange.

60 Integrated Report 2022

Integrated Report 2022 61

Value Creation Story

Effectiveness Evaluation of the Board of Directors
SUBARU’s Board of Directors (BoD) analyzes and evaluates the Board’s effectiveness in accordance with the Corporate
Governance Guidelines and considers and implements improvements to address any issues identified.
In FYE March 2022, the BoD confirmed efforts to address issues recognized in the previous year, based on monitoring ofpoints raised in the previous year’s evaluation. It also gathered, analyzed, and evaluated views on issues for speedy Board
discussion and investigation, based on the impact of the COVID-19 pandemic and dramatic changes in the businessenvironment surrounding the automobile industry.

Methods of evaluation and analysis(1) Timing: January 2022(3) Process: Self-evaluation using a questionnaire preparedby a third-party body(a)	Third-party body conducts anonymous self-evaluation
survey of directors and auditors(b) Third-party body aggregates and analyzes responses(c)	BoD verifies and discusses report received
from third-party body(2) Respondents: Directors and auditors (13 in total)(4) Questions: (a) BoD management structure(b) BoD oversight function(c) Shareholder dialogue(d) Views on key efforts undertaken this year(e) Issues for next year onward(f) Views on other matters

Respondents evaluated themselves on a four-point scale. They were also free to add their own thoughts on points of
excellence relating to the BoD and points requiring enhanced BoD effectiveness, before submitting the questionnaire directly
to the third-party body.

Evaluation Results
Based on the report received from the third-party body aggregating and analyzing results, the SUBARU BoD discussed andconfirmed the following points:

Corporate Data

Mechanisms Supporting Value Creation(2) Discussions on the executive compensation system design, including incentive compensation	After active discussion, in which outside executives offered constructive opinions on the compensation structure andincentive design, a decision was made to revise the compensation system to be linked to the mid-term management vision.
In response to the demands of the times regarding corporate governance and to SUBARU’s business environment, theExecutive Compensation Meeting will continue to examine issues so that the executive compensation system will function
as an appropriate incentive for the management team.

(3) Discussions on improvement of group governance	The group governance management system has been making steady progress every year, including timely and appropriate
reporting of important issues to the BoD. The BoD’s supervisory responsibility over group governance has been increasing,and it will continue with regular monitoring so as to further strengthen the management system.

Future Initiatives
The BoD will continue its efforts to deepen discussions of and improve the quality of, the medium- to long-term management
strategy. With regard to risk management systems and operations, the BoD will also expand discussions on the establishment of asystem to appropriately address newly identified risks, in light of the increased sensitivity to risk management due to supply chain
disruptions caused by semiconductor shortages. In taking these and other actions, it will strive to maintain and improve BoD
effectiveness with the aim of continuing to enhance medium- to long-term corporate value and achieving sustainable growth.

Results of the Questionnaire
Operational Structure of the Board of Directors
FYE March 2022
FYE March 2021

Supervisory Function of the Board of Directors and Dialogue with Shareholders
FYE March 2022
FYE March 2021

Composition of the
4.0 Board of Directors

Supervisory functions of
4.0 the Board of Directors

Evaluation scale

Evaluation scale
4.0: Excellent
1.0: Poor
Involvement in the
Board of Directors

	As in previous fiscal years, the results confirmed that BoD management entails the conduct of free, open, and sound discussion.
	Points confirmed as strengths in previous evaluations (chairman’s leadership, responses to cross-shareholding, and size of theBoD) continued to be evaluated highly, confirming that Board strengths are being passed down systematically and sustained.

Commentary on Strategy

3.0
2.0
1.0

Support system for the
Board of Directors

Operation of theBoard of Directors

4.0: Excellent
1.0: Poor

Decision-making process

3.0

Dialogue withshareholders

2.0

Risk management systemof the Board of Directors

1.0

Nomination andcompensation of executives

Status of discussions
by the Board of Directors

	Evaluation scores greatly improved for last financial year’s issue of executive compensation system design, including
incentive-based compensation, as a result of active discussions on the review of the executive compensation system.
	Evaluations improved on discussions of strengthening governance and responding to social and environmental problems asa result of active discussions on responding to revisions to Japan’s Corporate Governance Code.

Evaluation Items
Category	Regarding the ongoing issue of discussion of medium- to long-term management strategy, evaluation scores improved, if only
slightly, as a result of careful discussion on the disclosure of our progress report for the mid-term management vision “STEP.”	Although evaluation scores fell regarding the risk management system, we recognize that this is due to supply chain
disruptions caused by semiconductor shortages, and we have confirmed that the risk management system and its operation
are properly established.
	Since four (three directors and one corporate auditor) of the 13 executives are newly appointed, and the evaluation criteria may
differ for each executive, we believe that caution is required when making simple comparisons with the previous evaluation.

(1) Composition of theBoard of Directors(2) Operation of theBoard of Directors

1. O perational
structureof the Boardof Directors

2. S upervisory
functionsof the Boardof Directors* Events for the exchange of opinions on important topics for SUBARU, held by directors and corporate auditors but not requiring resolution

3. D ialogue withshareholders

62 Integrated Report 2022

Composition of the Board of Directors(diversity and expertise)

Frequency, length, and time allocationof meetings

Relevance of agenda items

Quality and quantity of documents

Timing of document distribution

Prior explanation

Content of explanations and reports

Leadership by the Chair

Adequate discussion—

Provision of information tooutside directors

Training of outside directors

Training of inside directors——

Attitudes to initiatives

Company-wide perspective

Mutual respect

Diverse values

Stakeholder perspectives—

Reporting system

Supervision of corporate management—

Risk management system

Subsidiary management system

Provision of information and measures
to combat risk

System for managing progress of
response measures

Penetration of compliance awareness—

Discussion of management strategy

Discussion of capital policy

Discussion of cross-shareholding forpolicy purposes

Discussion of strengthening governance

Response to social andenvironmental problems—(4) Nomination andcompensation of
executives

Composition of the Executive
Appointment Committee andExecutive Compensation Committee

Cultivating successors

Incentive compensation

Dialogue with shareholders

Sharing the views of shareholders
and investors

Enhancing dialogue with shareholders
and investors—(4) Support system for the
Board of Directors(1) Supervisory functions of
the Board of Directors(1) Enhancing discussion of medium- to long-term management strategy

Composition of the Board of Directors(ratio of inside to outside directors)

Environment and systems for theprovision of information(5) Involvement in the
Board of Directors

Areas previously recognized as problematic where significant progress was acknowledged this year:	We recognize that we have deepened the understanding of SUBARU’s business environment, especially among outside
executives, through careful discussions upon the disclosure of the mid-term management vision "STEP" and ample
discussions on our environmental portfolio at management discussions and social gathering events*. Based on theseresults, we have decided to continue to address this issue, recognizing that the discussion of medium- to long-term
management strategy requires further enhancement in both quality and quantity, given the lack of clarity and certainty intrends in the automobile industry.

(3) Decision-making process

Diagnostic Item

Size of the Board of Directors(2) Risk management systemof the Board of Directors(3) S tatus of discussions by
the Board of Directors

Integrated Report 2022 63

Value Creation Story

Compensation for Directors
As of FYE March 2023, SUBARU has revised its restricted stock compensation plan introduced in FYE March 2018 for the
purpose of providing directors with an incentive for sustained improvement of the Company’s corporate value over the
medium to long term and having directors further share value with the shareholders. With this revision, the Company has
added a variable compensation type linking the number of shares granted to the achievement levels for target performance.
In revising the stock compensation plan, the Board of Directors, at its meeting held on March 3, 2022, decided that the policy
for determining details of compensation for individual directors, which had been deliberated by the Executive Compensation
Meeting, would be subject to approval at the 91st Ordinary General Meeting of Shareholders held on June 22, 2022. The
proposed policy proposal was approved as proposed at the meeting.

Summary of Revisions to Director Compensation in FYE March 2023

Revised compensation structure
The ratio of compensation for the Representative Director, President and CEO has been set as 45% for basic compensation,
30% for annual performance-linked bonus, and 25% for restricted stock compensation (15% for variable compensation type
(PSU*1) + 10% for fixed compensation type (RS*2)) upon achievement of the key performance indicators (KPIs) set forth in the
mid-term management vision “STEP.”As before, basic compensation is the sole compensation paid to outside directors in view of their roles of fulfillingmonitoring and oversight functions of corporate management from an independent position.

By a resolution passed at the 85th Ordinary General Meeting of Shareholders, held in June 2016, the maximum total amount ofannual compensation, etc., for directors is 1.2 billion yen (including a maximum 200 million yen for outside directors). The
maximum total amount of monetary compensation is 200 million yen per year, within the abovementioned limitation, by aresolution passed at the 86th Ordinary General Meeting of Shareholders, held in June 2017. By a resolution passed at the 75th
Ordinary General Meeting of Shareholders, held in June 2006, the maximum total amount of annual compensation, etc., forcorporate auditors is 100 million yen.

Matters concerning delegation of authority over the details of compensation, etc. for individual directors

SUBARU has voluntarily set up an Executive Compensation Meeting in order to enhance the effective governance structure
based on the existing organizational design. By resolution delegated from the Board of Directors, the Executive Compensation
Meeting, of which independent outside directors are a majority of its members, determines specific compensation amounts, etc.
of individual directors following sufficient deliberation. Its authorities include the determination of specific amounts of basic
compensation, annual performance-linked bonuses, and restricted stock compensation, as well as their payment schedule. For
restricted stock compensation, the number of shares allotted to individual directors is determined by the resolution of the Boardof Directors based on decisions of the Executive Compensation Meeting. In regard to revisions of the compensation system andother matters pertaining to compensation overall, proposals approved by the Executive Compensation Meeting are deliberated
and decided on by the Board of Directors.
The Policy for Determining Details of Compensation for Individual Directors*1 PSU: Performance share unit
*2 RS: Restricted stock

1. Basic policy
As a basic policy, compensation for directors of the Company is determined in view ofthe following items:(1) Compensation is at a level commensurate with the roles and responsibilities of
directors and is appropriate, fair, and balanced.
(2) The compensation structure is determined by giving consideration to providing
motivation for sustained improvement in corporate performance and corporate
value and securing excellent human resources.
Specifically, for directors (excluding outside directors), compensation is composed ofbasic compensation, annual performance-linked bonuses, and restricted stockcompensation (for non-residents, phantom stock instead of restricted stock). For outside
directors, the Company pays only basic compensation in view of their roles of fulfillingmonitoring and oversight functions of corporate management from an independent
position. The total compensation for individual directors and the levels of eachcompensation item are set for every position, depending on differences in responsibility, byutilizing the research data compiled by outside specialized agencies.

Annual performance-linked bonuses (Short-term incentive)
We have set up a compensation table more closely linking compensation to annual performance the higher the rank, based on
the KPI of consolidated profit before tax for the fiscal year under review. Based on this table, cash compensation is paid at a
certain time of each year. For executive vice presidents, senior vice presidents, and vice presidents, specific amounts will be
determined after taking into consideration annual performance and level of contribution to human resource development.
Such compensation will not be paid to outside directors.
Restricted stock compensation (Medium- and long-term incentive)
The Company introduced a fixed compensation type (RS) restricted stock compensation in FYE March 2018.
With this revision, in order to encourage the achievement of the goals in the SUBARU Group’s mid-term management
vision, we have added variable compensation type (PSU) restricted stock to the compensation structure to increase the weightof stock compensation. In addition, the KPIs for the variable compensation type (PSU) will be reviewed in conjunction with
updates to the mid-term management vision and management indicators. For this revision, consolidated ROE will be used forquantitative (financial) evaluation and employee engagement (employee satisfaction rating) will be used for qualitative (nonfinancial) evaluation. Such compensation will not be paid to outside directors.

