Long before Subaru became associated with all-wheel drive, rally-inspired performance cars, Outbacks, Foresters, and adventure-focused advertising, the company entered the American market with something dramatically different.
It was tiny. It was unconventional. And by American standards, it was seriously underpowered.
The Subaru 360 arrived with an engine producing roughly 25 horsepower, and its small commercial relatives extended the same basic engineering philosophy into van and utility configurations. At a time when American roads were filled with large sedans and powerful V8s, Subaru was attempting to sell vehicles developed around Japan’s compact kei-car philosophy.
The experiment did not become an immediate American success. In fact, the Subaru 360 eventually developed a reputation as one of the more unusual early Japanese imports.
Yet those tiny vehicles helped establish the foundation for a company that would eventually become a major force in the U.S. automotive market.
The history begins not with the Subaru Americans recognize today, but with one of the smallest vehicles imaginable.
Subaru Was Entering a Market Obsessed With Bigger Cars
To understand how unusual Subaru’s early American vehicles appeared, the automotive market of the late 1960s needs context.
American manufacturers were selling large vehicles with engines several times the displacement of Subaru’s tiny two-cylinder powerplant. Muscle cars were becoming cultural icons, and horsepower was an important part of automotive marketing.
Then came Subaru.
The company’s 360 passenger car was approximately 10 feet long and weighed well under 1,000 pounds. Its rear-mounted, two-cylinder, two-stroke engine displaced only 356cc.
The Smithsonian’s National Museum of American History preserves a 1968 Subaru 360 and notes just how dramatically different the car was from mainstream American automobiles of its era.
Its small size was not accidental.
The 360 had originally been developed around Japan’s kei-car regulations, which encouraged manufacturers to build extremely compact and economical vehicles.
Those regulations helped create an entirely different philosophy of transportation.
Instead of asking how much power could be fitted into a car, Japanese manufacturers were learning how much transportation could be extracted from very little space, fuel, and material.
Malcolm Bricklin Saw an Opportunity
Subaru’s arrival in America is closely connected with entrepreneur Malcolm Bricklin.
Before later becoming associated with his own Bricklin sports car and bringing other foreign automotive brands to the United States, Bricklin became involved with importing Subaru vehicles.
Subaru of America was established in 1968, beginning a story that would eventually turn the Japanese company into a familiar presence on American roads. Subaru’s own corporate history traces the brand’s U.S. operations back to that period.
The 360 appeared to offer an unusual opportunity.
Because of its extremely low weight, it could enter the United States under regulatory conditions different from those applied to heavier passenger vehicles at the time.
It could also be marketed on price.
Advertising famously promoted the Subaru 360 as “cheap and ugly,” turning its obvious differences into part of the sales pitch.
The strategy was memorable.
Unfortunately, memorability did not guarantee success.
Twenty-Five Horsepower Was a Different Kind of Driving Experience
Modern drivers have become accustomed to even economy cars producing well over 100 horsepower.
Against that background, 25 horsepower sounds almost impossible.
But the Subaru did not need to move the mass of a modern vehicle. Its extremely low weight allowed the small engine to provide functional urban transportation.
Functional, however, did not mean fast.
Acceleration required patience, highway driving could be demanding, and the vehicle’s tiny dimensions made it feel very different from the cars surrounding it.
That difference was amplified in America.
A vehicle designed for narrow Japanese roads and dense urban environments was suddenly sharing pavement with large American sedans, pickups, and commercial vehicles.
The microvan versions made the contrast even more striking.
They attempted to create usable cargo and passenger space from an extraordinarily small footprint, demonstrating the packaging efficiency that would become a defining characteristic of Japanese kei vehicles.
The philosophy survives today. Japan’s kei category remains regulated around strict dimensional and engine requirements, and organizations such as the Japan Automobile Manufacturers Association provide broader information about the country’s distinctive automotive industry.
Consumer Reports Changed the Story
Subaru’s early American experiment encountered a major problem when the 360 received devastating publicity from Consumer Reports.
The organization evaluated the vehicle and criticized its safety performance, eventually rating it “Not Acceptable.”
For an unfamiliar Japanese manufacturer trying to convince American buyers to trust an unusually small car, that judgment was extremely damaging.
