May 2005

Revised FDR-1 plans for the coming 2years

Fuji Heavy Industries, Ltd. (FHI) is pursuing its new mid-term management plan covering the fiscal years ending March 31, 2003 through 2007, entitled the Fuji Dynamic Revolution-1 (FDR-1). In May 2005, FHI set out the revised FDR-1 for the coming two years, FY2006 and FY2007, in consequence of reviewing the past three years actual results and variable factors.

The revised FDR-1 states the management vision, "Small in size, but strong market presence" and "Establish a sustainable business model of high profitability with automobiles as core business". For the coming two years, FHI is working on five strategic goals, "Urgent total cost reduction", "Restructure product planning", "Restructure sales process and network", "Increase asset turnover", and "Leaner corporate structure" to achieve "Reforming for high profitability" as the key issues in the revised FDR-1.

Fuji Dynamic RevolutionPDF/216kB


Consolidated target figures (FY 2007) (in 100 million Yen)
Sales 15,800
Operating income 500
Ordinary income 480
Net income 270
Interest bearing debt 4,000
Estimated exchange ¥/$ rate ¥105/$
Non-consolidated Sales volume target in FY 2007 (in thousand units)
Japan 289
N. America 247
Europe 60
Australia 36
Other 22
Overseas 365
TOTAL: 654

NOTE: Target sales volume consists of FHI's non-consolidated sales and sales volume of KDs and assembling parts.


1. Urgent total cost reduction

  • TStart of Total-Cost Structure Revolution (TSR)
  1. Newly developed automobile model: reduce unit costs -¥100,000 per vehicle and lower tooling & dies costs and development costs -30%.
  2. Vehicles in production: reduce direct material costs by -16% for Japan production and by -13.5% for SIA production in 2 years.

2. Restructure product planning

  • Export the B9 Tribeca from United States
  • Pull ahead the launch of a new mini-car in FY2006
  • Evolution and sharing of the Legacy platform
  • Co-development of a new crossover vehicle for Saab Automobile AB
  • Advanced engineering projects: Horizontally opposed diesel, hybrid, battery for HEV

3. Restructure sales process and network

(1) U.S.
  • Increase total number of dealership (at the end of CY2004: 581at the end of CY 2006: 608)
  • ncrease exclusive and separate showroom dealers (at the end of CY2004: 379/581 65%at the end of CY 2006: 415/608 68%)
  • Increase Subaru "Signature Facility" showroom (at the end of CY2004: 285/581 49%at the end of CY 2006: 385/608 63%)
  • Improve sales unit per outlet (CY 2004: 321 units→CY 2006: 371 units )
  • Reorganize SOA’s regional responsibility (dealer development at the sunbelt market area, strengthen and expansion of dealer sales network)
(2) Japan
  • Improve operational efficiency by consolidating regional block management of dealers and administrative functions
  • Major upgrade in quality of sales and service
(3) Other regions
  • Europe: expansion of Subaru Europe functions, more direct involvement with major distributors for stronger sales promotions, competitive pricing by innovative logistics, and reinforce the sales network by the increase of dealers (974 in FY2005→1,140 in FY2007)
  • Target new areas: Central and Eastern Europe, CIS

4. Increase asset turnover

  • By FYE March 2008, reduce total asset at 10% and interest bearing debt reduction at 20%.
  • Three non-automobile divisions (increase sales and profit, strictly manage capital investment, reevaluate business portfolio)

5. Leaner corporate structure

  1. More efficient and effective human resources management and throughout group companies
  2. External board member to strengthen corporate governance
  3. Tighter internal control / audits