Subaru marches on in U.S. but more work ahead

Subaru maker Fuji Heavy Industries continues to charge ahead in the key U.S. market with sales seen jumping by a fifth this month, but it faces a lot of work to boost its earnings power, its CEO said on Friday.

Fuji Heavy, owned 16.5 percent by Toyota Motor Corp, has stolen the limelight with the only rise in U.S. sales this year apart from South Korean rivals Hyundai Motor Co and Kia Motors Corp, giving it the same market share as mass-volume brand Volkswagen AG .

Chief Executive Ikuo Mori said he expected the trend to continue, with sales so far in November soaring by 20 percent before adjusting for two fewer selling days against the year before. Official figures are due out next week.

"We've identified the United States as the single-most important market under our medium-term strategy, and we're boosting our share there," Mori told Reuters in an interview.

"Our revenue and profits are still low, however, and conditions are very tough. But my feeling is that things are gradually getting better," Mori said, noting the company's new guidance announced this month to return to an operating profit for the financial year to March 2010.

Subaru's U.S. sales grew 13 percent in the first 10 months as demand for the Forester and Legacy models surpassed expectations, particularly under the cash-for-clunkers scheme this summer. The overall market dropped 26 percent in the same period.