2. P olicy for determining the amount of monetary compensation excluding performancelinked compensation (hereinafter, the “Fixed Monetary Compensation”),
performance-linked compensation, and non-monetary compensation (including thepolicy for determining the timing or conditions for granting such compensation)(1) Policy for the Fixed Monetary Compensation
Directors receive the Fixed Monetary Compensation monthly as basic compensation.
The amount for individual directors is determined based on their positions, taking into
consideration elements such as the business environment.
(2) Policy for performance-linked compensation
For annual performance-linked bonuses for directors (excluding outside directors), we have
set up a compensation table based on rank and the KPI of consolidated profit before tax forthe fiscal year under review. Based on this table, cash compensation is paid at a certain timeof each year.
In addition, in order to encourage the achievement of goals in the Group’s medium- tolong-term strategy, a portion of restricted stock compensation (described in (3) below) to be
granted as non-monetary compensation will be PSUs, where the number of shares granted islinked to the degree to which performance targets are achieved. In addition to consolidated
ROE, which is the financial indicator emphasized in our medium-term strategy, we will adopt
employee engagement as a non-financial KPI for these PSUs.
The Company will review the KPIs for annual performance-linked bonuses and PSUs as needed,based on changes in the environment and reports from the Executive Compensation Meeting.
(3) Policy for non-monetary compensation
The Company grants restricted stock compensation to directors (excluding outside directors)
for the purpose of providing them an incentive for sustained improvement of the Company’s
corporate value and further value sharing with shareholders. For restricted stock compensation,a portion shall be provided as the fixed compensation type, with the rest as the variable
compensation type. Both of these shall be prohibited from being transferred during therecipient’s term of office, and this restriction on transfer shall be lifted upon their retirement.
For fixed compensation-type restricted stock compensation (RS), shares of the Company’scommon stock are granted at a certain time each year at an amount equivalent to a baseamount determined in consideration of the Company’s business performance, responsibilitiesof each director, and other factors.
For variable compensation-type restricted stock compensation (PSUs), units (one unit = one
share) are granted at a certain time each year at an amount equivalent to a base amountdetermined in consideration of the Company’s business performance, responsibilities of eachdirector, and other factors. After an evaluation period, shares of the Company’s common stock

BeforeCompensation System for Directors (excluding outside directors)
Fixed portion

Performance-linked portionLong-term incentives

Basic compensation

Short-term performance-linked
compensation

Restricted stockcompensation

Compensation System for Directors (Representative Director, President & CEO) after revisions
Fixed portion

Short-term incentive

Medium- and long-term incentive

Restricted stock compensation
Basic compensation

Annual performance-linked Bonuses

45%

30%

Composition of compensation

Non-financial

Fixedcompensation
type (RS) 10%

Consolidated profit before tax
Financial

3. Policy for determining the proportion of the Fixed Monetary Compensation,
performance-linked compensation, and non-monetary compensation to the total
amount of compensation, etc. for individual directors
The Company has set the following as a general guideline for proportions of compensation
by type for directors (excluding outside directors), in reference to the compensation levels
and compensation mix of companies of a similar scale to the Company or industry peers
obtained through an external research company, and in consideration of factors such as theCompany’s overall salary level and social situations (performance-based compensation is a
proportion of the base amount).
Breakdown
Basiccompensation

Rate
Restricted stockcompensation

Annualperformance-linked
compensation

RS

President

PSU

Directors
otherthan thePresident

Fixed monetary compensation

45%

50%

Performance-linked compensation

45%

40%

Non-monetary compensation

25%

20%

The Company shall appropriately review the compensation level and compensation mix in
consideration of the Company’s business environment, as well as the situation of companiesof a similar scale to the Company or industry peers, and other circumstances based onreports from the Executive Compensation Meeting.

4. M atters concerning the determination of details of compensation, etc.
for individual directors

The Executive Compensation Meeting, by a resolution of and upon delegation by the Boardof Directors, determines specific amounts of compensation, etc. for individual directors,
following sufficient deliberation by its members including outside directors. Its authorities
include the determination of specific amounts of basic compensation, annual performancelinked bonuses, and restricted stock compensation, as well as their payment schedule. For
restricted stock compensation, the number of shares allotted to individual directors isdetermined by the resolution of the Board of Directors based on decisions of the Executive
Compensation Meeting. In regard to revisions of the compensation system and othermatters pertaining to compensation overall, proposals approved by the Executive
Compensation Meeting are deliberated and decided on by the Board of Directors.
To ensure transparency and effectiveness of the executive compensation determination
process, the Executive Compensation Meeting shall, by a resolution of the Board of Directors,
be structured so that the majority of its members are outside directors, and its chairman shallbe appointed by a resolution of the Board of Directors.

Non-Financial

Total Compensation for Directors and Corporate Auditors for FYE March 2022

Consolidated ROE
Classification

Employee engagement (employee satisfaction rating)* In determining the specific amount of annual performance-linked bonus for executive vice presidents, senior vice presidents, and vice presidents, the Company shalltake into consideration consolidated profit before tax and level of contribution to human resource development.

Directors (excluding outside directors)
Corporate auditors (excluding outside corporate auditors)
Outside directors and outside corporate auditors
Total

64 Integrated Report 2022

are granted at an amount equivalent to the number of units multiplied by a payout ratio (50% to100%) determined in accordance with achievement levels for performance indicator targets.
The maximum number of shares of the Company’s common stock to be granted as
restricted stock compensation to directors, for RS and PSUs combined, is 150,000 per year.
In addition, the Company and its directors shall enter into a restricted stock allotment
agreement that includes an overview and provisions that state (1) Company executives shallnot, while they serve in their positions as executives and for a set period of time, transfer,create a security interest on, or otherwise dispose of the shares of the Company’s common
stock that have been allotted to them, and (2) the Company may acquire the said shares of its
common stock without compensation if certain events occur. If a director is a non-resident ofJapan at the time shares are granted, the Company shall grant phantom stock in place of andequivalent to the restricted stock compensation that would have been granted, and the stock
shall also be treated in accordance with the restricted stock allotment agreement.

Applicable performance indicator (KPI) to compensation composition

Annual performance-linked bonuses
Variable compensation type (PSU)
restricted stock compensation

Variable compensation
type (PSU) 15%
Financial

Corporate Data

Mechanisms Supporting Value Creation

Matters concerning the resolutions of the General Meetings of Shareholders on compensation, etc. for directors
and corporate auditors

Matters Concerning the Policy for Determining Details of Compensation for Individual Directors

After

Commentary on Strategy

Number9
3
5
17

Total Compensation (Millions of yen)
Basic Compensation(Paid in fixed monthly installments)

Short-term Performance-linked
Compensation

Restricted Stock Compensation

294
56
59
409

51
—
—
51

52
—
—
52

397
56
59
512

* The above table shows actual compensation payments under the former compensation system.
*F igures in the above table include three internal directors and an internal corporate auditor who resigned before the last day of the fiscal year under review. At the end of
the year, there were nine directors, including three outside directors, and four corporate auditors, including two outside corporate auditors.
*T he restricted stock compensation in the above table includes the amount of phantom stock expense recorded for grants to non-residents.

Integrated Report 2022 65

Value Creation Story

Cross-Shareholding

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Auditing

Policy for cross-shareholding

Auditing by Corporate Auditors

SUBARU holds listed stocks as cross-shareholdings and engages in dialogues with the companies in question. Each year,
SUBARU’s Board of Directors quantitatively measures and compares benefits from holdings, using dividend yield, and thecapital cost involved, using weighted average cost of capital (WACC), in order to verify each. The Company will maintain theseholdings only if it deems, based on the results of this verification, that the shares will contribute to its medium- to long-term
management and business strategies in a qualitative manner.

SUBARU has formulated internal rules to ensure the effectiveness of corporate auditors’ audits (e.g., Standards for Corporate
Auditor’s Audit) and developed a whistleblowing system. In this way, the Company has established a framework where thecorporate auditors can gather information from directors and employees as needed in case of matters that may cause significant
damages to the Company, significant violation of laws/Articles of Incorporation, or other significant compliance matters. In addition,
the framework ensures smooth performance of corporate auditors’ duties by assigning employees independent from directors to
support duties of corporate auditors and making them known to all employees.
In FYE March 2022, audits focused on (1) the status of risk management promotion, (2) the Group governance system, and (3) the
progress of the mid-term management vision “STEP.” These confirmed the soundness of efforts to resolve overall management
issues, including governance, at each department and Group company.

Verification details for cross-shareholding
Based on the above policy, SUBARU has steadily reduced the number of listed stocks held as cross-shareholdings. As a result, 60
issues held at the end of March 2015 decreased to two issues at the end of March 2021. We consider these two issues to be
essential to hold at this time for the following reasons, but we will continue to hold dialogues with these companies at least once a
year, and the Board of Directors will evaluate and scrutinize these issues annually to determine whether they should be held or not.
(Millions of yen)

Main Initiatives(1) Confirming management monitoring and execution(Issues)

80,00080

60

60,00040,00060

38,503

32

40

30
18

28,23820,00012,795

20

10

8,836

4

3,138

0

2015

2016

Total amount reported on the balance sheet (left)

2017

2018

2019

1,922
2020

2

1,727

2021

2

1,592

2022

0
(FYE)

Number of issues (right)

As of March 31, 2022
Number ofsharesAmount reported on
the balance sheet(Millions of yen)

Purpose of holding, impact of holding and reason for increase in number of shares

2,850,468

1,009

The Gunma Bank, a local bank in the area where the Company’s main factory is based, supports not
only SUBARU but also local supplier sites in Japan and abroad through its financial services. As thebank is an important partner, the Company will continue to hold the bank’s shares to promote fair andsmooth financial transactions.

583

The Mizuho Financial Group firms have been supporting SUBARU with financial transactions and otherservices. In particular, Mizuho Bank has long been the Company’s most important financial partner,
providing support in a broad area of management. The Company will continue to hold the group’s
shares to promote fair and smooth transactions.

IssuesThe Gunma Bank, Ltd.

Mizuho Financial Group, Inc.

372,097

In accordance with audit plans by corporate auditors, each corporate auditor attends important meetings, including those of the Board of Directors,
Executive Management Board Meeting, and Risk Management and Compliance Committee. When in attendance, they monitor management
decision-making processes, seek explanations as necessary, and actively express their opinions. Through exchanges of opinions with directors, vicepresidents, and others, as well as site visits to major business establishments and Group companies, corporate auditors also confirm the status ofbusiness execution including the maintenance and operation of internal controls, with a focus on priority audit items.
We also ensure the effectiveness of audits by utilizing remote methods, such as online meetings, as necessary and when appropriate.

(2) Meetings with departments related to internal controls
The Legal Department and the Risk Management and Compliance Office report monthly on compliance concerns including the operation of thewhistleblowing system, and human resource departments report regularly on the status of issues such as disciplinary cases and industrial accidents.
In addition, the Company receives reports from the departments in charge of managing subsidiaries on the status of governance and internal
controls for subsidiaries as appropriate.

(3) Cooperation in the three-party audit system
The Company holds monthly audit report meetings with the Internal Audit Department, receives reports on all internal audit results, and exchanges
information and opinions on internal control issues.
Furthermore, we receive quarterly reports from the accounting auditors on the status of accounting audits and exchange opinions with them asnecessary on major matters for consideration in audits and other subjects, thereby ensuring close mutual cooperation in the three-party audit system.
In addition, we hold meetings to exchange opinions and share information with corporate auditors of Group companies as appropriate, and we
also seek to collaborate with these corporate auditors by requesting their attendance at site visits to their respective Group companies.

Based on the findings confirmed through the above audit activities, we capture a range of opportunities to engage with thebusiness execution side, including exchanges of opinions with all corporate auditors, the chair of the Board of Directors, andthe representative directors, and at Group company presidents’ meetings. Through these activities, we share information andprovide necessary advice and recommendations for the resolution of important management issues, including thestrengthening of Group governance.

Criteria for exercising voting rights for cross-shareholding

Internal Auditing

With regard to the exercise of voting rights for listed stocks held as cross-shareholdings, the Board of Directors deliberates on anddetermines the criteria for exercise with evaluation items such as whether the company is consistently exhibiting poor performance,
whether a sufficient number of independent outside directors are in place and if management is supervised appropriately, andwhether there are any corporate governance issues present. Although these are our general principles, we hold dialogues at least
once a year with companies whose stock we hold to avoid making blanket decisions. Accordingly, we exercise our voting rights
appropriately in light of the performance, management policies, and medium- to long-term management plans of the companies inquestion, as well as from the perspectives of corporate value enhancement, corporate governance, and social responsibility.

