UPDATE 1-Subaru to raise US capacity by 30 percent - Nikkei

Wed Jan 2, 2013 2:09pm EST

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DETROIT Jan 2 (Reuters) - Japanese carmaker Fuji Heavy Industries Ltd, which owns the Subaru brand, will increase its production capacity in the United States by about 30 percent by fiscal 2016, the Nikkei business daily said.

The company will invest about 20 billion yen ($230 million) in Subaru of Indiana Automotive Inc, its only overseas vehicle assembly plant, the Japanese newspaper reported.

A U.S. spokesman for Subaru declined to confirm the newspaper report.

Fuji Heavy plans to raise its production capacity by 30,000 vehicles by 2014, the paper said.

The Lafayette, Indiana facility can currently produce about 170,000 units a year of Subaru models as well as 100,000 Camry cars for Toyota Motor Corp.

Fuji Heavy sold nearly 330,000 vehicles in the United States last year but had to ship half from Japan. The company's expectation of a jump in North American demand for its Subaru Impreza model prompted the increase in production, the Nikkei said.

The company said in 2011 that it would increase global sales to 1 million vehicles in ten years, the business daily said.

At present, the company's two major production facilities, the Indiana plant and another in the Gunma Prefecture in Japan can produce about 750,000 vehicles a year, the newspaper said.

North America accounts for a little under half of Fuji Heavy's total sales, the Nikkei said.

The company briefly considered building a new factory in Mexico but decided that expanding the U.S facility was the cheaper option, the paper reported.

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