Fuji Heavy Struggles to Pace Subaru Demand

Fuji Heavy Industries Ltd. plans to spend some 100 billion yen ($979 million) this year to add badly needed capacity for its popular Subaru cars, The Nikkei reports.

President Yasuyuki Yoshinaga says many Subaru dealers in Japan don't even have cars to display, according to the newspaper. It reports that this year's expansion would hike capacity at Subaru's main factory in Gunma 10% by summer and the Oizumi plant about 20% in the second half of 2014. The company also may expand its Yajima factory, according to the report.

The Nikkei says Yoshinaga's philosophy has been to add annual capacity at a modest 10,000-20,000 units at a time. But now sales are surging well ahead of capacity, thus threatening to limit earnings potential.

Subaru is expected to sell 880,000 cars in the fiscal year beginning April 1. The company has said it aims to achieve annual sales of 1 million units by 2020 but doesn't aspire to surpass that goal.