US: Subaru waits Toyota’s decision on production plans image

Fuji Heavy Industries automotive subsidiary, Subaru, was the biggest gainer in terms of US market share last year and is now waiting for Toyota to decide on their continued use of the Indiana plant that builds Camry sedans.

As demand for Subaru all wheel drive models last year jumped 26% and this year in the first quarter by a further 21 %, the small automaker with big sales gains is aiming to increase its annual production capabilities – from less than 1 million units globally in 2013.

Because the North American market is the biggest growth driver, naturally, the Japanese automaker is aiming to expand production at its US manufacturing facilities through a $400 million investment at its Indiana plant. According to Chief Executive Officer Yasuyuki Yoshinaga, Subaru’s unit in Lafayette, Indiana is on schedule to increase its capacity to 300,000 vehicles a year by 2016. In the mean time, the other plant – used for the last 7 years to produce Toyota’s Camry models is yet uncertain.

“Whether or not Camry is produced in Indiana, that’s Toyota’s decision,” Yoshinaga said. “An official decision has not been made by Toyota, so we’re just waiting.”

“It hasn’t been finalized that it’s going or timing if it does happen. Those are still under discussion,” says Jim Lentz, Toyota’s North American chief executive. “They’ve got to come to a final agreement here fairly soon.”

The Georgetown, Kentucky, Toyota factory is the main producer for Camry, with an annual capacity of 350,000 units in 2013, while Subaru’s plant comes up with around 100,000 cars.

Via Bloomberg