Subaru Plans to Expand Capacity in the US Due to Increasing Demand image

The maker of Subaru vehicles, Fuji Heavy Industries, will make an investment of $400 million by 2016 to boost capacity in the US, due to increasing demand especially for the XV crossover and Forester SUV.

Fuji Heavy will increase production at its Lafayette plant, Indiana, to 400,000 vehicles and will also start manufacturing the Impreza model at this facility. The company’s previous target was 300,000 vehicles by 2014. Fuji also plans to add 900 workers at the Lafayette plant as demand has increased in the US, the company’s largest market.

The automaker expects deliveries in the US to increase 8% to 385,000 vehicles during this fiscal year, which accounts for 51% of global deliveries totaling 752,000 vehicles. Net income is seen dropping 8% to 110 billion during the year started April 1st, compared with sales which will most likely increase 7.2% to 2.05 trillion yen. Analysts predicted that revenue and profit will reach 2.08 trillion yen and 116 billion yen respectively.

During the year ended March, Fuji’s net income more than tripled reaching 119.6 billion yen and sales increased 26% to 1.91 trillion yen. Fuji, which is 16% owned by Toyota, has allocated about a third of its US capacity totaling 300,000 units to produce Camry sedans for Toyota.

Source: Bloomberg