The Subaru R-2 was a kei car manufactured by Subaru from 1969 to 1972. The R-2 was a full model change of the popular Subaru 360, but with an updated appearance and increased interior space. The R-2 appeared approximately one year before the Honda Life, Daihatsu Fellow Max and Suzuki Fronte kei cars, however, it continued to use the powertrain setup from the Subaru 360, which was the EK33 air-cooled 2-cylinder engine installed in the back, which is the inspiration for the name of the vehicle. It appeared around the same time as the second generation Mitsubishi Minica.
When the car was introduced February 8, 1969, Subaru took 25,000 orders for the car in one month.
In the early 1970s, the Japanese government enacted legislation to reduce emissions, which prompted Subaru and other manufacturers to upgrade engines that were air-cooled and using a two-stroke engine implementation. On October 7, 1971, the Subaru engine was upgraded to a two-stroke water-cooled engine, called the EK34 series engine, but the retrofit was hastily done, and was better achieved with the new 1972 Subaru Rex, which was available with both 2- and 4-doors. A styling upgrade was accomplished on the water-cooled R-2, adding a faux grille to the front of the vehicle that had no function other than a more modern appearance, as well as a corporate identity to the all new compact Subaru Leone.
Subaru continued with a rear engine platform so as to afford more trunk space up front and provide seating for four passengers, whereas competitors offered front engine front wheel drive vehicles to reduce noise intrusion from the engine and offer rear seats that folded down for increased cargo capacity, albeit with fewer passengers. In response to the rising popularity of front wheel drive front engine alternatives, Subaru offered a hatchback bodystyle February 16, 1970.
Performance versions of the R-2 came April 18, 1970, in the form of the R-2 SS with a dual exhaust and an increase in the compression ratio from 3.8 kg·m (37 N·m; 27 lb·ft)at 6,400 RPM to 7.5 kg·m (74 N·m; 54 lb·ft)at 7,000 RPM, and a higher trim level called the R-2 GL October 5. Another contributor to the early cancellation of the R-2 was its handling characteristics, which were found to be not as stable as vehicles that were front engine, front wheel drive.