Wednesday, 23 January 2013 12:04

Subaru to Expand Production in Indiana

Subaru will expand production capacity at its existing assembly plant in Indiana, rather than build a new factory, and will start making a new model there in 2016.

Yasuyuki Yoshinaga, president of Subaru-maker Fuji Heavy Industries Inc., said Subaru expects U.S. sales to climb 9% to 365,000 units in 2013.

“We'll be selling 1,000 cars every day,” he said. Global sales will rise 6% to 750,000.

Yoshinaga said he will release details of the capacity-expansion plan by March 31.

The company is considering several ways to boost output at its Lafayette, IN, factory, its only overseas assembly plant.

It could add a line to the two already there, extend the line that is currently dedicated to Subaru or possibly glean capacity from the second line, which makes Camry sedans for Toyota Motor Corp.

“We are considering many options,” said Jun Kondo, Fuji Heavy’s deputy president and global manufacturing chief. “It was decided expanding the current plant was better than building a new one.”

Subaru declined to identify the new model to be made there, but it might likely be the Impreza, the Impreza-based XV entry-level car or the Forester crossover. Those vehicles are all imported from Japan now.

The Impreza is the brand’s No. 2 selling vehicle in the United States, after the Outback wagon. Impreza sales roughly doubled to 81,799 units in 2012 after the introduction of redesigned version. The Forester ranked third, with sales of 76,347 last year, unchanged from 2011.

The decision comes as Subaru seeks ways to boost North American output to meet booming demand for its cars there after a fourth year of record sales.

Yoshinaga told Automotive News in November that his company could sell 400,000 units in the U.S. as early as 2016, up from a record 336,441 in 2012. Subaru's 2012 U.S. sales rose 26%, well above the industrywide gain of 13%.

Yoshinaga did not give a target capacity for Indiana. But in November, he said Subaru would likely need a further expansion to between 250,000 and 300,000 units a year.       

Last May, Subaru said it would boost capacity at its Indiana plant to 200,000 by mid-2014.