SUBARU has established the Audit Department (15 members) that reports directly to the President as an internal auditingorganization. This organization evaluates the state of the development and operation of internal controls with regard to businessexecution at SUBARU and its Group companies in Japan and overseas from an independent and objective standpoint, providing
advice and proposals for improvement. The Audit Department systematically conducts audits of business execution inaccordance with an annual business audit plan prepared at the beginning of each fiscal year, taking into consideration the risks
and internal control status of the entire Group. Audit reports are distributed to all directors, corporate auditors, and relevant
departments at the same time as reports are directly made to the President. In parallel with this, reports are also made at semiannual meetings of the Board of Directors and quarterly at joint meetings consisting of all vice presidents.
SUBARU’s Audit Department and corporate auditors work together to strengthen audit functions, as described in”Cooperation in the three-party audit system” above. In addition, we strive to strengthen audit functions by sharing information
with the accounting auditors on audit plans and audit results on a quarterly basis. In addition, the internal Audit Department
periodically undergoes an evaluation by external experts to confirm that audit operations are being performed appropriately.

Internal Control
Management System
With the aim of increasing the effectiveness of internal controls and risk management, the Internal Audit Department was madeindependent of the Risk Management Group, overseen by the Chief Risk Management Officer (CRMO), to ensure a higher level of
independence of internal audit departments in the organization and to enhance the effectiveness of internal controls.

Internal Control System
In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, SUBARU’s Board of Directors has
adopted a basic policy on putting in place systems that ensure that the performance of duties by directors is in conformity with laws
and regulations and with the Articles of Incorporation, and other systems prescribed in the ordinance of the Ministry of Justice as
being necessary to ensure the appropriate operations of the company and the corporate group consisting of the company and its
subsidiaries. The Board of Directors maintains and operates this basic policy, reviewing it as needed.

Internal Control System Related to Financial Reporting
Regarding internal control reporting systems pursuant to the Financial Instruments and Exchange Act, the evaluation of theinternal control system related to financial reporting is carried out on the final day of the consolidated accounting period and isconducted in accordance with generally accepted assessment standards for internal control over financial reporting.
The President & Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) evaluated the status of the developmentof the internal control system related to financial reporting as of March 31, 2022, and affirmed that it has been establishedproperly and functions effectively, and issued an internal control report audited by the accounting auditors to that effect.
Securities Report and Financial Report are published in the Investor Relations section of the SUBARU website.

https://www.subaru.co.jp/ir/library/securities-reports.html (Japanese version only)
https://www.subaru.co.jp/en/ir/library/financial-reports.html

66 Integrated Report 2022

Integrated Report 2022 67

Value Creation Story

Commentary on Strategy

Corporate Data

Mechanisms Supporting Value Creation

Compliance

Our Approach

Breakdown of Compliance Hotline Consultations and Trends Over TimeAt SUBARU, compliance is positioned as one of our most important management issues in our Corporate Governance
Guidelines. We instill in each employee a strong awareness that thorough group-wide compliance forms the foundation of
SUBARU’s management, that we must observe all laws and internal regulations relevant to our business activities, that our
corporate activities must be executed in a manner that is fair and just and in conformance with general social ethics, common
sense and standards, and that these principles should be reflected in their actions. We have also created and operate acompliance system/organization, and carry out activities such as providing all kinds of training for these purposes.

(FYE March)

2018

2019

2020

2021

2022

Workplace environment

10

13

14

7

5

Labor related

49

78

68

65

72

Interpersonal relationships, harassment

58

75

84

107

78

Other compliance-related issues (Work violations, suspicion of wrongdoing, etc.)

46

33

50

57

59

Total

163

199

216

236

214

Management System
SUBARU has established the Risk Management and Compliance Committee, a company-wide organization designed topromote compliance. This committee deliberates, discusses, decides, and exchanges information on important mattersrelated to risk management.
Also, each department formulates their own implementation plan (compliance program) to promote compliance every fiscal
year, and moves forward with continuous, systematic independent activities.

Compliance System
AuditorEstablish
Internal audit
Results report

Report extremely important,highly urgent compliance issues

Board ofDirectors

CEO

Report important matters(e.g., deliberations/decisions)

Risk Management and Compliance Committee

Risk Management and Compliance Committee members

Audit
Department/Internal Audit

At SUBARU and its Group companies in Japan, we consider the prevention of bribery in connection to our businesses as animportant issue, and work to ensure the following approach is rigorously permeated.

Report important matters rohibition of providing, offering, or promising improper entertainment, gifts, favors, or other economic benefits to publicP
officials or persons in similar positions, whether in Japan or abroad

Secretariat
Risk Management and Compliance Office(Risk Management and Compliance Oversight Department)
Discussion/cooperation

Discussion/reporting concerning scandals
Report compliance situation

Risk Management Officers(Meeting of persons in charge of risk management)
Persons in charge of risk management
Conduct internal
audit

Discussion/cooperation

Each division, department, and in-house company
Affiliated companies

Compliance Hotline
When regular and temporary employees of SUBARU and its Group companies in Japan detect a problem related tocompliance in the group, they can consult with the Hotline Desk by using the Compliance Hotline.
There were 241 consultations in FYE March 2022, the details of which are outlined in the table on the next page. Throughinitiatives to raise awareness of this system, SUBARU has improved awareness of compliance and fostered an atmosphere
where employees can consult even about trivial matters. This has resulted in an increasing trend in the number of consultations
over the previous five years.

68 Integrated Report 2022

In enforcing thorough compliance, we believe that initiatives in which the entire SUBARU Group acts in concert are necessary. We
conduct compliance training, training for legal affairs in practical business, and other programs for all Group employees in Japan
organized by our Legal Department, Risk Management and Compliance Office, and human resource and education departments.
In particular, more than 15,000 employees have participated in video-based training programs introduced in light of work
environment changes due to COVID-19, as we work to improve compliance awareness for all employees at SUBARU and its
Group companies in Japan. In addition, to complement compliance enlightenment training, study groups are held at eachdepartment and affiliated company based on their compliance program, covering important laws and regulations related totheir work. These include export controls, the Act on the Protection of Personal Information, the Antimonopoly Act, and thePolitical Funds Control Act.

Bribery Prevention

Risk Management and Compliance Committee Chair (CRMO)

Administrative work

Training

 rohibition of providing or receiving an amount in excess of socially accepted norms in dealings with business partners andPcustomers who are not public officials or similar persons
 rohibition of receipt of personal gain as a result of using information obtained in the course of business, establishingPboundaries between public and private life
Under the monitoring system for bribery prevention, SUBARU collects information to ascertain the presence of cases that
may constitute compliance violations through company-wide compliance activities, its whistleblowing system, and otherchannels. It also strives to use actions such as internal audit departments’ business audits to detect cases early. Furthermore,
SUBARU has established a system to report high-risk cases to the Risk Management and Compliance Committee and theBoard of Directors, in an effort to strengthen oversight.

Tax Policy
The SUBARU Group is able to conduct its business operations thanks to support from society, and it strongly recognizes theimportance of returning profits to society. The SUBARU Group considers fulfilling its tax obligations to be an essential element of this.
The SUBARU Group strives to ensure compliance with the tax laws and regulations of each country and jurisdiction, pursuant
to the international rules and standards set out by international organizations, thereby fulfilling its societal obligations throughappropriate tax payments, while aiming for sustainable growth through sound business activities.

For Other Compliance Information
Please refer to our website for details about Corporate Governance Guidelines and Tax Policy

https://www.subaru.co.jp/en/csr/governance/compliance.html

Integrated Report 2022 69

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Business Overview

Automotive Business Unit

Automobile Sales by Region

Other regions 43,000
Australia 37,000

Japan 101,000

Europe 22,000
RetailAutomobile
Sales

China 17,000(Jan-Dec 2021)

North America 641,000

Product Lineup

Sports / Wagon

SUV (BEV)SUBARU’s history as an automaker began with the launch of the SUBARU 360 in 1958. Since then, we have worked continually
to provide new value in automobiles by developing new categories based on our core technologies, such as the horizontallyopposed engine and symmetrical all-wheel drive (AWD), and by creating new technological value, including EyeSight*, the world’s
first driver assist system. These actions have deepened our relationships with customers. In recent years, we have positioned the
U.S. as an important market, with a strategy of concentrating limited management resources in fields in which we should extend
our strengths and advantages, including product lineups focused on SUVs and sports models. We provide Enjoyment and Peaceof Mind through high value-added products. In addition, we are working to create ever-better cars in our alliance with Toyota
Motor Corporation, bringing together our mutual strengths.

Unit sales : —Unit sales : 26 thousand units

Sales region : Japan, North America,

Sales region : Japan, Europe, Australia, and other

Europe, China

Sports / Sedan(Other markets: EVOLTIS)

Unit sales : 33 thousand units

SUV

Sales region : Japan, North America, Australia, and other

Unit sales : 64 thousand units
Sales region : North America, and other* EyeSight is the first driver assist system to provide all functionality solely through the use of stereo cameras
Sports / Coupe
Unit sales : 7 thousand units

SUV

Consolidated Revenue
Contribution Ratio

Revenue

Operating Profit(Billions of yen)(Billions of yen)

3,062.3 3,007.6

3,193.9

Sales region : Japan, North America, Europe, Australia, and other

Unit sales : 193 thousand units
Sales region : Japan, North America, Europe, Australia, China, and other

Sedan

361.5
2,737.5 2,677.5

Unit sales : 25 thousand units

SUV

Automotive
Business

172.1

200.3

(FYE March 2022)

Sales region : North America, Australia, China, and other

Unit sales : 237 thousand units
Sales region : Japan, North America, Europe, Australia, China, and other

109.1

92.5

Wagon · Sedan

97.6%
18/3
JGAAP

19/3

20/3

21/3

IFRS

22/3

18/3
JGAAP

19/3

20/3

21/3

SUV

22/3

IFRS

Unit sales : 201 thousand units

Photo: Prototype

Sales region : Japan, North America, Europe, Australia, China, and other

Unit sales : 56 thousand units
Sales region : Japan, North America, Europe, Australia, and otherOEM

In pursuit of SUBARU’s goal of zero fatal traffic accidents by 2030*, we will not only further evolve preventive, passive,and other safety performance areas, but also strengthen connected safety, building greater safety in all situations.
To contribute to a carbon-free society, we will promote the development of core technologies in areas such as battery
electric and hybrid vehicles, while leveraging alliances to accelerate our initiatives toward achieving carbon neutrality.
SUBARU will continue to evolve its unique technologies, cultivate and enhance future technology in a way that adapts
to changes in the times, and continue to refine the SUBARU difference to provide Enjoyment and Peace of Mind to
customers around the world.
*R educing to zero the number of fatal accidents occurring while a driver or passenger in a SUBARU vehicle and the number of fatalities among pedestrians, cyclists, andthe like arising from collisions with a SUBARU vehicle.

Unit sales : 20 thousand units
Sales region : Japan (OEM supply from Daihatsu Motor Co., Ltd.)
Notes 1: Retail unit sales in each region for the period from January 1 to December 31, 2021.
2: Regional sales results are for the aforementioned period.

70 Integrated Report 2022

Integrated Report 2022 71

Value Creation Story

SUBARU Core Technologies

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

SUBARU Models through the Years
Note: our production models

1977

SUBARU Global Platform

1995

2014

Balancing a high degree of both drive quality andpassive safety performance
SUBARU is sequentially introducing the SUBARU Global Platform, starting with the
Impreza launched in October 2016. The vehicle platform substantially increases
body and chassis rigidity and further lowers vehicle center of gravity, raising thelevel of Active Safety and Passive Safety and delivering responsive handling
performance and a comfortable ride with reduced unpleasant vibration and noise.

