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Subaru cancels plans for production in China

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Fuji Heavy said it no longer expects to start building cars in China as part of a five-year growth plan that runs until March 2016, and lowered its global sales target for the final year by 50,000 vehicles.

The maker of Subaru cars had mapped out the plan in July last year, aiming to boost global sales by 40 percent to 900,000 vehicles by March 2016, driven in large part by a tripling in Chinese sales.

Fuji Heavy said on Tuesday that it would continue to import cars into China after an unsuccessful bid to obtain Chinese government approval for a joint venture with local carmaker Chery Automobile Co Ltd to build Subaru cars.

Foreign automakers are required to partner with a Chinese company to produce cars for the local market, and Beijing recently tightened the approval process to favor ventures that plan to make technologically advanced vehicles such as hybrids and electric cars. A Chinese tariff of 25 percent on imported cars makes it difficult to sell in large volumes.

“We haven’t given up on local production in China,” President and Chief Operating Officer Yasuyuki Yoshinaga told a news conference.

“We’ll keep waiting patiently for any progress,” he said, conceding that plans to start building in the world’s biggest car market next year were no longer realistic.

He did not give a new target timeframe for China production.

Yoshinaga will take over as chief executive of Fuji Heavy from June, when Ikuo Mori steps down to become an adviser.

The niche maker of Legacy and other boxer-engine cars now expects to sell 850,000 vehicles in 2015/16, with stronger-than-expected sales in the United States offsetting part of the shortfall in China.

The company now projects Chinese sales at 100,000 vehicles for that year, from an earlier 180,000 target.

Fuji Heavy said it would add capacity at factories in the United States and Japan by a combined 45,000 vehicles per year by mid-2014, and would consider further expansion in North America beyond the mid-term plan.

Via: ChinaDaily.

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5 COMMENTS

  1. Remember Subaru’s Yunque WOW in Guizhou?
    Way back then, it seems like producing what Subaru does best, all wheel drive, would have been a better way to go.

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