Subaru parent company Fuji Heavy Industries Ltd. is said to be planing an increase in U.S.-based production by investing in its Indiana assembly factory. According to the Nikkei business daily, Subaru has a target of raising production by 30% by the 2016 fiscal year, and will be spending roughly 20 billion yen (approx. $230 million) in Indiana, its only overseas manufacturing plant.
The facility, run by Subaru of Indiana Automotive Inc., is already capable of putting out around 170,000 Subaru models, in addition to 100,000 Camry models for Toyota Motor Corp. Fuji Heavy wants to increase this production by 30,000 cars by 2014. While more than 300,000 cars were sold by Fuji Heavy in the U.S. last year, nearly half had to be shipped from Japan, meaning the strong yen and cost of exporting made severe cuts into profits. A new Subaru plant was briefly considered for Mexico, but in the end it was decided that expansion in Indiana would be more cost-effective.
Nikkei says that the North American market makes up just under half of Fuji Heavy’s global sales, and Subaru is betting on an increase in demand for its Impreza model in the coming years. The diplomatic tensions between China and Japan since September have also wreaked havoc on the Japanese auto industry, creating rapid drops in sales and production. However, Subaru has successfully bypassed the problem by not operating any Chinese factories and keeping most production at its home in Japan’s Gunma Prefecture.
[via Automotive News]
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