Safety standards were changing rapidly during this period. The United States had established the National Highway Safety Bureau in 1966, which later became the National Highway Traffic Safety Administration. Federal vehicle-safety regulation was becoming increasingly important.
The Subaru 360 had been designed in a very different regulatory and transportation environment.
Its extremely low weight, one of its greatest advantages for efficiency and cost, became a serious disadvantage when evaluated against larger American vehicles.
Sales suffered.
The tiny Subaru that was supposed to introduce Americans to an affordable new form of transportation instead became associated with the difficulties of adapting a foreign-market vehicle to U.S. expectations.
Why Subaru Did Not Simply Disappear
For many new automotive brands, such an introduction could have ended the entire American experiment.
Subaru continued.
That decision ultimately mattered much more than the 360’s commercial performance.
The company gradually introduced vehicles better suited to American driving conditions. It eventually discovered something far more valuable than competing directly with Detroit’s biggest manufacturers: a distinct identity.
Subaru increasingly became associated with four-wheel-drive passenger vehicles.
The Subaru Leone arrived during the 1970s, and its available four-wheel-drive system helped the company appeal to customers living in areas with snow, mountains, unpaved roads, and difficult weather.
That strategy evolved over decades.
Today, vehicles such as the Outback, Forester, and Crosstrek have made all-wheel-drive capability central to Subaru’s American identity. The company’s current vehicle lineup bears almost no visual resemblance to the tiny machines that introduced the brand to the country.
Yet the underlying willingness to be different remains surprisingly familiar.
The Microvan Was More Important Than Its Sales Suggest
Judging an early Subaru only by sales numbers misses its historical importance.
The vehicle represented a first step.
Subaru needed American distribution, dealerships, customers, brand awareness, service infrastructure, and experience operating in an unfamiliar market.
Mistakes provided information.
The company learned that a vehicle successful under Japanese conditions could not automatically be transferred to America without considering highway speeds, safety expectations, consumer preferences, and the size of surrounding vehicles.
Japanese manufacturers more broadly would eventually become enormously influential in the United States. Toyota, Honda, Nissan, Mazda, and Subaru all developed products increasingly tailored to American buyers while retaining engineering philosophies developed in Japan.
The U.S. automotive market itself changed as fuel economy and smaller vehicles became increasingly important, particularly following the energy crises of the 1970s.
The U.S. Department of Energy tracks the long-term evolution of vehicle efficiency, showing how dramatically fuel economy has become part of automotive development.
Subaru had arrived with extreme efficiency before the American market was fully prepared to value it.
From 25 Horsepower to High-Performance Subarus
The contrast with later Subaru vehicles is extraordinary.
The company that entered America with around 25 horsepower would eventually become famous among enthusiasts for turbocharged boxer engines, rally competition, and cars such as the WRX.
Subaru’s motorsport history helped transform the brand’s image internationally, particularly through rallying.
Meanwhile, its mainstream vehicles found a different audience built around practicality, safety, all-wheel drive, and outdoor lifestyles.
Those two identities—performance and practical capability—helped Subaru develop a loyal customer base.
None of that would have been obvious to someone looking at a tiny Subaru microvan during the late 1960s.
Subaru’s Failure Became Part of Its Origin Story
The early Subaru 360 and its tiny utility relatives were not the vehicles that ultimately made Subaru successful in America.
They were the vehicles that allowed Subaru to begin learning how to become successful in America.
That distinction makes them historically important.
The 25-horsepower engine, unusual styling, lightweight construction, and tiny dimensions represented an automotive philosophy almost completely opposite to what dominated U.S. roads at the time.
The experiment stumbled.
But Subaru stayed.
Decades later, the company has become deeply established in the American automotive market, with manufacturing operations in Indiana and a product lineup specifically shaped around U.S. buyers. Subaru of Indiana Automotive now operates a major American manufacturing facility, illustrating how far the company has traveled from its days importing tiny Japanese vehicles.
The little Subaru therefore deserves more than a place on lists of strange vintage cars.
It represents the unlikely beginning of an American automotive success story.
Before the Outback, before the Forester, before the WRX, and before Subaru became synonymous with all-wheel drive, there was a tiny machine with roughly 25 horsepower attempting to convince Americans that smaller could actually be smarter.
It did not win them over immediately.
But it opened the door.
