Fuji Heavy Ind.: introduces new Impreza in 2011, Compact Sports Car in 2012

Strengthens operations in China and other emerging markets for the next mid-term business plan

2011/07/21

Summary

 Despite the impact of the Great East Japan Earthquake of March 11, Fuji Heavy Industries' (FHI's) financial results for FY2010 registered the highest records ever in the consolidated vehicle sales (657,000 units), net sales (1,580.5 billion yen), and current net profit (50.3 billion yen).

 The record-high results owe to, among others, the strong sales in the U.S. market, defined as the most important market in the company's 2007-2010 mid-term business plan, where 279,000 vehicles were sold including the larger-sized Legacy, Forester and Impreza. The operating income was above the 80 billion yen mark targeted for FY2010 in the mid-term plan.

 FHI plans to start a new mid-term plan beginning with FY2011, and will publish the plan as soon as its outlook for FY2011 becomes firm. FHI reportedly will continue product development from a global perspective while, at the same time, the company will promote further sales in emerging markets to reach a global sales target of 800,000 units in FY2015. To achieve that goal, FHI is currently considering increasing its production capacity in Japan or the U.S. and studying the feasibility of joint production with Chery Automobile in China.

 In terms of the impact of the great earthquake, FHI's plant operation rate which was about 60-70% in June will rise to 80% after July and normal production will start in October, one month earlier than originally planned (announced in June 14).

 Regarding new product planning, FHI developed its next-generation 2000cc/2500cc naturally-aspirated boxer engines (horizontally-opposed engines) in 2010. The new engines are currently used on the Forester that was partially remodeled in October. FHI will launch the new Impreza in the second half of 2011. Regarding mini-car production, FHI ended mini-car production at its Gunma Main Plant in April 2011 and switched to OEM procurement of mini-cars from Daihatsu. FHI is still making mini-sized commercial vehicles, Sambar, but will end that production in early 2012 to start production of compact RWD sports car jointly developed with Toyota.



Consolidated vehicle sales for FY2010 mark a record high at 657,000 units

 FHI's consolidated vehicle sales in FY2010 marked a record high of 657,000 units reflecting strong sales in overseas markets especially in the U.S. (279,000 units) and China (62,000 units). A significant increase in sales was seen also in Canada (28,000 units) and Australia (41,000 units).

 Sales in Japan are declining in both the passenger cars and mini-car categories worsened by the discontinuation of the eco-car subsidies during the second half of the fiscal year. As a result, FHI's sales in Japan remained low at 158,000 units failing to reach the previous year's result for six years in a row.

 Production in Japan was 459,000 units, nearly the same as in the previous year, with an increase in exports of completely built-up vehicles making up for the decrease in mini-car production. Production in the U.S. increased over 1.5 times to 165,000 units and the total production worldwide was 624,000 units (excluding commissioned production of the Toyota Camry at SIA in the U.S.).

FHI's consolidated sales

(vehicles)
    FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Japan Passenger cars
Mini-cars
97,700
132,500
81,200
145,600
78,100
130,600
70,100
108,700
75,100
96,200
68,100
90,000
Total 230,200 226,800 208,700 178,800 171,300 158,100
Overseas U.S.
Canada
193,600
16,400
190,300
16,200
192,800
17,600
188,200
18,900
227,000
22,800
279,000
28,100
Russia
Europe
64,700 71,400 22,600
63,400
20,700
56,800
1,600
37,300
11,300
48,200
Australia 36,500 38,100 40,200 36,700 35,000 41,200
China
Other
30,000 35,100 12,600
38,800
26,200
29,100
48,900
18,900
62,400
28,700
Total 341,200 351,100 388,000 376,500 391,600 498,900
Consolidated sales 571,400 577,900 596,700 555,300 562,800 657,000
FHI's production units
(vehicles)
    FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Japan Passenger cars
Mini-cars
330,755
135,974
326,372
157,891
356,837
132,833
362,395
111,571
356,734
96,012
381,783
77,005
Total 466,729 484,263 489,670 473,966 452,746 458,788
Overseas production
Global production
121,505
588,234
103,415
587,678
110,979
600,649
83,239
557,205
104,346
557,092
164,773
623,561
Export from Japan
Export/production in Japan
224,723
48.1%
239,722
49.5%
273,703
55.9%
299,186
63.1%
279,398
61.7%
329,912
71.9%

Source: FHI's FY2010 Financial results, press release 2011.4.25
(Note) Production in Japan as reported to Japan Automobile Manufacturers Association (JAMA); overseas production on line-off basis excluding commissioned production of Toyota Camry at SIA in the U.S.

 



Financial results for FY2010: Record-high net sales of 1,580.5 billion yen with operating income of 84.1 billion yen

 The FY2010 ended with the record-high consolidated net sales of 1,580.5 billion yen and also record-high overseas net sales of 1,113.2 billion yen with North America accounting for 65% at 725.8 billion yen.

 FHI's operating income increased 3.1 times from the previous year to 84.1 billion yen. The company's current net income/loss rose from deficits of 69.9 billion yen and 16.4 billion yen in FY2008 and FY2009, respectively,  to the current net income of 50.3 billion yen.

