June 7, 2002
Fuji Heavy Industries
Restructures its Subaru Market Strategies for Taiwan

�@Fuji Heavy Industries Ltd. (FHI), a global manufacturer of transportation and aerospace-related products and the maker of Subaru automobiles, today announced that it has discontinued car production in Taiwan and will focus only on marketing of imported Subaru vehicles and after sales services for all Subaru owners in that market. This decision is a part of an overall change in strategy for FHI in the Taiwanese market, in view of that country's entry in 2001 into the World Trade Organization (WTO). FHI recently dissolved relations with Ta Ching Motors Co., Ltd., which had been locally producing and marketing Subaru cars. It also canceled a joint venture agreement with Taiwan Vespa Co., Ltd., which held a 55-percent stake in Ta Ching Motors. The remaining 45 percent of Ta Ching's shares were owned by FHI.

�@FHI will soon establish Subaru of Taiwan Co., Ltd. (SOT) and will strengthen the Subaru import business to take advantage of Taiwan's more trade-friendly atmosphere as a new WTO member, as well as providing after sales services for current and future Subaru owners. FHI plans to announce details of the new SOT's operations and sales networks in Taiwan at a later date.

�@Ta Ching Motors has produced and sold the Subaru Impreza for the past several years, and imported the Subaru Forester from Japan since last summer. Due to sluggish automobile sales in Taiwan in recent years, however, sales of Subaru vehicles have declined sharply: in 2001 the car production at Ta Ching fell to 1,713 units, almost one tenth of its peak production levels. With the low levels of local production, FHI's automobile operations in Taiwan found itself in a tough business situation, hovering just below the break-even point. Thus, FHI came to the decision to restructure Taiwan's operations, concentrating its management resources to effectively focus on sales and services in Taiwan, rather than distributing resources in both production and sales operations.



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