Brat released

1958

1983

Outback released(Japan: Grand Wagon)

1997

Levorg released

2014

SUBARU Global Platform

Symmetrical All-Wheel Drive (AWD)

Superior overall weight distribution
The combination of the low center of gravity provided by the horizontally-opposedengine and superior longitudinal-transverse weight balance achieved by placing
the transmission near the center of the vehicle maximizes all-wheel drive capability
and delivers superb driving performance in various conditions. SUBARU has beencommitted to Symmetrical AWD as a core technology that drivers can depend onin every situation from day-to-day town use to high-speed highway driving.

SUBARU 360 released

1961

Domingo released

1984

Forester released1998

WRX released

2018

Symmetrical All-Wheel Drive
SUBARU Sambar truck released

1966

Horizontally-Opposed Engine (Boxer engine)

Justy released

1985

Pleo released

2005

Ascent released(Exclusively for North America)

2022

Compact, low center of gravity
The horizontally-opposed engine has pistons arranged symmetrically to the left andright of the crankshaft. The opposed pistons mutually cancel out engine vibrations,which reduces vibrations conveyed to the vehicle interior. The engine’s low heightand compact design contribute to a low vehicle center of gravity. The stable
attitude provides a high sense of security during driving.

SUBARU 1000 four-door sedan released
Subaru Boxer

Conventional
In-Line Engine

1969

Alcyone released

1989

B9 Tribeca released

SOLTERRA released

2008

EyeSight Driver Assist System

Stereo cameras for advanced object
recognition capabilities
By using two cameras positioned on the left and right like human eyes, the EyeSight
driver assist system is able to detect vehicles and pedestrians ahead of the vehicle
in three dimensions and to accurately determine the distance, shape, and velocityof each object. This preventive safety technology helps avoid accidents, minimizes
damage, and reduces the burden on the driver. The next-generation EyeSight
system installed in the 2020 SUBARU Levorg features redesigned stereo camerasthat allow for expanded visibility, as well as 360-degree sensor capabilities from thefour radar units located at the front and rear of the vehicle. This system contributes
to safe driving in an even wider range of situations, including intersections. In
addition, the EyeSight X advanced driver assist system adopted in the new Levorg
in Japan combines information from sources such as the GPS and QZSS “Michibiki”
satellite systems with high-precision 3D map data, which extends driving support
functions including lane change assist, slowing the vehicle before going into a curb,
and hands-off driving assist in traffic congestion. We provide the latest features that
reduce the burden on the driver and allow for safer, more comfortable road travel,
particularly on highways, while maintaining value for money.
72 Integrated Report 2022

R-2 released

1971

Stereo cameras

Leone coupe released1972

Rex released

Legacy series released

1992

Vivio released

1992

Impreza series released

Exiga released

2012

SUBARU BRZ released

2012

SUBARU XV released

Integrated Report 2022 73

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Business Overview

Aerospace Company
Overview of Center Wing Box and
SUBARU’s Technology

SUBARU’s roots trace back to 1917 and the Aircraft Research Laboratory, later to become Nakajima Aircraft. In the defense
program, we develop, manufacture, maintain, repair, and provide technical support for products such as the UH-1J and UH-2
utility helicopters used by the Japan Ground Self-Defense Force (JGSDF) for disaster relief and other purposes, the T-5 andT-7 for supporting pilot training at the Japan Maritime Self-Defense Force and the Japan Air Self-Defense Force, more than 15
models of unmanned aerial vehicles, and flight simulators. In the commercial program, we participate in many international joint
development projects for Boeing. For the 777X, Boeing’s large passenger airliner, we are responsible for the Center Wing and
its integration with the main landing gear (MLG) wheel well, as well as MLG doors, Wing-to-Body Fairings (forward), and side-ofbody sections.

Consolidated Revenue
Contribution Ratio

Revenue

Operating Profit(Billions of yen)(Billions of yen)

2.3%

Since first participating in the Boeing passenger program in 1973,
we have been involved in development and production as a key
partner of Boeing for more than 40 years. SUBARU manufactures
the center wing box, the critical aircraft section where the right andleft wings are attached to the front and rear fuselage sections. Since
the center wing box contains the fuel, it needs to be incrediblystrong and watertight. For these reasons, great accuracy andadvanced assembly technologies are required for its manufacture,and SUBARU is one of the few companies capable of making it.
The Handa Plant, located in Aichi Prefecture and where center
wing boxes are manufactured, is a global-level production center
that produces these parts for the Boeing 777X as well as for the
Boeing 777 large airliner, theBoeing 787 mid-size airliner,
the Ministry of Defense’s P-1
maritime patrol aircraft, andthe C-2 transport aircraft.

A center wing box (Handa Plant)

The Aerospace Company will contribute to
the enhancement of the SUBARU brand.

12.3
142.2

134.1

142.1
6.0

5.1

87.7

Aerospace
Company

62.3(FYE March 2022)

-7.0
-9.8

18/3
JGAAP

19/3

20/3

21/3

22/3

IFRS

18/3
JGAAP

19/3

20/3

21/3

22/3

IFRS

Senior Vice President, Company
President of Aerospace Company

Primary Products and Services
SUBARU BELL 412EPX UH-2 utility helicopter AH-64D attack helicopter T-5 and T-7 trainers
The Center Wing Section of Boeing 787 The Center Wing Section of Boeing 777 & 777X

Flying Forward Reconnaissance System

We will continue to refine our original, cutting-edge technologies cultivated over our corporate history by engaging indevelopment and production of a wide variety of aircraft. Our latest helicopter, the SUBARU BELL 412EPX (the base model for
the JGSDF UH-2), was jointly developed through our alliance with U.S.-based Bell Textron. Production and sales are alreadyunderway. SUBARU is currently working to produce and deliver the UH-2 utility helicopter used by the Japan Ground SelfDefense Force (JGSDF) and its commercial version, the SUBARU BELL 412EPX. These represent a prime business for SUBARU.
We are also focusing our efforts on the unmanned aerial vehicle business, which leverages SUBARU’s technological strengths.
Furthermore, toward the development of a mobility society, we will continue to take on greater challenges to develop into an
aircraft manufacturer with a global presence, such as by participating in the New Energy and Industrial Technology Development
Organization (NEDO)’s Drones and Robots for Ecologically Sustainable Societies project (DRESS project).

74 Integrated Report 2022

Shoichiro Tozuka

We are integrating many aerospace systems for commercial
transport components, military aircrafts, helicopter systems and
UAV’s, from R&D to manufacturing through operational support.
Flight safety is critical factor for aircraft, and for many years we havefostered a culture in which quality and safety are recognized as
inextricably linked and uncompromisingly pursued. This total safetyconcept is at the core of the SUBARU difference. In the defense
program, we are working to mass produce and deliver the UH-2
utility helicopter used by the JGSDF, in the interest of making this apillar of the Aerospace Company’s business going forward.
Furthermore, orders and sales are steadily growing for the SUBARUBELL 412EPX, the commercial version of the UH-2.
The commercial transport programs have continued to facedifficulties due to the impact of COVID-19 and other factors, butthere are signs of recovery in demand for both domestic andinternational routes, suggesting demand for passenger aircraft will
steadily recover. In preparation for this expected leap in growth,
we are taking firm action to advance our defense and helicopter
programs while continuing to work with our partner companies tostrengthen our business resilience.

Integrated Report 2022 75

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Consolidated Ten-year Financial Summary
Subaru Corporation and its consolidated subsidiaries
Years ended March 31IFRS

J-GAAP
’13/3

’14/3

’15/3

’16/3

’17/3

’18/3

’19/3

’19/3

Operating results (for the year)

’20/3

’21/3

’22/3

Operating results (for the year)*1

Net sales

Millions of yen

1,912,968

2,408,129

2,877,913

3,232,258

3,325,992

3,232,695

3,160,514

Revenue

Millions of yen

3,156,150

3,344,109

2,830,210

2,744,520

Cost of sales

Millions of yen

1,501,809

1,728,271

2,017,490

2,187,136

2,386,266

2,442,706

2,561,753

Cost of sales

Millions of yen

2,558,262

2,728,605

2,337,614

2,240,595

Gross profit

Millions of yen

411,159

679,858

860,423

1,045,122

939,726

789,989598,761

Gross profit

Millions of yen

597,888615,504

492,596

503,925

Selling, general and administrative expenses*1 Millions of yen

290,748353,369

437,378479,533

528,916

410,542403,232

Selling, general and administrative expenses Millions of yen

298,875

308,227

279,867

303,136

Operating income

Millions of yen

120,411

326,489

423,045565,589

410,810379,447

195,529

Operating profit

Millions of yen

181,724

210,319

102,468

90,452

Income before income taxes

Millions of yen

93,082

328,865

392,206

619,003394,695

297,340

195,838

Profit before tax

Millions of yen

186,026

207,656

113,954

106,972

Net income attributable to owners of parent Millions of yen

119,588

206,616

261,873436,654282,354

220,354

147,812

Profit for the period attributable to owners of parent Millions of yen

141,418

152,587

76,51070,007

Depreciation/amortization*2, *3

Millions of yen

61,544

61,486

71,821

72,93885,653102,102102,749

Depreciation/amortization*3

Millions of yen

187,077

192,742

206,317224,055

Capital expenditures*3

Millions of yen

94,986

98,537

135,346

168,338

196,616

193,789

169,960

Capital expenditures*3

Millions of yen

274,281284,669

258,229

244,436

R&D expenses

Millions of yen

49,14160,092

83,535102,373

114,215

121,084

102,719

R&D expenditures

Millions of yen

102,719

118,735

101,626

113,752

Millions of yen

596,813770,071

1,030,719

1,349,411

1,464,888

1,561,023

1,612,825

Total equity

Millions of yen

1,689,899

1,720,123

1,786,383

1,901,019

Millions of yen

595,365

765,544

1,022,417

1,343,732

1,458,664

1,552,844

1,605,291

Equity attributable to owners of parent Millions of yen

1,682,248

1,712,881

1,777,735

1,890,789

Millions of yen

1,577,454

1,888,363

2,199,714

2,592,410

2,762,321

2,866,474

2,982,725

Total assets

3,180,597

3,293,908

3,411,712

3,543,753

37.7

40.5

46.5

51.8

52.8

54.2

53.8

52.9

52.0

52.1

53.4

210,134

289,376

195,651

Financial position (at year-end)

Financial position (at year-end)

Net assets
Shareholders’ equity
Total assets*4

Ratio of shareholders’ equity to total assets*4%

Cash flows

Ratio of equity attributable to owners of parent to total assets

Millions of yen%

Cash flows

Net cash provided by (used in) operating activities Millions of yen

166,715

313,024

311,543614,256

345,442366,298

174,006

Net cash provided by (used in) operating activities Millions of yen

250,732

Net cash provided by (used in) investing activities

Millions of yen(71,370)(33,903)(172,780)(255,676)(254,252)(150,711)(158,327)

Net cash provided by (used in) investing activities

Millions of yen(190,119)(25,844)(272,174)(179,723)

Free cash flow

Millions of yen

95,345279,121

138,763358,580

91,190215,587

15,679

Free cash flows

Millions of yen

60,613

184,290

17,202

15,928Net cash provided by (used in) financing activities

Millions of yen(60,766)(63,011)(110,546)(126,190)(189,044)(170,937)(96,617)

Net cash provided by (used in) financing activities

Millions of yen(141,551)(15,818)

13,966(98,502)

Per share

Per share

Net income (EPS)

Yen

153.23264.76335.57559.54365.77287.40192.78

Profit for the period attributable to owners of parent (EPS)

Yen

184.44198.99

99.77

91.28

Net assets (BPS)

Yen

762.87980.981,310.15

1,721.90

1,902.56

2,025.31

2,093.60

Equity attributable to owners of parent (BPS)

