Subaru gains amidst anti-Japanese tensionsPOSTED BY admin ON 21 November 2012
Bloomberg has reported that Fuji Heavy Industries (FHI), makers of Subaru cars, has recorded the biggest gain on Japan’s Nikkei 225 Stock Average, with an 83 per cent gain in Tokyo trading this year due to the recent flare up of anti-Japanese protest in China.
A recent territorial dispute between the Diayou/Sensaku islands provoked anti-Japanese sentiments in China, which seriously hurt Japanese owned businesses in China.
As a result of slumping sales of Japanese branded cars in China, other Japanese car makers has idled their factories in China, with researchers in Toyota stating that production of Japanese cars in China wouldn’t be fully resumed before July next year.
Fortunately for Subaru, which is the only Japanese automotive brand in China to not have a manufacturing plant in China, their plans for forging a partnership with Chery Automobile and establishing a plant in China were halted by Chinese officials.
China does not recognise FHI as being independent from Toyota, as Toyota is the largest shareholder of FHI with a 16.5 per cent stake.
Seeing that Toyota has already established two partnerships with the FAW Group and the Guangzhou Automobile Group, China believes a third partnership with the Japanese giant would “exceed regulatory limits”.
Thanks to higher sales figures in the American and Japanese markets, Subaru has been able to increase its full-year profit forecast by 40 per cent, whilst fellow Japanese auto makers like Honda and Nissan slash theirs by a fifth.
Though FHI manages to steer mostly clear of the effects of the anti-Japanese protests, their sales figures in China, its third largest market next to America and Japan, has slowed.
Last year Subaru sold 57,198 cars as tiny increase over 2010’s sales figures of 57,138, and miniscule considering that Nissan with their joint venture with Dongfeng managed to shift 1.25 million units in China last year.
Mitsuru Takahashi, FHI’s chief financial officer isn’t taking this good fortune for granted, saying “We just happened to be lucky. We are not carried away and we are not assuming the conditions will be favourable forever.”
With the hurdles in getting their partnership with Chery approved, FHI lowered their projection for annual delivers in China by 44 per cent to 100,000 units for the year ending March 2016, as well as lowering its global sales target by 50,000 to 850,000 units.
That said FHI’s president Yasuyuki Yoshinaga hasn’t abandoned plans in China stating that the country’s potential is too big to ignore.
Source: Automotive News