Fuji Heavy: Need more China sales before building local plant

Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, would need sales in China of over 100,000 vehicles a year before it builds a production plant in the country, a company executive said Monday.

"We would need at least 100,000 vehicles to begin local production" in China, Akira Mabuchi, a corporate senior vice president at Fuji Heavy said in an interview.

The company would also seek to expand its tie-up with Toyota Motor Corp. (7203.TO) in procuring models for some emerging markets, Mabuchi said.

Mabuchi stopped short of predicting when the company's sales in China will hit 100,000 vehicles, saying only that Fuji Heavy is still considering setting up a plant in the world's largest auto market.

The company is targeting China sales of 60,000 vehicles in the current fiscal year through March, which would be a 23% rise from its sales in the last fiscal year ended March.

But that figure is still well below overall sales growth in the Chinese auto market, which expanded by 46% last year. Other Japanese automakers are already scrambling to increase their local production capacities in an effort to keep up with the surge in demand.

Mabuchi said his company would look to increase the number of models that it obtains from Toyota for emerging markets such as India, due to its own limited lineup. Toyota owns a 16% stake in Fuji Heavy.

The executive said their joint operations in development and production are on track as planned.

The two companies agreed in 2008 that Toyota would start providing a small-sized model to its partner by the end of this year, and that they would jointly develop a small sports car by the end of next year.