* Aims 20 pct growth in global sales by FY2020/21 to 1.1 mln
* High profitability key for survival of small car makers
* Posts record profit in FY13/14, expects 4.1 pct rise in
By Yoko Kubota
TOKYO, May 9 Subaru maker Fuji Heavy Industries
aims to sustain an operating profit margin of 10
percent or more over the next six years by staying small and
developing niche and profitable cars, its chief executive said.
Japan's smallest car maker likely enjoyed the highest
operating profit margin among its seven domestic peers in the
year ended March, when it booked record profit for the second
year in a row. On Friday, Fuji Heavy projected another record
for the current year on strong demand in the United States.
The maker of four-wheel drive vehicles also said it plans to
boost global sales by 20 percent to 1.1 million vehicles or more
by the year ending in March 2021, yielding a market share of
around 1 percent, Chief Executive Yasuyuki Yoshinaga said.
High profitability is important for small players like Fuji
Heavy to survive in an intensely competitive global auto
industry. The second-tier automaker records only about a 10th of
Toyota Motor Corp's sales volume and profit.
"For a small-scale car maker like Subaru to continue growing
in a sustainable manner, we need to polish our brand and be more
resistant to changes in the external environment," Yoshinaga
said at an earnings briefing on Friday.
To boost brand image, Fuji Heavy will focus on building safe
cars loaded with a high-level anti-crash system, the auto maker
The company will also address its high exposure to currency
movement. Fuji Heavy, which exports around 70 percent of the
vehicles it makes in Japan, has been especially sensitive to
change in the value of the yen.
Over the next six years, Fuji Heavy is likely to more than
double manufacturing capacity at its Indiana plant in the United
States, its biggest market, to 400,000 vehicles a year,
That expansion, by 230,000 vehicles, includes the capacity
of 100,000 vehicles which is currently dedicated to making
Toyota's Camry but will be used by Fuji Heavy from late 2016.
The two companies said on Friday that Toyota will stop
manufacturing the Camry sedan at Fuji Heavy's Indiana plant in
the autumn of 2016 and shift production to Toyota's Kentucky
plant. Toyota owns 16.5 percent of Fuji Heavy.
Globally, Fuji Heavy plans to increase annual manufacturing
capacity over the next six years by 37 percent to 1.07 million
For this financial year to March 2015, Fuji Heavy expects
operating profit to grow 4.1 percent to 340 billion yen ($3.35
billion), backed by strong sales of its Impreza and Forester
crossover SUV in the United States.
That would come after the company nearly tripled operating
profit in the just-ended year to a record 326.5 billion yen,
helped by depreciation of the yen. Its operating profit margin
is likely to fall to 12.5 percent this year from 13.6 percent.
The auto maker said it plans to sell a record 916,000
vehicles this financial year, up 11.0 percent.
Shares of Fuji Heavy closed 0.6 percent lower, compared with
a 0.3 percent gain in the benchmark Nikkei index.
Also on Friday, Suzuki Motor Corp announced record
profit for the year ended March. Its shares closed 1.7 percent
higher ahead of the result.
Japan's fourth-biggest car maker expects a tough business
environment at home where the sales tax rose in April, as well
as in emerging markets including India which is undergoing a
change in government.
Suzuki projects operating profit of 188 billion yen for the
financial year to March 2015, a rise of just 0.1 percent.
($1 = 101.6050 Japanese Yen)
(Reporting by Yoko Kubota; Editing by Christopher Cushing)