Subaru Aims to Save Cost by Expanding US Manufacturing

Subaru Aims to Save Cost by Expanding US Manufacturing

Subaru’s sole overseas vehicle assembly plant in Indiana will expand production capacity 30 percent by 2016.

According to the Nikkei business daily, Subaru’s parent company Fuji Heavy Industries Ltd. is planning the $230 million expansion because the strong yen is cutting into its vehicle profitability. The plan will see the Indiana plant by 30,000 units by 2014.

Currently, the plant builds about 170,000 units for Subaru and 100,000 Toyota Camrys for Toyota every year. In total, Fuji Heavy sold almost 330,000 vehicles, but half of them were shipped from Japan — an increasingly expensive proposition.

SEE ALSO: 2013 Subaru XV Crosstrek Review

That’s true both because of the strong Yen, which makes Japanese manufacturing costlier for export, but also because of an expected increase in North American demand for the Impreza.

Fuji Heavy plans to increase its total global sales to 1 million units over the next decade according to the newspaper. Currently, the company can produce about 750,000 vehicles annually.

Apart from the Impreza, Subaru also started offering its XV Crosstrek this year which sits higher in terms of ground clearance, but uses the same platform.

[Source: Automotive News]

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