In December 2009, Ikuo Mori, president of Japan’s leading automobile maker Fuji Heavy Industries, the parent company of Subaru, said in Tokyo that the company’s localized production issue in China should be fixed within one year.
However, Subaru of China previously kept emphasizing that it had no plan to produce Subaru-branded products in the country. Things have changed since July 2009 when the Fuji Heavy Industries spokesperson disclosed that the company was considering the construction of a factory in China.
Statistics show that Subaru sold 31,000 cars in China in the first 11 months of 2009, with a year-on-year increase of 86.2 percent. The brand aims to sell 45,000 vehicles and increase the number of its dealers to 130 in 2010.
Fuji Heavy Industries is likely to entrust its shareholder Toyota to arrange the cooperation in order to reduce risks, said insiders. In addition, Subaru may set up a joint manufacturing plant with Chinese automakers. The final decision is expected to be made within a year.
However, a salesman at a 4S dealership selling the brand pointed out that currently, Subarus were sold at a relatively low price as compared to other imported models. Once the localized production begins, some core parts will still be imported and the brand will lose its price advantage as compared to other China-made products. Moreover, if the quality of China-made parts is not up to snuff, the image of the brand will be damaged, the salesman added. It does not seem that the path towards its localization will be short.
Production of Subaru models in China is only a matter of time, and the company is making preparations for the eventual in-country production. The major task at hand is to strengthen the brand image and improve after-sales services, said an executive at Subaru of China. The brand will have to wait for two to three years at least before it starts to manufacture vehicles in China.
