Prominence 2020

May 31, 2016

Since announcing the Prominence 2020 mid-term management vision in May 2014, Fuji Heavy Industries Ltd. (FHI) has strived to improve its corporate value through efforts to enhance the Subaru brand and build a strong business structure in the aim of achieving “Not big in size, but a high-quality company with distinctive strengths.” This vision and these efforts remained unaltered, but in response to sales performance in various markets and changes in the business environment, on May 12, 2016, we announced revisions and updates to our consolidated profit plan, consolidated unit sales projections, production plan, and other items. Details are set out below.

Consolidated Unit Sales

Unit sales are projected to expand further in the North American market, which is showing strong results. We expect unit sales to remain at current levels in Japan and China, which continue to face challenging market conditions, and we anticipate an increase in the other markets. Consequently, we have revised our FYE2021 global consolidated unit sales projections upward from 1.1 million-plus vehicles to 1.2 million-plus vehicles.

(1,000 vehicles)

Plan for FYE 2021
North America 800
Japan 150
China 50
Others 200
Total 1,200 plus

Plan to Enhance Production Capacity

Our production plan has been reconsidered in conjunction with the upward revision of sales projections. The previous plan was to have global production capacity (excluding CKD production in Malaysia) of 1,050,000 vehicles under standard operating conditions by FYE2021, but this has been raised to 1,132,000 vehicles under standard operating conditions by FYE2019. (Note: Production capacity under full operating conditions including overtime and weekend/holiday work will be 1,276,000 vehicles.)

(1,000 vehicles)

Plan for FYE 2019
Japan 696
SIA 436
Total 1,132

Three-Year Consolidated Profit Plan (FYE2017–19)

We will continue to implement a highly profitable business model and, even assuming an exchange rate of 100 yen to the US dollar, maintain an operating margin of around 11%, which is among the highest in the industry. At the same time, we will continue to increase investment for sustainable growth, including R&D expenses and capital expenditures.

Plan for FYE2017 – FYE2019
Net Sales 9.8 trillion yen R&D Expense 360 billion yen
Operating Income 1.1 trillion yen Capital Expenditures 470 billion yen
Operating Income Ratio 11.2% Depreciation & Amortization 290 billion yen

Exchange Rate : ¥100/US$

To further accelerate our efforts to enhance the Subaru brand, the following two changes were also announced:

1. Change of company name

The company name will be changed from Fuji Heavy Industries Ltd. to Subaru Corporation. The company name and brand name will thus become one, and all group employees will unite under the Subaru banner to enhance corporate value.

2. Integration of Industrial Products Company with Subaru Automotive Business

To augment development resources in the automotive business and enhance competitiveness, the Industrial Products Company will be integrated with the Subaru automotive business, and management resources including development personnel will be gradually reassigned to the automotive business.

Through further acceleration of these efforts to enhance the Subaru brand, we will achieve even greater growth for Subaru as an attractive global brand in both the automotive and aerospace industries and adhere to our management philosophy of aiming to be “a compelling company with a strong market presence built upon its customer-first principle.” By continuing to offer our customers the distinctive value of “Enjoyment and Peace of Mind” that we have cultivated over many years, we aim to achieve further sustainable growth.