Fuji Heavy Abandons Car Production Plan for China image

Fuji Heavy Industries quit its plans to build cars in China and lowered its sales target for the last year to 50,000 units.

In July last year, the maker of Subaru made a 5-year growth plan until March 2016, planning to boost global sales to 900,000 units up 40%. But the failure to get government approval for a JV with Chinese Chery Automobile Co to build Subaru cars, made the company give up its plan and limit to just importing cars to China.

The Chinese government requires foreign automakers which plan to produce cars for the Chinese market, to find a local company to partner with. But Beijing made the approval process more difficult to favor other joint venture that plan to produce technologically advanced cars such as EVs and hybrid cars. China has a tariff of 25% on imported cars, which makes sales in large volumes really difficult.

“We haven’t given up on local production in China,” said President and Chief Operating Officer Yasuyuki Yoshinaga. “We’ll keep waiting patiently for any progress,” he said.

He added that the company will no longer begin producing cars in China next year and didn’t give a new target for this plan. The company dropped Chinese sales target from 180,000 units to 100,000 units.