Report – Subaru to double US capacity and end Camry production image

According to a Nikkei report, Fuji Heavy Industries Ltd plans to double the production capacity of Subaru cars in the United States to cater for growing demand for its Forester SUV, forcing them to end Camry production in their plant.

The 2014 Subaru Forester is experiencing blistering sales in the U.S. and it’s forcing Subaru to make some big changes. Subaru has some big challenges ahead and it will require them to increase production by stopping Camry production at their Indiana plant.

Fuji Heavy’s subsidiary Subaru of Indiana Automotive Inc can make 270,000 cars a year at a manufacturing facility in the U.S. state of Indiana, the business daily said. The factory makes 170,000 Subaru Forester SUVs and another 100,000 Camry midrange sedans annually for Toyota, under a manufacturing contract.

Toyota, who controls 16.5 % of Subaru’s parent company FHI, contracted with them to produce Toyota Camry’s at the Indiana plant, but that may be coming to an end. The report says Fuji Heavy will soon start negotiations with Toyota to stop the production of the Camry and will produce only Subaru vehicles at the Indiana plant so they can meet demand for the new Forester.

As the US accounts for 50 % of Fuji Heavy’s global car sales, the company will plans to pour around 40 billion yen ($407.5 million) to increase the plant’s annual capacity to 370,000 cars by 2016, the newspaper reported. Subaru expects to deliver 400,000 autos globally by the end of 2013.

Via Reuters