UPDATE 1-Subaru plant in Indiana to stop building Camry in 2017
* Subaru exec says Toyota decision a surprise-reports
* Fuji Heavy says plans to increase output of Subaru models at plant
DETROIT/TOKYO, Nov 15 (Reuters) - Fuji Heavy Industries , the makers of Subaru cars, said on Friday it would stop assembling Toyota Motor Corp's Camry at its Indiana plant and use the spare capacity to build its own cars.
Fuji Heavy received notice from its biggest shareholder that it wanted to end annual production of 100,000 Camry models at the plant, which also builds 170,000 Subaru cars a year, a spokesman for Fuji Heavy said.
The end of production for Toyota in Indiana in 2017 was first reported by the Louisville Journal-Courier and local television station WLFI, citing Tom Easterday, executive vice president of Subaru of Indiana.
The plant has has been making the Camry since 2007.
Easterday said the announcement came as a surprise and that the plant had been told in the spring that it would build the next-generation Camry in a pact that has helped Toyota head off rivals in the competitive U.S. midsize sedan market, according to the reports.
Fuji Heavy may use the idle capacity to raise output of Subaru models. The company had earlier announced it planned to raise production to 300,000 vehicles a year at the factory.
Fuji Heavy this year expects sales of the Subaru Forester to jump 25 percent to 420,000 vehicles.
Toyota which holds a 16.5 percent stake in Fuji Heavy, declined to comment, saying the company would not discuss future product plans. Japan's leading carmaker also builds the Camry, the best-selling U.S. car, at its factory in Georgetown, Kentucky.