Yen

2,193.97

2,233.76

2,318.17

2,465.41

Dividends

Yen

15

53

68

144

144

144

144

Dividends

Yen

144

100

56

56

Other information

Other information

Non-consolidated exchange rate

Yen to the U.S. dollar

82

100

108

121

108

111

111

Non-consolidated exchange rate

Yen to the U.S. dollar

Number of shares issued

Thousands of shares

782,865

782,865

782,865

782,865

769,175

769,175

111

109

106

112

769,175

Number of shares issued

Thousands of shares

769,175

769,175

769,175

769,175

Number of shareholders*5

Persons

28,89051,38670,942

79,59476,471

132,570

133,879

Number of shareholders*5

Persons

Number of employees (parent only) Persons

12,717

13,034

13,883

14,234

133,879

145,289

142,890

147,507

14,70814,87915,274

Number of employees (parent only)

Persons

15,27415,806

16,478

16,961

Number of employees (consolidated) Persons

27,50928,54529,774

31,151

32,59933,54434,200

Number of employees (consolidated)

Persons

34,20035,03436,07036,910

Number of units

Number of units*6

Consolidated automobile unit sales

Thousand units

724

825

911

958

1,065

1,067

1,000

Vehicle unit production

Thousand units

764

813

914

951

1,056

1,050

989

DomesticThousand units

583

650

708

715

721

701

617

Overseas*7

Thousand units

181

164

207

236

335

349

372

Note: The Subaru Group has voluntarily applied International Financial Reporting Standards (IFRS) since the first quarter of FYE March 2020
*1 Change of accounting policy effective from FYE March 2019 (deduction of sales incentives from net sales); retroactively applied to the figures for FYE March 2018
*2 Accompanying a change in accounting policy effective from the FYE March 2019, change of depreciation method for certain tangible fixed assets of the Company
and its major domestic consolidated subsidiaries from the declining-balance method to the straight-line method*3 Total amount of property, plant and equipment and intangible assets*4 Partial Amendments to Accounting Standard for Tax Effect Accounting have been applied from FYE March 2019, and retrospectively applied to the figures for FYE March 2018.
*5 Number of shares per trading unit: 100 shares*6 Automobile unit sales of Subaru Corporation and its consolidated subsidiaries*7 U.S. production base Subaru of Indiana Automotive, Inc.

76 Integrated Report 2022

Consolidated automobile unit sales*6 Thousand units

1,001

1,034

860

734

Thousand units

989

1,031

810

727

DomesticThousand units

617

664

525

455

Overseas*7

Thousand units

372

367

285

272

Vehicle unit production

Financial Information
Please visit the SUBARU website for details about financial information.

https://www.subaru.co.jp/en/ir/library/

Integrated Report 2022 77

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Five-year Unit Sales
Years ended March 31

Consolidated Automobile Sales by Region(Thousand units)
’18/3

Japan
LegacyImpreza
ForesterLevorgWRX
ExigaSUBARU BRZOEMOthers
Passenger cars
Minicars
Japan total

’19/3

’20/3

’21/3

(Thousand units)

’22/3

9.3
66.7
18.1
21.3
8.3
3.5
1.9
2.9
0.5
132.6
30.9
163.4

6.1
47.4
32.1
13.2
7.1
0.2
1.3
2.7
0.1
110.2
26.0
136.2

4.7
42.9
30.1
11.8
8.5
—
1.2
2.7
—
101.9
23.9
125.8

2.6
30.7
22.9
20.1
2.8
—
0.8
1.9
—
81.9
19.9
101.8

4.9
22.5
23.4
15.0
0.2
—
5.0
1.7
—
72.6
16.8
89.4

234.4
213.7
186.2
32.5
—
4.2
670.9

213.9
197.0
155.6
26.5
63.1
3.7
659.7

197.2
196.5
200.5
21.0
84.6
1.8
701.6

186.3
173.6
176.2
18.7
54.9
2.0
611.6

153.1
149.7
121.9
20.2
58.8
2.6
506.3

’18/3

U.S.
LegacyImpreza
Forester
WRX
AscentSUBARU BRZ
U.S. total

’20/3

’21/3

’22/3

China
LegacyImpreza
Forester
SUBARU BRZ
China total

5.5
4.6
15.7
1.0
26.9

3.8
3.8
15.2
—
22.8

2.7
1.6
15.6
0.8
20.6

4.9
2.2
17.4
0.0
24.5

3.9
1.1
8.8
0.1
13.9

Other regions
LegacyImpreza
ForesterLevorgWRX
AscentSUBARU BRZ
Other regions total

7.5
23.6
19.1
0.9
1.6
—
0.2
53.0

5.7
20.6
22.2
1.1
1.4
—
0.3
51.4

3.4
16.0
23.5
0.9
1.2
0.0
0.3
45.3

2.2
9.9
14.0
0.2
0.4
0.7
0.1
27.5

4.5
10.6
10.9
0.0
0.3
0.5
0.3
27.2

Overseas total

903.5

864.6

908.0

758.4

644.6

Global total

1,066.9

1,000.8

1,033.9

860.2

734.1

Consolidated Automobile Sales by Model

CanadaLegacyImpreza
Forester
WRX
AscentSUBARU BRZ
Canada total

14.2
23.1
14.3
4.5
—
0.7
56.8

13.3
22.1
12.5
4.1
4.1
0.7
56.8

13.0
25.7
14.8
2.5
4.0
0.4
60.4

9.7
24.0
10.4
2.6
2.7
0.3
49.7

11.4
24.5
7.3
2.6
2.7
0.6
49.1

EuropeLegacyImpreza
ForesterLevorgWRX
SUBARU BRZEurope total

6.9
16.6
13.2
1.9
1.2
0.4
40.2

6.5
14.9
9.1
0.8
0.3
0.5
32.1

8.8
13.2
12.7
1.9
—
0.4
37.0

3.2
5.9
4.3
0.1
0.0
0.2
13.7

6.0
5.9
3.1
0.0
—
0.0
15.0

Australia
LegacyImpreza
ForesterLevorgWRX
SUBARU BRZAustralia total

13.3
25.1
12.4
1.1
2.8
0.9
55.7

10.6
16.7
12.2
0.3
1.5
0.4
41.7

8.0
16.1
16.9
0.3
1.3
0.5
43.1

7.2
9.8
12.3
0.2
1.5
0.4
31.4

9.2
12.2
10.5
0.1
0.8
0.4
33.2

* Legacy sales figures include sales of the Outback model.
* Impreza sales figures include sales of the SUBARU XV and Crosstrek models.

’19/3(Thousand units)’18/3

LegacyImpreza
ForesterLevorgWRX
Exiga
AscentSUBARU BRZOEMMinicars
OthersGlobal total

291.2
373.4
279.0
25.3
51.0
3.5
—
9.3
2.9
30.9
0.5
1,066.9

Consolidated Automobile Sales by Region

by country

Vehicle type

1,067

1,001

259.9
322.5
258.8
15.4
41.0
0.2
67.2
6.9
2.7
26.0
0.1
1,000.8

’21/3

237.8
312.0
314.1
15.0
34.4
—
88.6
5.4
2.7
23.9
—
1,033.9

’22/3

216.1
256.1
257.5
20.5
26.1
—
58.3
3.9
1.9
19.9
—
860.2

193.0
226.5
185.9
15.2
24.1
—
62.1
8.9
1.7
16.8
—
734.1

(Thousand units)

1,200
1,067

1,034

900

’20/3

Consolidated Automobile Sales by Model(Thousand units)

1,200

’19/3

1,001

1,034

900

860

860

734

734

600

600

300

300

0

0
’18/3

Japan

U.S.

Canada’19/3
Europe’20/3Australia

’21/3
China

’18/3

’22/3
Others*Automobile sales of Subaru Corporation and its consolidated subsidiaries

Legacy
WRX
OEM

’19/3
Impreza
Exiga
Minicars’20/3
ForesterAscentOthers

’21/3

’22/3
LevorgSUBARU BRZ*Automobile sales of Subaru Corporation and its consolidated subsidiaries

Other Financial Information
The summary of consolidated financial results and presentation materials for results briefings are published in the Investor Relations section of the SUBARU website.

https://www.subaru.co.jp/en/ir/

78 Integrated Report 2022

Integrated Report 2022 79

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Activities in the Six Priority Areas for CSR in Relation to SDGs

Six Priority
Areas

Relevant
Stakeholders

Initiatives

ThemesFYE March 2021
Enjoyment ofdriving a car
Providing enjoymentof customizationFYE March 2022

FYE March 2022–FYE March 2026

Customers

Localcommunities

Six Priority
Areas

Initiatives

ThemesFYE March 2021

FYE March 2022

FYE March 2022–FYE March 2026

Vision/KPIs(FYE March 2026–
FYE March 2031)
Six Priority Areas for CSR

Relevant
SDGs

Expanding the number of female managers (at least two times 2021 levels by 2025)

Promoting active roles
for female employees

Expansion of the lineup of high-performance, value-added items

Childcare support for female employees in
direct departments

Creating workplaces where female employees in
direct departments can thrive and play an active role

Respecting human rights and diversity for all

Promotion of motorsports and continuation of awareness-raising activities
Advancement of Subaru’s “Dynamic x Solid”
design identity to “bolder” expression“Designing experiences” with a focus on resonance withcustomers under the vision of “Earth-tainment: Enjoying
the Earth Together”

Proposing new
forms of mobility

Proposing new forms of mobility andresearching technology unique to SUBARUTechnology development toward realization

Disseminating
car culture

Dissemination of SUBARU’s manufacturing practice and its endeavors for “Enjoyment andPeace of Mind”

Become a company thatenriches people’s lives andminds as a partner.

Review of the human resources system forsenior employees

9.1

KPI
• Continue customer
satisfaction surveys.
(Improve customer
evaluation results.)

Operation of the human resources system forsenior employees

Promotion of active roles for non-Japanese human resources

Employees
Utilizing diverse
human resources

Examination and promotion of a workplace environment that pays due consideration to minorities
in society
Compliance with the legally prescribed employment rate for persons with disabilities: 2.3% in
and after FYE March 2021

Diversity

11.2

Acquiring new knowledge through proactively recruiting external human resources

Promote diverse
work styles

Utilizing digital technologies to strengthen relationships with customers

Strengthening
relationships withcustomers

Relevant
Stakeholders

Development of high-quality accessories matched with new models

Promotion of marketing activities that match the characteristics of each market

Enhancing thebrand image

Relevant
SDGs

Evolution of SUBARU Global Platform and Integration with Intelligent Technology(Achieving safe and enjoyable driving with peace of mind like a skilled driver)

Promotion of the brand strategy (SUBARU, the Beloved Brand: More than a Car Company)

People-oriented
Car Culture

Vision/KPIs(FYE March 2026–
FYE March 2031)
Six Priority Areas for CSR

Business
partners

Efforts in cooperation
with business partners

Customers

Providing a wide rangeof products

Diverse work styles: Labor management via a new attendance management system and support
for hybrid work leading to improved productivity
CSR surveys, awareness-raising, and stronger CSR initiatives in the supply chain withbusiness partners

Promote businesses thatcreate diverse forms ofmarket value while respecting
the diverse values of all
people.
KPI• Increase female managers.
(at least two times 2021
levels by 2025)• The number of participantsin career developmenttraining• Achieve the legallyprescribed employmentrate.
• 100% of those applying forre-employment

5.5
5.5.2

8.5

Enhancement of the understanding of employees, promotion of cooperation with U.S. minority organizations

Enhancement of customer loyalty
Continuation of customer interaction programs

Customers

Incorporation of feedback on diverse market needs
Design parts that can be used in multiple vehicle models

Providing products and services contributing to prosperous lifestyles

Establishing a newmaintenance system

Business
partners

Coexistence andmutual prosperity withbusiness partners

Resonance andCoexistence

Development of a maintenance system for EVs

Efficient vehicle maintenance by utilizing IT and digitaltransformation (DX)
Building of relationships with business partners with CSR surveys, awareness-raising, and from
CSR perspectives
Enhancing and strengthening the Group’s telecommuting environment
Reinforcement of efforts for occupational health and safety, improvement of plant environments

Employees

Creating asafe working
environment

Expansion of the sale of EVs (including models with e-BOXER)

Enhancing the maintenance system forpromoting EVs

Creation of a safe and rewarding workplace environment, building of a brand that is lovedby employees
Continuation of production operations and maintenance of employment at each site

