The Subaru R2 was announced in Japan on December 8, 2003. It is Subaru's entry in the Japanese keicar market.

The R2 name (no hyphen) was inspired by the Subaru R-2 (has hyphen), the keicar model that was produced between 1969-1972. The R2's exterior reflects influence from Andreas Zapatinas , who worked at Alfa Romeo before moving to Subaru. The R2 is the first production Subaru to sport a new family look, including the aviation-inspired "spread wings grille".

The R2's exterior dimensions are largely similar to its predecessor, the Subaru Pleo, but unlike the squarish Pleo, the R2 is deliberately rounded and does not use every inch of its dimensions for interior space.

Three variations of the 4-cylinder, 658cc engine are available:

• SOHC
• DOHC AVCS (variable valve timing)
• DOHC with supercharger and intercooler

The two lower engines were available with both manual gearbox or an i-CVT Continuously variable transmission. The supercharged engine is coupled to a sportshift version of the i-CVT. Both FWD and AWD are available.

Initially the R2 was available in 11 colors and 3 spec levels (one for each engine variation).

On January 4 2005, the Subaru R1 was introduced. This is a 2-door version of the R2, but with a shorter body and wheelbase.