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Subaru Delays Plan for Factory in China
Fuji Heavy Industries Ltd. is temporarily halting plans to open its first Subaru assembly plant in China, even if the government approves its request to launch the venture with Chery Automobile Co.
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Fuji Heavy Industries Ltd. is temporarily halting plans to open its first Subaru assembly plant in China, even if the government approves its request to launch the venture with Chery Automobile Co.
Bloomberg News notes that Chinese regulators have balked at the Chery alliance because FHI's biggest shareholder is Toyota Motor Co., which already operates two joint ventures in China.
Akira Mabuchi, the FHI executive vice president who heads the Subaru project, tells reporters that slower growth in China's auto market makes the venture less financially appealing. Because profits would be shared with Chery, Subaru would need to sell twice as many locally made cars to equal the profit from simply exporting them from Japan, he explains.
Last year Subaru sold 55,000 vehicles in China, down 2%. Bloomberg News says the company hopes to reach 60,000 deliveries this year.
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