Become a company that is
widely trusted by, resonatesand coexists with society.
KPI• Continue satisfaction
surveys.
(Improve customer
satisfaction.)• Enhance connection withcustomers through theInternet of Things (IoT).
(MySubaru, the nextgeneration system,
telematics)

Customers

Popularizing vehicles
that reduce
environmental impact

Introduction of solar power generation for self-consumption
Introduction of hydroelectricity and green electricity

17.16

Environment

Governments

Business to help
reduce environmental
impactEnergy conservation investment and effective utilization of facilities
Continuation of conservation efforts in cooperation with governments
Promotion of lighter, electric, and biofuel aircraft

Reinforcement of community exchange and partnership activities

Revitalizing
relationships withlocal communities

Launch of SOLTERRA, global rollout and sales expansionof BEVs

BEV development

Establishing appropriate disposal schemes for EV batteries

11.2

Utilization of athletic teams, boosting of employee morale

Local
communities

Development and sale of EVs (BEVs and SHEVs)

Establishment and maintenance of an environmental management system

Contribution and relationship-building through sporting activities
Contributing to local communities through stronger cooperation with nonprofit
organizations (NPOs)

Business
partners

Community support activities during disasters and pandemics

Environmental
activities incooperation withbusiness partners

Efficient parts storage and transportation
Promotion of retailers’ continuous efforts for energy saving, water quality conservation,and recycling

Cherish and protect the
global environment—theearth, the sky and nature—through Group-wide
activities.
KPI• Reduce direct emissions of
CO2 by 30% from FYE March2017 levels by FYE March
2031 (aggregate amountbasis).
• Make at least 40% of
SUBARU global sales EVs or
hybrid electric vehicles(HEVs) by 2030.
• Apply electrification
technologies to all SUBARU
vehicles produced and soldworldwide by the first half ofthe 2030s.
• Formulate a resource
circulation strategy including
secondary batteries.
• Enhance recycling rates.

13.1
13.2

12.2
12.5

Optimization of logistics and complete knockdown (CKD) costs
Advancement of Advanced Driver Assistance System (ADAS)

Ensuring comprehensive
export control

Adoption of Advanced Automatic Collision Notification (AACN) system and expansion of
its functions

Improving safetyfunctions

Compliance training

Continuous enhancement of crash safety

Governments
Expanding enhanced safety functions since FYE March 2021

In-house educationand dissemination

Contributing tosafe driving

Implementing and sustaining EyeSight test rides(awareness-raising for advanced safety technology), etc.

Establishing andstrengthening a
reliable productsupply system

Establishment of a timely and efficient supply system of spare parts and accessories

Improving inspection
and maintenancequality

Global penetration of maintenance system with high and consistent quality
Promotion of initiatives to produce vehicles of choice in terms of quality as well
Improvement of quality in all processes, from product planning to production, sales, and service

Peace of
Mind

Securing andimproving quality

Placing of the highest priority on quality by implementing quality caravans and providing
education for fostering quality awareness
Collaboration with business partners
Optimization of the span of management in manufacturing departments
Continuation and reinforcement of activities of the health and safety committees

Employees

Creating a safe
workplace

Act in good faith and become
a company that is trusted byand resonates with society.

Prevention of harassment

Compliance

Employees/Local
Communities

Protecting humanrights of workers

Strengthening product supply capacity (parts center capacity increase plans/parts supply
system improvements)
Promotion of accurate, high-quality inspection and maintenance

Promotion of compliance from the perspective of the SUBARU Group
Establishment, dissemination, and management of internal
rules and manuals on laws and regulations

Developing autonomous flight control systems(collision avoidance technology, fault-tolerant system improvements)

Customers

Reinforcement of security and export control initiatives

Implementing conflict mineral surveys
Establishment anddissemination of our
Human Rights Policy,
implementation ofdue diligence

Become a company thatprovides the utmost peace ofmind to all stakeholders.
KPI• Achieve a goal of zero fatal
traffic accidents* by 2030.
* Reducing to zero the numberof fatal accidents occurring
while a driver or passenger in a
SUBARU vehicle and thenumber of fatalities among
pedestrians, cyclists, and thelike arising from collisions witha SUBARU vehicle.

Maintenance and improvement of the workplace environment by promoting work style reforms
and complying with the Labor Standards Act

Business
partners

Maintaining fairrelationships

Promoting initiatives to respect human rights

KPI• Promote initiatives torespect human rights basedon the Human Rights Policy;
Communicate the policy
throughout the entire
supply chain.
• Strengthen CSR
procurement management.
• Provide compliance andlegal trainings.

CSR surveys, awareness-raising, and stronger CSR initiatives in the supply chain with business partners

8.7
8.8

16.5
16.5.2

Promotion of fair trade on a continuous basis
Appropriate management of software license

3.6

Note: Development of products (vehicles) is based on a premise that they are equipped with the latest technologies yet affordably priced at the same time.

• Improve impact energy
absorption ability to
1.4 times.

Maintenance and enhancement of workplace health and safety, and promotion of a more
comfortable workplace environment
Formulation andimplementation ofplans for healthpromotion initiatives

Reinforcement of health promotion efforts

Secure and create employment

Local
communities

Contributing tosafety of local
communities

Governments

Contributing to safe
lives of people

Promotion of plant
environment improvement

Promotion of a sense of trust regarding stable operations

Implementing community safety awareness activities
Reduction of environmental impact and prevention of pollution

80 Integrated Report 2022

Contribution to the creation of a society in which people’s lives and property are protected andpeople can enjoy peace of mind

Integrated Report 2022 81

Value Creation Story

Commentary on Strategy

Mechanisms Supporting Value Creation

Corporate Data

Environment

Climate Change (Disclosure in Accordance with the TCFD Recommendations)Management System
SUBARU has established the Environment Committee, which discusses measures from broad and medium- to long-term
perspectives that accommodate environmental standards required by future societies, and evaluates the progress of related
implementations and achievements. Management of climate change-related activities is included in the responsibilities of theenvironmental management structure. Environmental risks and opportunities associated with climate change are assessed andmonitored at the Environment Committee. Major issues are reported to the Board of Directors via the Sustainability Committee.
In addition, in order to contribute to the realization of a decarbonized society through the reduction of CO2 emissions
throughout the life cycle of our business activities, SUBARU operates cross-company forums and designates departments incharge of the five areas of “product use,” “materials and components,” “transportation,” “disposal,” and "manufacturing" asof FYE March 2022. These efforts are overseen by the Environment Committee.

Strategy
In order to pass on “the earth, the sky, and nature” to future generations, SUBARU is pursuing the manufacture of environmentallyfriendly automobiles. This is not only in brainstorming how to address the environment, but also how we contribute as a company
to the realization of a sustainable society. SUBARU will contribute to the achievement of an enjoyable and sustainable society
by working together with customers and other stakeholders, pursuing distinctiveness commensurate with the SUBARU difference
and the manufacture of environmentally responsible automobiles through technological innovation.
SUBARU recognizes that climate change is one of the most critical issues as it pursues the manufacture of environmentally
responsible automobiles. To address climate change-related transition risks in policy and regulation, technology, markets, andother items, dedicated departments at SUBARU identify uncertain climate change-related risks. We also formulate our own
scenarios and plans for achieving our medium- to long-term goals, based on policy trends in various countries and scenariospecific information published by the International Energy Agency and others. These scenarios and plans are examined forcompatibility with policies relevant to SUBARU.
Main Risks Identified
Climate-related Risks

Business
Managementin General
Regulatory
risk

Failure to meet fuel economy regulations in various countries could result in additional costs or losses due to legal
violations, or limit our opportunities to sell products.

Production
Phase

SUBARU could incur rising costs due to fossil fuel use, not only because of geopolitical factors associated withpetroleum etc., but also government carbon pricing systems.

Products

To promote electrification, it is crucial to ensure profitability for the entire product cycle ranging from procurement anduse to disposal. Thus, it is essential to involve SUBARU’s upstream and downstream partners in exerting efforts toward thisend. Failure to do this could render the Company unable to meet the profitability goal for the entire product life cycle.

Production
Phase

If use of renewable energy does not grow as expected, SUBARU could face slower progress in achieving its Scope 1
and 2 emissions reduction goals.

Marketrisk

Products

At present, it is difficult to make predictions with regard to electrification, which will likely cause a substantial gap withthe real state of market needs. In such a situation, SUBARU could incur unnecessary and excessive R&D costs while
facing a decline in customer satisfaction, resulting in unexpected losses and reduced sales opportunities as well as
hampered advancement of the Company’s electrification efforts. SUBARU views electrification as a steady medium- tolong-term trend. In the event of its swift and sweeping penetration of the market at some stage, SUBARU could be
unprepared for such a prospect in terms of technology and timely product lineups, and thus suffer from a resultant lossof product sales opportunities.

Reputationalrisk

Business
Managementin General

Board of Directors
Transition risk

(Presided over by the chairperson: President and Representative Director)

Sustainability Committee

Technology
risk(Chaired by the President and Representative Director)

Environment Committee(Chaired by the Executive Officer in charge of the Sustainability Division
appointed by the Board of Directors)

Production & Environment Subcommittee

Global Warming Prevention
Working Group

Physicalrisk

Domestic Affiliated Companies’
Environment Subcommittee
Sales and Service
Environment Subcommittee

Revisions to climate change targets in various countries could significantly impact our overall business.

Products

Governance Structure for Climate Change

Executive Management Board Meeting

Main Risks Identified

Acutephysical risk
Chronic
physical risk

Business
Managementin General

Failure to implement adequate initiatives to achieve zero-carbon outcomes could have an adverse impact on
recruitment and sales due to damage to brand value, and higher cost of capital due to difficulties in raising funds.
As an impact of climate change, extreme torrential rain will frequently cause floods in various locations, which could
pose risks of SUBARU’s operations being affected by disrupted supply of raw materials and submerged factories.
There is a possibility that SUBARU might suffer from shortages of natural resources used for tires and metal resources
for electrification technologies.

Logistics Environment Subcommittee
CN Promotion Meeting

Product Use
Materials and Components
Transportation

Main Opportunities Identified
Climate-related Opportunities

Market opportunity

If SUBARU’s efforts to make products more environmentally friendly and global efforts to mitigate/adapt to climate change
progress adequately, the Company will be able to maintain its key markets while at the same time potentially expanding inmarkets receptive to its offer of “Enjoyment and Peace of Mind.” In addition, contributing to mitigating climate change issues
could increase its brand value, enhancing its sales and recruiting ability, as well as decrease the cost of capital due topreferential financing from investors.

Energy source opportunity

Regarding energy use during the production phase, by transitioning to renewable energy while at the same time giving due
consideration to cost-effectiveness, SUBARU could overcome the risk of being exposed to price fluctuations involved in energy
derived from fossil fuels, thereby preventing future cost increases.

Disposal
Manufacturing

Main Opportunities Identified

Note: T he risks and opportunities described above are based on past facts and currently available information, and may change significantly due to such factors as future
economic trends and the business environment facing SUBARU. The opportunities described represent those for SUBARU’s products to contribute to climate change
adaptation and do not anticipate climate change-related deterioration.

