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UPDATE 1-Fuji Heavy names new president, quake snaps brisk run
May 10, 2011 / 6:11 AM / 6 years ago

UPDATE 1-Fuji Heavy names new president, quake snaps brisk run

(Adds financial results, details)

By Chang-Ran Kim

TOKYO, May 10 (Reuters) - Japan’s Fuji Heavy Industries reported its highest annual operating profit in nine years and appointed a new president to lead the maker of Subaru cars through the next phase of growth once the dust settles from the disastrous earthquake in March.

The smallest of Japan’s eight car makers has been one of the fastest-growing brands in the industry, with a stellar run especially in its key U.S. market.

But the March 11 earthquake and the disruption to the supply chain it caused have snapped its sales momentum, causing a loss of 15,000 units in car sales in the few weeks remaining in the business year that ended on March 31.

“We were in a position where as long as we built the cars, they were selling,” CEO Ikuo Mori told a news conference. “In that sense, the timing is very regrettable.”

Fuji Heavy posted an operating profit of 84.1 billion yen ($1.1 billion) last business year, about three times the 27.4 billion yen booked in 2009/10. An executive said that without the sales loss of 15,000 cars, the profit would have been 6 billion yen higher.

Annual net profit was a record 50.3 billion yen, compared with a loss of 16.45 billion yen a year earlier, as revenue grew 11 percent to 1.58 trillion yen, also a record.

Fuji Heavy refrained from giving a forecast for the new business year, saying its production outlook was still unclear.

Mori said he expected a return to normal production by around November, with parts supply gradually flowing in from the third quarter. Fuji Heavy was mostly building cars using inventory now, and parts may run out around summer, he said.

Mori on Tuesday also named Corporate Executive Vice President Yasuyuki Yoshinaga to succeed him as president pending approval at the annual shareholders meeting on June 24. Mori will become chairman and retain his position as chief executive officer.

Yoshinaga, 57, joined Fuji Heavy in 1977 and was instrumental in turning U.S. sales company Subaru of America into a wholly owned unit in 1990. He is currently head of Subaru’s domestic sales and marketing division.

$1 = 80.275 Japanese Yen Reporting by Chang-Ran Kim; Editing by Edwina Gibbs

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