Bloomberg News

Fuji Heavy Targets 6% Sales Gain in 2013; China Sales Rebound

January 15, 2013

Fuji Heavy Industries Ltd. (7270) the maker of Subaru cars, targets a 6 percent increase in global sales, spurred by the introduction of a new Forester SUV model and demand for its Impreza and XV crossover vehicles.

Deliveries will probably rise to 750,000 in 2013 from 706,612 last year, the carmaker said today in a statement. Sales in China, which posted the first rise in four months in December, will climb about 32 percent to 57,500 units.

Fuji Heavy’s December sales in China rose 20 percent, President Yasuyuki Yoshinaga said at a press conference in Tokyo today. The gain is the first that a Japanese carmaker has reported since a flare-up in political tension over disputed islets in the South China Sea led to violent demonstrations in China in September. Toyota Motor Corp. (7203) and Nissan Motor Co. (7201) have also increased discounts and extended guarantees to win back customers.

“We thought we will have to wait until next spring to recover, but it has shown signs that sales recovery may be earlier than we expected,” Yoshinaga said.

Sales of almost 4,860 vehicles were helped by the introduction of the new Forester, Subaru’s biggest seller in China, and discounts on the older version, said Yoshiaki Tabei, a spokesman for the Tokyo-based carmaker.

Toyota’s China sales in December dropped 16 percent to 90,800, bringing annual sales to 840,500 vehicles, 4.9 percent less than in the previous year. Nissan sales dropped 24 percent last month in China, while Honda Motor Co. (7267)’s fell 19 percent.

Lafayette Line

Fuji Heavy will use an existing line at its Lafayette, Indiana, factory to increase output, including production of a new model in 2016,Yoshinaga said. It will announce details at the end of March on the plan to boost production, he said.

Sales in the U.S., its largest market, rose 20 percent in 2012 to a record, led by the Impreza hatchback. A boost in U.S. capacity is key to the company’s mid-term target through March 2016, which includes 380,000 deliveries to the U.S. out of 850,000 shipments worldwide.

The Lafayette plant opened in 1989, initially as a joint venture with truckmaker Isuzu Motors Ltd. (7202) It currently makes Outback wagons, Legacy sedans and Tribeca sport-utility vehicles as well as Camry sedans for Toyota under contract.

The factory can produce a maximum of 310,000 vehicles annually, based on state air-pollution limits, Jennifer McGarvey, a spokeswoman for the factory, said last month.

Shares Doubled

Fuji Heavy gained 0.8 percent to 1,184 yen at the close in Tokyo, compared with a 0.7 percent increase in the Nikkei 225 Stock Average. Fuji Heavy more than doubled last year, the best performer on Japan’s benchmark Nikkei 225 Stock Average, as the automaker’s lack of manufacturing plants in China gives its flexibility to ship more cars to the U.S. and Japan.

Fuji Heavy deliveries in China last year fell 24 percent from a year earlier to 43,459 units. It targets annual sales of 100,000 units a year by March 2016.

The company -- the only major Japanese automaker not to have received approval to manufacture vehicles in China -- plans to eventually have a local production base in the country, Yoshinaga said in an interview last month, without giving a timeframe.

To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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