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Corporate Data

Strategic Reorganization of Domestic Production for the Expansion and Acceleration ofElectrified Vehicle Development

Risk Management

In order to accelerate efforts in our CO2 Reduction Roadmap, SUBARU is implementing a strategic restructuring of its
domestic production system and plans to invest 250 billion yen over five years starting from FYE March 2024. As our roadmap
for this production system, we are planning to launch in-house production of BEVs*1 with a target start date around 2025, andThe automotive industry is ushering in a major transformation, which only occurs once in a century. The SUBARU Group,
which operates businesses globally, is aiming to enhance the resilience of its management infrastructure by ensuring thesustainability of its businesses through quickly tackling changes in world affairs. At the same time, the Group must boost its
measures to minimize its human, social, and economic losses. Amid this environment, it is essential to strategically conduct risk
management throughout the Group to conduct business activities. We therefore believe it is important to create a SUBARUGroup that has an infrastructure that is resilient to risk to enhance our corporate value.
To address climate change-related transition risks, dedicated departments at SUBARU gather information from a wide
range of sources and work to identify uncertain climate change-related risks from future projections. Such transition risks
are presented and discussed at the Executive Meeting. The Executive Management Board Meeting and the Board of
Directors, which are the relevant decision-making bodies, then determine measures in response.
For the physical risks associated with climate change, the Risk Management and Compliance Office plays a pivotal rolein establishing regulations in response to these operational risks as part of the BCP*2 system. During emergencies, theto increase BEV supply capacity thereafter in phases. Furthermore, we are exploring the addition of dedicated lines for BEVs
in 2027 or later, and will promote the steady installation of the next-generation e-BOXER, which combines our horizontallyopposed engine with the Toyota Hybrid System, in several models. The two main goals of this reorganization of the production
system are to build a flexible system that can ensure production of gasoline-powered vehicles and HVs as needed during thetransition to BEVs and to achieve efficient production in the BEV business, where there are still many issues of profitability, inorder to improve business potential.
We believe that the key to promoting SUBARU’s electrification strategy is to provide product value meeting the expectationsof customers while assessing the convenience of BEVs, including customer requirements and changes in preferences andvalues, as well as for infrastructure. This includes changes in markets and regulations toward a decarbonized society, as well as
for the purpose of nurturing the relationships with customers that the SUBARU Group has treasured for some time. Based on
this concept, we will continue to develop products that satisfy customers and bring them happiness. We will also continue todevelop a flexible production system that incorporates the state of the market environment.

office centrally collects Group-wide information, establishing a system to manage company-wide responses.
*2 Business Continuity Plan.

*1 BEV: Battery electric vehicle

Metrics and Targets

Strategic reorganization of domestic production2022

Mid-2020s

In order to contribute to a decarbonized society, SUBARU has set long-term goals (long-term vision) for 2050 and mediumterm goals (milestones) for around 2030, regarding the product (Scope 3) and production phases (Scope 1 and 2).

2027 or later

ICE

Category

Main Plant

Next-generation e-BOXER

Products(Scope 3)

Target Year

Goal

2050

Reduce average well-to-wheel *3 CO 2 emissions from new vehicles (in operation) by
90% or more compared to 2010 levels *4

Early 2030s

Apply electrification technologies *6 to all SUBARU vehicles *5 produced andsold worldwide

Up to 2030

Make at least 40% of SUBARU global sales EVs or HEVs

ICE

e-BOXER

Next-generation e-BOXER

Yajima Plant

Plants and offices(Scope 1 and 2)
BEV

Starting in-house BEV production (ICE/BEV mixed production line)
Adding dedicated BEV
production line
BEV

Oizumi Plant

FYE March 2051

Achieve carbon neutrality

FYE March 2031

Reduce CO 2 emissions by 30% compared with FYE March 2017 (total volume basis)*3 Well-to-wheel: Approach to calculating CO2 emissions including the emissions produced by the generation of electricity to be used by EVs and other vehicles.
*4 Reduce total CO2 emissions calculated based on the fuel efficiency (notified value) of all SUBARU automobiles sold across the world by 90% or more relative tothe 2010 levels in 2050. Changes in the sales quantity due to changes in the market environment shall be taken into consideration, while minor changes in running
distance shall not.
*5 Including material, chemical, and plastic recycling.
*6 Refers to the technology used to foster the use of electricity for EVs, HEVs, and others.

Engines
Transmissions

Kitamoto Plant(Formerly a facility to
produce industrial products)

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Next-generation e-BOXER transmissions

SUBARU is naturally working to improve the fuel efficiency of gasoline-powered vehicles while turning its attention to
expanding its lineup of EV models, especially the development and supply of BEVs. We believe it will be especially
important to steadily promote the expansion of the above initiatives in order to reduce the amount of CO2 emitted fromautomobiles. The percentage of SUBARU’s EVs as a share of global sales in FYE March 2022 was 4.9%. However, we will
strengthen our earnings base in the BEV era by strengthening our supply capacity for EVs, including the start of in-house
BEV production in the mid-2020s in conjunction with the reorganization of our domestic production system, the launch of
the next-generation e-BOXER, and the addition of dedicated BEV production lines in the late 2020s. As we do this, we will
work to ensure a high level of financial soundness, taking actions in a sustainable structure toward the achievement of ourgoal of making at least 40% of SUBARU global sales EVs or HEVs.

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Corporate Data

CO2 Emissions (Scope 3)

Results and future plan of percentage of EVs sold (retail sales basis)(%)

Greenhouse Gas Emissions (t-CO2)
Category

50

At least 40%

40
30
20

•

Adding dedicated BEV production line•

Starting in-house BEV production•

Equipping with next-generation e-BOXERFYE March 2019

FYE March 2020

FYE March 2021

FYE March 2022

1,703,682

1,992,046

1,583,247

1,430,501

1

Purchased goods and services

2

Capital goods

372,211413,287

282,713

260,5663

Fuel- and energy-related activities
not included in Scope 1 or Scope 2

103,210

104,910

93,107

90,913

4

Transport and delivery (upstream)

658,268

737,817

601,167

506,604

5

Waste generated in operations

31,98432,09526,44624,888

6

Business travel

4,446

4,554

4,689

4,798

7

Employee commuting

13,506

13,835

14,245

14,576

8

Leased assets (upstream)

N/A

N/A

N/A

N/A

9

Transportation, distribution, andsales (downstream)

13,283

6,049

3,893

4,750

10

Processing of sold products

N/A

N/A

N/A

N/A

11

Use of sold products

29,079,531

29,734,816

23,916,219

20,126,944

12End-of-life treatment of soldproducts

556,139

575,107484,440

413,368

13

Leased assets (downstream)

2,394

2,463

1,998

2,065

14

Franchises

N/A

N/A

N/A

N/A

15

Investments

N/A

N/A

N/A

N/A

and other

10
0

2018

2019

2020

2021

2030

The majority of the SUBARU Group’s CO2 emissions come from the use of the products it sells, and the SUBARU Group’s
direct CO2 emissions (Scope 1 and 2) constitute a marginal portion of total emissions when including Scope 3. However, we
believe that making proactive efforts to diminish direct emissions will encourage the entire SUBARU value chain to work as
a team and in greater earnest. Therefore, we are reducing our CO2 emissions by using renewable energy and upgrading tohighly efficient machinery and equipment with the aim of achieving carbon neutrality in 2050.
Scope 1: Direct emissions of greenhouse gases from a company’s own facilities.
Scope 2: Indirect emissions of greenhouse gases from the use of purchased or acquired electricity, heat, and/or steam
supplied by another company.
Scope 3: A ll indirect emissions other than Scope 1 and 2 emissions, including those arising from the procurement of raw
materials, transport, product use, and the disposal process, as well as arising from employee commuting,business travel, etc.

CO2 Emissions in FYE March 2022
(Scope 1, 2, and 3)

CO2 Emissions (Scope 1 and 2)(t-CO 2)800,000

Scope 1

242 thousand t(1%)

Scope 2228 thousand t

600,000

Source: The calculation method for SUBARU Scope 3 emissions has been revised in reference to the Basic Guidelines on Accounting for Greenhouse Gas Emissions(1%)

throughout the Supply Chain Ver. 2.3 (December 2017) by the Ministry of the Environment and the Ministry of Economy, Trade and Industry; Database on Emissions

400,000

339,030

335,513335,769

268,962271,695

266,023

2017

2018

2019

Unit Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply Chain Ver. 3.0 (March 2020) by the Ministry of the Environment

316,277
261,214228,364

278,236

243,393242,332

2020

2021

2022

and SUBARU’s life cycle assessment (LCA) calculation standards.

200,000
Scope 3

22,880 thousand t

0

(98%)

Scope 1For other environmental data, please visit:https://www.subaru.co.jp/en/csr/environment/(FYE March)

Scope 2

Scope:SUBARU: SUBARU CORPORATIONGroup companies in Japan: 52 domestic consolidated subsidiaries (including 33 SUBARU domestic dealerships that are consolidated subsidiaries)
Group companies overseas: Subaru of Indiana Automotive, Inc., Subaru of America, Inc., Subaru of Canada, Inc., Subaru Research & Development, Inc.
SUBARU calculates CO2 emissions within Japan based on the Act on Promotion of Global Warming Countermeasures. However, emission factors forelectricity at Group companies overseas are based on the most recent country-specific CO2 emission intensities for all power sources published annuallyby the International Energy Agency (IEA), while emission factors for fuel at Group companies overseas are based on CO2 emission intensities publishedby the U.S. Environmental Protection Agency (EPA).

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Corporate Data

Human Resources

Training Programs

Work Style Reform

SUBARU offers a wide range of learning opportunities so that all employees can develop their skills in accordance with theircareer plans and levels. In order to support employee career development, we introduced new programs in FYE March 2022,
establishing a system and environment so that we, as a company, support the growth of the individual.

As a precondition to making our customers happy, the SUBARU Group believes it is vital to provide employees with workplaces
where they can work with vigor and peace of mind and demonstrate their abilities to the fullest. In order to help diverse
employees maintain their work-life balance, we are diversifying work style options and expanding the relevant systems.
Moreover, our affiliated companies in Japan and abroad are fostering initiatives suitable for local business conditions andregional characteristics.

Structure of Training Programs
Career Training*1
Career Support*1

Sharing
Philosophy*1

Careermanagement
training

ManagerClass

Mid-level/
Regular
Employees

Philosophy
sharing program

Age-specificcareer training

Business Skill
Development
Support*1

Globally Focused
TalentDevelopment

Business skill
development
supportprograms

Mindset/Communication/
Language skills

Managerial
TalentDevelopment

Programs forselected staff

Rank-specific
Programs

Newly appointed
personnel training

Self-development
SupportTraining at eachbusiness site/Official
certification support

New employee training (after starting official employment)
New Hires
New employee training (before starting official employment)*1 New

Total participants (FYE March 2022): 27,348

Total training hours: 128,554

Average training hours per employee: 6.5

Note: Self-development support and new employee training (before starting official employment) are not included in the total number of participants or training hours.

Promoting active roles for female employees

Employment of People with Disabilities
Status of People with Disabilities

Status of Female Employees (Non-consolidated)FYE March
2022
Proportion of female employees

7.3%

Proportion of female managers

2.2%
General managers andequivalent positions

1.2%

Managers andequivalent positions

2.4%

2018

108

83

2019

107

86

April
2019

April
2020

April
2021

April
2022

269

280

291

306

318

2.28

2.30

2.30

2.36

2.39

Reemployed(Persons)

83 (21)*3
86 (27)

Reemployment
Rate (%)

100
100(Persons)

In FYE March 2020, began implementing measures for all employees, including an initiative to encourage employees who
are newly entitled to take 10 or more paid days off to take at least five days off within seven months after the entitlement.
Also established operational rules to ensure that all employees can take at least five paid days off per year.

Imposing an upper limit on overtime
working hours

Has been limiting the number of overtime work hours to 590 hours and below annually and to 79 hours and below monthly,
setting the criteria stricter than those stipulated by law.

Raising the premium pay rate for overtime
work exceeding 60 hours per monthHas been implementing necessary measures since FYE March 2011.

Equal pay for equal work

Began reviewing the amount of allowances granted to non-regular employees in FYE March 2021.

Work-from-home system

Conducted a test implementation starting in FYE March 2021, with full rollout to all sites beginning in FYE March 2022.

Abolishing mandatory core hours in theflex-time system

Full rollout to all sites beginning in FYE March 2022.

*4 This law was enacted in June 2018 to revise the labor-related laws to foster work style reform.

