Fuji Heavy Industries gives up plans to build cars in China, will boost North America production

Article by Anita Panait, on May 9, 2012

Fuji Heavy Industries Ltd., the parent company of carmaker Subaru, has dropped plans to manufacture vehicles in China after failing to secure the Chinese government’s approval for a joint venture with a domestic car company. Fuji Heavy had applied to create a joint venture with Chery Automobile Co. to build Subaru cars in China.

The joint venture with Chery was part of the company’s five-year plan that aimed to lift global sales by 40 percent to 900,000 vehicles by 2016, driven mainly by a trebling in Chinese sales.

Following the let-down, Fuji Heavy cut its global sales targets for the period by 50,000 vehicles. The company revealed plans to increase its manufacturing capacity in the United States and Japan by a combined 45,000 vehicles per year by mid-2014. The company is also mulling to expand its operations in North America beyond the five-year plan.

After the failure to create a joint venture, Fuji Heavy would now be forced to continue importing cars into China. The Chinese government’s refusal to approve the joint venture could be traced to a stricter rule on allowing foreign carmakers to produce vehicles in the country. Earlier this year, China disabled incentives for foreign investments but remained open to ventures that encourage assembly of advanced vehicles like hybrids and electric cars.

However, the approval process became tighter and China is imposing a 25 percent tariff on imported cars. Yasuyuki Yoshinaga, president of Fuji Heavy, remains optimistic about his company’s future in China, saying that they have not given up on hopes to produce in the country and will wait for any development. Yoshinaga, who will replace Ikuo Mori as Fuji Heavy’s new chief executive in June, also conceded that plans to build cars in China starting 2013 are no longer realistic. [source: Autonews]

Topics: china, subaru, production

If you liked the article, share on:

Comments

Recommended

In September 27, 2016, Porsche initially filed for a patent that is the “Unique Active Rear Diffuser”. And earlier this week, on April 27, 2017, the United States Patent and...
by - April 29, 2017
The Insurance Institute for Highway Safety (IIHS) has given its Top Safety Pick+ award to the redesigned version of the 2017 Kia Cadenza. This was a result of excellent a...
by - April 29, 2017
It’s pretty neat if you possess something of an extraordinary breed like, say, the Pagani Huayra. There are after all just a total of 100 units ever been built by...
by - April 28, 2017
If you’ve ever visited an arcade, chances are you have already seen a Logitech G920 wheel. If that doesn’t ring a bell, it’s the steering wheel that you use when...
by - April 28, 2017
Toyota Motor Corporation disclosed that it will be bringing two of its Mirai fuel cell vehicles to China by October of this year. Tests will then be conducted on these...
by - April 28, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries