Bloomberg reported that Fuji Heavy Industries Ltd, the maker of Subaru brand cars is likely to begin production of cars in China in the year starting April 1 2012 to meet demand in the world fastest growing major economy.
Mr Ikuo Mori President of Fuji Heavy said the automaker will target annual sales of 100,000 units in the country where industry wide demand for cars may jump to 20 million units in 2011 from 17 million vehicles this year. He said that an announcement will be made by the end of March later than an earlier plan for the end of this year.
Mr Mori said “The proportion of sales of locally produced cars is rising in China. We are at a disadvantage with taxes and duties boosting prices for imports. He said sales volume of at least 100,000 units is necessary to offset the drop in profit from a 50-50 joint venture with a Chinese carmaker.”
Mr Mori said Fuji Heavy will also announce a new five year mid-term plan in which the company will aim for global sales of as much as 900,000 units by fiscal year 2015 from about 660,000 this year. While the US will remain the company’s most important market, China will be more prominent than in its previous midterm plan.
He said that the company may also beat its JPY 70 billion operating profit forecast this year.
Mr Mori said Fuji Heavy is also considering boosting car output in the US which may be announced in the mid-term plan. Subaru sales in the US have risen 23% to 237,126 units this year through November.
The company expects industry-wide demand for cars in the US to rise to about 13 million units in 2011, from about 12 million this year.