Paid Leave

Number of Employees Who Took Long-term Care Leave

Encourage
employees at eachsite to take leave
every month400

130 (40)

100

200

2021

97

72

72 (19)

100

100

2022

130

111

87 (24)

100

0
2018

2019

2020

2021

2022

85.7

2020
86.4

2021
95.4

2022

System for
employees to takecare of a family
member in need oflong-term care

88.7

Number of
employees
who took
this leave(FYE March)

2018

2019

2020

2021

2022

5

9

30

3

4

(Persons)

SUBARU has traditionally allowed employees, regardless of gender, to extend the their childcare leave period to the end of thefirst April after the child becomes two years old, with the option of taking leave in installments during this period.
In addition, we publish the Maternity and Childcare Leave Handbook as well as videos and materials on revisions to Japan's Childcare
and Family Care Leave Act, which is to be revised sequentially from FYE March 2023. These are made available to help not only
employees taking childcare leave but also so managers can understand the situation, and to help encourage employees to take leave.
In the first half of FYE March 2023, 94 male employees have already taken childcare leave, with the average number of days
taken being 66. This shows that the awareness of male employees balancing work and childcare, and of the promotion of activeroles for female employees, is increasing.
Number of Employees Who Took Childcare Leave(Non-consolidated)

System for
employees
to takeleave forchildcare

447

377

86.2

2019

Childcare leave system(FYE March)

Average number of days off taken by male employees
under the childcare leave system:
36 days
Largest number of days off taken by a male employee:
364 days

2018

2019

2020

2021

2022

Male

10

21

42

65

95

Female

88

80

80

93

104

Total

98

101

122

158

199

Special childcare leave taken by employees

Male

100

100

100

100

100

Female

100

97.5

95

100

98

Rate of employees
Male
who belonged to theCompany one year after
Femalereturning to work (%)

83.3

100

85

97

92

97.2

90

95

93

95

Number of employees who took leave (up to five days):
563 persons
Average number of days off taken under the system:
3.2 days
Rate of employees who took special childcare leave or
childcare leave (excluding annual paid days off):
89.5%

Number of
employees
who took
leave

300

130

*3 Figures within parentheses indicate the number of rehired employees at
Group companies.

461
376

Proportionof paid days
off taken by
employees (%)

Number of Employees Who Took
Long-term Care Leave (Non-consolidated)(FYE March)*5 P ercentage of the number of days off taken by employees of the total numberof annual paid days off granted to them.

529

500

164

2020

Encouraging employees to take at least
five paid days off per year

Number of
Numberof Employees
EmployeesAged
Aged6060andandOlder
Older

Reemployment Rate (Non-consolidated)
Applicants for
Reemployment(Persons)

Number of
employeeswith disabilities(Persons)*2
Employment
rate of people
with disabilities
(%)

April
2018

*2 According to the method of calculation specified in the Act on Employment
Promotion, etc. of Persons with Disabilities, one person with severe
disabilities is counted as two persons with disabilities.

Reemployment of Retirees
Retirees(Persons)

Details
In July 2018, introduced a company-wide attendance management system for the central management of all electromagnetic
records (computer log times and building entry/exit times) for the accurate calculation of employees’ working hours.

2018

The Diversity Promotion Office of SUBARU’s Human Resources Department leads efforts in relation to diversity. The office has
designated “supporting female employees to take on more active roles,” “promoting the employment of people withdisabilities,” “promoting the reemployment of post-retirement age workers,” and “promoting the recruitment of
non-Japanese workers” as priority themes. Among them, SUBARU has placed particular emphasis on efforts to supportand empower female employees.

FYE
March

Item
Accurate calculation of employees’
working hours

Annual Paid Leave Utilization Rate*5 (Non-consolidated)

Diversity Management(Breakdown)

SUBARU’s response to the Act on the Arrangement of Related Acts to Promote Work Style Reform*4

Rate ofemployees who
returned to work (%)(Non-consolidated)(FYE March)

For other employee data, please visit:https://www.subaru.co.jp/en/csr/social/resources/data.html

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Global Network

History of the SUBARU Group

Global Network

The SUBARU group, which can trace some of its roots to Aircraft Research Laboratory, has continuously
nurtured highly creative technologies and increased corporate value by enhancing the SUBARU brand

Main Overseas Business Sites

to respond to major changes in the times.

Head Ofﬁce

1917

Establishment of Aircraft Research Laboratory

1993

Start of operation of the Handa Plant

1931

Establishment of Nakajima Aircraft Co., Ltd.

1999

Capital and business alliance with
General Motors Corporation (GM) (U.S.)

1945

Change of company
name from Nakajima
Aircraft to Fuji Sangyo

1999

Business alliance with Suzuki Motor Corporation

2000

Dissolution of the business alliance with
Nissan Motor Co., Ltd.

2002

Dissolution of the SIA joint venture with Isuzu Motors Ltd.
and formal signing of a contract production agreement

2003

The Legacy wins the 2003–2004 Car of the Year Japan award

2003

Subaru of Indiana Automotive, Inc. (SIA) made awholly owned subsidiary

2005

Participation in the Boeing 787 program
Delivery of main wings for next-generation transport aircraft
and next-generation fixed-wing patrol aircraft

2005

Dissolution of the alliance with GM, agreement to enter intoa business alliance with Toyota Motor Corporation

2007

Start of production of Toyota cars (Camry) at SIA

2012

Start of knockdown production of the SUBARU XV in Malaysia

2012

Termination of production of mini-vehicles and shift tomarketing on an OEM basis

2014

Signing of an agreement to participate in a project todevelop and mass produce the Boeing 777X

2016

Termination of contract production of the
Toyota Camry at SIA
Transfer of production of Impreza vehicles forNorth America to SIA

2016

All-new Impreza Sport/G4 wins the 2016–2017
Car of the Year Japan award

2017

Change of company name to Subaru Corporation

1946 Production of the firstRabbit Scooter

	Subaru Europe N.V./S.A.

	Subaru of America, Inc.

	Subaru Italia S.p.A.

	North American Subaru, Inc.

	N.V. Subaru Benelux	Subaru Research & Development, Inc.

1953

Establishment of Fuji Heavy Industries Ltd.
Start of aircraft production and automobile development

1960

Opening of the Gunma Main Plant

1960

Listing of shares on the Tokyo Stock Exchange

1966

Signing of a business alliance agreement with
Isuzu Motors Ltd.

1968

Establishment of Subaru of America, Inc. (SOA)

1968

Dissolution of the business alliance with Isuzu Motors Ltd.

1968

Signing of a business alliance agreement with
Nissan Motor Co., Ltd.

Main Plant

Levorg, Impreza, SUBARU XV,WRX, and SUBARU BRZ

1968

Start of exports of Robin engines for snowmobiles
to Polaris (U.S.)

Yajima Plant

Legacy, Outback, Impreza,
SUBARU XV, and Forester

1969

Start of operation of the Yajima Plant

Oizumi Plant

Automobile engines andtransmissions

1972

Release of the Leone 4WD Estate Van, the world’s firstmass-production 4WD passenger vehicle

1978

Conclusion of a 767 business agreement with Boeing

1983

Start of full-scale operation of the Oizumi Plant

2017

Termination of production and sales of Subaru
general-purpose engines and generators

1987

Release of the Justy model equipped with the world’s firstelectro-continuously variable transmission (ECVT)

2018

Introduction of the SUBARU BELL 412EPX helicopter

1987

Establishment of Subaru-Isuzu Automotive, Inc. (SIA) in the U.S.
in a joint venture with Isuzu Motors Ltd.

2019

Agreement on the further developing and strengthening of
Subaru’s long-term partnership with Toyota Motor Corporation
under a new business and capital alliance

1989

Establishment of Subaru Canada, Inc. (SCI)2020

The new Levorg wins the 2020–2021
Car of the Year Japan award

1989

Completion of Subaru Research & Testing Center (SKC)

1990

Subaru of America (SOA) made a wholly owned subsidiary

1991

Participation in the Boeing 777 program	Subaru Vehicle Distribution B.V.
	Subaru of China Ltd.

Subaru Technology Beijing. Co., Ltd.

	Subaru of Indiana Automotive, Inc.
Production Models: Legacy, Outback, Impreza, and Ascent	Subaru Canada, Inc.

Subaru R&E Center (Bifuka)

Main Domestic Business Sites
Automotive Business Unit
Gunma Plant
Plant

Production Models and Parts

Subaru R&E Center (Sano)

Aerospace Company

Aerospace Company

Utsunomiya Plant

Handa Plant
Handa West Plant

Head Ofﬁce

Tokyo Ofﬁce

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Corporate Data

Corporate Data

Corporate Data (As of March 31, 2022)
Company Name SUBARU CORPORATION
Established

July 15, 1953

Paid-In Capital¥153,795 million

Fiscal Year-End

March 31

Accounting
Auditors

KPMG AZSA LLC

Main
Businesses

Automotive:
The manufacture, sale, and repair of passenger cars
and their components

Head OfficeEbisu Subaru Bldg. 1-20-8,
Ebisu, Shibuya-ku, Tokyo, Japan

Number of
Affiliates

94 (86 subsidiaries, 7 affiliated companies,
and 1 other affiliated company)

Number of
Employees

16,961 (consolidated: 36,910)(excluding executive officers, advisors andtransferred employees)

WebsiteAddresses

Corporate website:
https://www.subaru.co.jp/en/
Investor information website:
https://www.subaru.co.jp/en/ir/

Aerospace:
The manufacture, sale, and repair of airplanes,
aerospace-related machinery, and their components

Stock Information (As of March 31, 2022)
Common Stock Authorized

1,500,000,000 shares

Breakdown of Shareholders
Securities companies
31,797 thousand shares
4.13%

Common Stock Issued

769,175,873 shares

Number of Shareholders

147,507

Number of Shares
per Trading Unit

100 shares

Stock Exchange Listing

Tokyo Stock Exchange (Prime Market)

Securities Code

7270

Transfer Agent and AccountManagement Institution ofSpecial Accounts

Mizuho Trust & Banking Co., Ltd.
3–3, Marunouchi 1-chome, Chiyoda–ku,
Tokyo 100–8241, Japan
Tel: 0120-288-324 (toll free)

Individuals andothers93,992 thousand shares
12.22%

Japanese corporations
and others
181,765 thousand shares
23.63%

Treasury stock
1,848 thousand shares
0.24%

Financial
institutions
225,993 thousand shares
29.38%
Foreign institutions
and others
233,778 thousand shares
30.39%

Note: Number of shares held are rounded down to the nearest thousand shares

Major Shareholders
Number of
Shares HeldName

(in thousands)

Percentage
of Total
Shares Held

Toyota Motor Corporation

1 Toyota-Cho, Toyota City, Aichi Prefecture, Japan

153,600

20.02

The Master Trust Bank of Japan, Ltd. (Trust account)

2-11-3 Hamamatsucho, Minato-ku, Tokyo, Japan

112,370

14.64

Custody Bank of Japan, Ltd. (Trust account)

1-8-12 Harumi, Chuo-ku, Tokyo, Japan

37,8444.93

BNYM TREATY DTT 15

240 GREENWICH STREET, NEW YORK,NY 10286 U.S.A.

16,7592.18

MIZUHO SECURITIES ASIA
LIMITED-CLIENT A/C

12TH FLOOR, CHATER HOUSE, 8 CONNAUGHT ROAD,
CENTRAL, HONG KONG

10,165

1.32

STATE STREET BANK WEST CLIENT TREATY 505234

1776 HERITAGE DRIVE, NORTH QUINCY, MA 02171, U.S.A.

10,136

1.32

Mizuho Bank, Ltd.

1-5-5 Otemachi, Chiyoda-ku, Tokyo, Japan

10,078

1.31

JPMorgan Securities Japan Co., Ltd.

2-7-3 Marunouchi, Chiyoda-ku, Tokyo, Japan

8,841

1.15

STATE STREET BANK AND TRUST COMPANY 505103

P.O. BOX 351, BOSTON, MA 02101 U.S.A.

8,651

1.13

Sompo Japan Insurance Inc.

1-26-1 Nishishinjuku, Shinjuku-ku, Tokyo, Japan

8,267

1.08

Note 1: Number of shares held are rounded down to the nearest thousand shares
Note 2: The percentage of total shares held is calculated based on the number of shares excluding treasury stock of 1,848,102 shares

92 Integrated Report 2022

Ebisu Subaru Bldg., 1-20-8, Ebisu, Shibuya-ku,
Tokyo 150-8554, Japan
Phone : +81-3-6447-8000
https://www.subaru.co.jp/en/ir/