Subaru May Hike U.S. Capacity 37%

Subaru maker Fuji Heavy Industries Ltd. plans to invest 20 billion yen ($230 million) to boost annual capacity at its plant in Lafayette, Ind., from 270,000 units now to 370,000 vehicles by the fiscal year beginning in April 2015, The Nikkei reports.

FHI said last month it would decide by March whether to increase its North American capacity to keep pace with soaring demand. Subaru's U.S. sales surged 29% year over year to a record 299,800 vehicles in January-November 2012.

The company considered erecting a new factory in Mexico or the U.S. but decided it would cost less to expand the Indiana facility, according to The Nikkei. It says the Lafayette plant will add capacity for 30,000 Subaru vehicles (to 200,000 units) and 70,000 Camry sedans (to 170,000 units).

The Indiana factory, which makes the Camry and Subaru's Legacy midsize sedan, Outback wagon and Tribeca crossover vehicle, is already operating well above its straight-time capacity. FHI has said the facility produced nearly 278,000 vehicles in 2012.