The automotive industry is a very competitive field due to the fact that the same product is provided by each supplier. Being able to provide a better car or more features with a lower price is the cutting edge which companies in the industry care about. The competition pushes companies to move faster towards releasing their final product to the market to be able to reach customers.
However, this might affect the quality of the product released to the customers which in turn will have a negative effect on the sales of the company. This was observed just lately with Subaru In Japan, where the annual earnings expected has declined significantly due to problems in the quality of the product. This decline has affected the overall incentives and sales values expected in the financial year.
According to the news released by the company, there has been a total of 49% decrease in the operating profit of the company. This financial year ended last March with a total of 33% decrease in the net income throughout the 12 month of the year. Furthermore, a decrease was noticed in the revenue with total of 2.2% decline.
The quality problems associated with the loss in values forced the company in Japan to stop selling their new product and start editing the car to fit the standards of the company and the customers. The problems were a reflection of certain service maintenance issues that were held at the main plant in Japan which had the company to stop the process line.