Fuji Heavy Industries has dropped a plan to transfer output of the new XV Crosstrek to its Lafayette site in Indiana and will instead produce the SUV in Gunma, Japan, a person privy with the matter told Reuters.
The source disclosed that Fuji Heavy decided to make build the Subaru XV Crosstrek in Japan due to capacity limitations in Indiana as well as the relatively high price of the vehicle, which means that a Japan output would be better for the company.
Fuji Heavy had initially intended to produce around 65,000 XV Crosstrek annually in the United States, where it posted a 25-percent jump in sales for a record volume in the first 11 months of 2014.
The decision of Fuji Heavy to build the Crosstrek in Japan mirrors similar decision by its local rivals to transfer some output back home due to the weaker yen, which makes exports more profitable.
Since mid-October, the Japanese yen has seen its value dropped about 11 percent against the US dollar, trading currently above JPY120 per dollar. The source told Reuters that Fuji Heavy intends to start production of the Crosstrek in Japan in April 2017.
The Indiana site is bound to have some free capacity after Toyota Motor Corp. disclosed late last year that it would terminate a deal with Fuji Heavy for making Camry sedans at the plant.
Sources privy with Toyota said the carmaker mulls shifting production of some new Camry sedan from its Kentucky site to Japan. The chief executive of Japanese carmaker Nissan Motor Co., Carlos Ghosn, also recently a plan to shift back production of the Rogue SUV to Japan for export to the US.