May 17, 2002
Fuji Heavy Industries Reveals its Five-Year Management Plan,
the Fuji Dynamic Revolution-1

�@Fuji Heavy Industries, Ltd. (FHI), a global manufacturer of transportation and aerospace-related products and the maker of Subaru automobiles, today announced its new mid-term management plan, entitled the Fuji Dynamic Revolution-1 (FDR-1). Covering the fiscal years ending March 31, 2003 through 2007, the FDR-1 consists of FHI's basic management vision, as well as its new policies, product and brand strategies, and specific financial and operational goals.

�@With FHI's principal vision stated as an aim to be a global player with premium brands, the FDR-1 calls for specific targets within that greater goal: develop technology that translates into moving experiences for its users; provide high-value premium products in view of the total value chain; offer the best products, sales, and services within brand categories; and secure a highly profitable corporate structure.
�@In addition, the plan makes clear that FHI will focus on automobile operations as its core business, and it reorganizes the company structure as it functions to change FHI's corporate culture accordingly. As for non-automotive divisions, the company will discontinue certain unprofitable operations, select other promising growth divisions and make them independently operating internal companies, and concentrate its management resources on growth areas.

�@By the end of the fiscal year ending March 31, 2007, FHI plans to increase sales to \1,840 billion, a 35 percent jump from sales in the fiscal year ended March 31, 2002, while it aims to achieve operating income of \110 billion (up 24 percent), net profit of \57 billion (up 88 percent), and worldwide sales volume of 760,000 units (up 37 percent).

�@As FHI's core business, the SUBARU Automotive Business Unit will set up a cross-functioning SUBARU Strategy Development Division for the planning of future growth and innovation. With driving, safety, and environment as the foundations of Subaru's product development strategies, the Automotive Business Unit will enhance its product portfolios with innovative designs, new platforms, and next-generation hybrid power sources. The auto maker will also promote optimal production capability and sales networks in Japan and the U.S. in order to improve FHI's new value chain.


Management goals
Consolidated results
during the fiscal year ending March 31, 2007

(Changes from the fiscal year ended March 31, 2002)
�@ (billion Yen)
Sales 1,840 �i35���j
Operating income 110 �i24���j
Net income 57 �i88���j
Interest-bearing debt 365 �i-8���j
Estimated exchange rate \ 115/$
�@ Sales volume
during the fiscal year ending March 31, 2007

(Changes from the fiscal year ended March 31, 2002)
�@ Japan 350 thousand units (25��)
�@ N. America 280 thousand units (37��)
�@ Europe 60 thousand units (100��)
�@ Other 70 thousand units (67��)
�@ Overseas 410 thousand units (48��)
�@ TOTAL: 760 thousand units (37��)
NOTE:    Target sales volume consists of FHI's nonconsolidated sales and sales volume of KDs and assembling parts.
The main concrete measures for planned realization.
�P�DStructural changes
The holding-company-style management structure focuses on automobile operations (SUBARU) as its core business.
�E Set up a cross-functioning SUBARU Strategy Development Division
�E Internal companies to operate independently and expand their operations
�E Restructure unprofitable operations
�E Strengthen group-wide corporate governance
�Q�DBrand strategies
Changes in products and sales for premium brands.
�E Build portfolios of strategic products.
�E Enhance marketing strategies.
�E Improve quality in sales and service (Create new value chain; Prioritize and execute).
�E Revolutionizing design.
�R�DDevelopment of new core technologies
Apply advanced technology for handling and safety, while still meeting environmental limits.
�E Develop of Next generation new platform
�E Develop of Next generation hybrid power source (include assembly battery development).
�E Developing new design language.
�S�DRevolutionizing production (reduce cost)
Renovate total cost structure
�E Changes in production systems (Now using flexible lines; Integration of mini-car production lines; Renewal of production control systems that link to sales systems).
�E Coordinate strategies with suppliers.
�E Increase joint purchasing and strategic procurement with GM group.
�T�DChanges in corporate culture
Promote changes through keywords in our action guidelines
�E Innovative
�E Individual
�E Courageous
Three companies and others
�E FHI Aerospace Company: establish a globally recognized position in the aerospace industry.
�E FHI Industrial Products Company: Complete "top brand" strategies for professional business users.
�E FHI Eco-Technology Company: create new business for environmentally kinder technologies and products.
�E Buses & Rail trains and special vehicles: we will terminate new model production within the current fiscal year.
�E Prefabricated houses: we will expand prefabricated housing operations and enter the rental housing market.


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