FHI's consolidated financial results

(in millions of yen)
  FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Sales in Japan
Overseas sales
604,100
872,200
576,200
918,600
544,000
1,028,400
507,500
938,300
520,800
907,900
467,300
1,113,200
Net sales
thereof Automobiles
1,476,368
1,329,200
1,494,817
1,339,300
1,572,346
1,421,200
1,445,790
1,316,305
1,428,690
1,294,451
1,580,563
1,452,207
Operating income
Ordinary income
Net income/loss
58,339
46,768
15,611
47,906
42,215
31,899
45,680
45,437
18,481
(5,803)
(4,600)
(69,933)
27,350
22,361
(16,450)
84,135
82,225
50,326
Capital expenditures
Depreciation
R&D expenses
56,200
57,500
46,900
59,600
58,900
50,700
56,300
35,500
52,000
58,000
65,100
42,800
56,100
57,100
37,200
43,100
49,800
42,900
Exchange rate YEN/US$ 112 117 116 102 93 86
Source: FHI's FY2010 Financial results 2011.5.10
(Notes) 1. The contributing factors to the increase in the operating income (56.8 billion yen) for FY2010 included the improvement of sales volume and mixture (83.1 billion yen), cost reduction (8.9 billion yen), decrease in expenses (6.1 billion yen), and loss on exchange rates (minus 35.6 billion yen).
2-1. The influence of Great East Japan Earthquake was accounted for by an extraordinary loss of 7.4 billion yen including the fixed cost for the period during which production was suspended. A new extraordinary loss is not anticipated for FY2011.
2-2. FY2010 ended with sales loss of approximately 15,000 units having an impact of 30 billion yen in net sales and approximately 6 billion yen in operating income. The decrease in production and sales is expected to have a certain influence on the company's operating income for FY2011.
3. Investment in equipment was minimal in FY2010 as there was no major remodeling among leading models. The company is set to increase investments in equipment, such as the new engines and CVT, from FY2011 for continued growth.
Breakdown of overseas sales by market
(in millions of yen)
  FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
North America
Europe
616,437
128,777
622,149
152,458
667,310
181,333
582,979
168,520
622,126
84,474
725,800
126,300
Asia
Other
127,016 143,994 179,716 186,777 101,470
99,784
138,900
122,300
Overseas sales 872,230 918,601 1,028,359 938,276 907,854 1,113,200

 



New-generation boxer engine with 10% better fuel efficiency now used on the new Forester

 In September 2010, FHI announced an outline of the newly-developed new-generation 2000cc/2500cc naturally-aspirated boxer (horizontally-opposed) engines. This marks the first total renovation in 21 years since the second-generation boxer engine was introduced in the first-generation Legacy in 1989.

 The new engine is characterized by a longer stroke and other structural changes addressing higher efficiencies in basic performances which resulted in 10% improvement in fuel economy and 20% cost reduction. The new engine is used in the partially redesigned Forester series vehicles that were released in October.

 As part of the next mid-term business plan, FHI reportedly plans to develop a new platform, 50 to 100kg lighter than the current one, and equip it with the new boxer engine and CVT to meet the increasingly strict fuel economy regulations in advanced countries.

Newly-developed boxer engine reduces fuel consumption by 10%

 The newly-developed boxer engine represents a total renewal starting with the basic structure while maintaining the advantages of the horizontally-opposed piston layout such as lightweight and compact design, low center of gravity and excellent oscillation balance. The resulting improvements of the new-generation engine include advances in both environmental friendliness such as an approximately 10% higher fuel efficiency, and driving performance for smooth acceleration in all speed ranges, without affecting each other. In addition, the manufacturing costs have been reduced by approximately 20%.
 The new engine has a longer stroke and a more compact combustion chamber which were difficult previously due to chassis mounting conditions in boxer engines. This allows high combustion efficiency and realizes a sufficient low to medium speed torque with improved practicality. The engine has AVCS (Active Valve Control System, FHI's trade name for a variable valve timing mechanism on Subaru vehicles) on both the intake and exhaust valves.
 FHI spent four years from 2007 to develop the new boxer engine and invested approximately 17 billion yen to build a new engine production line with the monthly capacity of 14,000 units at Gunma Oizumi Plant. Production of the new engine began in September 2010. FHI will export the engine's modular parts to the United States for local assembly.

Source: FHI's press release 2010.9.23

New boxer engine vs. old
  New-generation boxer engine Previous boxer engine
Engine type Horizontally-opposed 4-cylinder DOHC engine Horizontally-opposed 4-cylinder DOHC engine
Displacement 1995cc 1994cc
Compression ratio 10.5 10.2
Bore/stroke 84mm/90mm 92mm/75mm
Max. power 109kW 109kW
Max. torque 196Nm 191Nm

(Note) Major changes in the 2000cc naturally-aspirated engines for Japanese market

 

Carbon fiber-reinforced composite material co-developed with Toray

 FHI used carbon fiber-reinforced composite material in the WRX STI tS, 400 units of which were produced in limited production and sales between December 2010 and March 2011.

Carbon roof co-developed with Toray and used in limited production of 400 units of WRX STI tS

 FHI jointly with Toray developed an automotive roof made of carbon fiber-reinforced composite material. The roof dubbed "Carbon Roof" was used in the limited production of 400 units of the Subaru Impreza WRX STI tS in December 2010 through March 2011. The use of the lightweight roof made of carbon fiber-reinforced composite material is most effective in lowering the center of gravity and is expected to help improve driving performances including more agile steering in addition to reducing the overall vehicle weight.
 The carbon fiber-reinforced composite material is extremely light, weighing only about 20% of the common steel materials, while having the same tensile strength as the steel counterparts. However, its use in automotive bodies is limited to F1 and other racing cars and a small fraction of vehicles because of the high material costs and precise technologies and know-how required in designing the joints between components made from different materials.
 FHI's Aerospace Company has been engaged in the development and manufacture of various aircrafts. Today, as a partner company in the development of the Boeing 787 that uses a massive amount of carbon fiber-reinforced composite materials in the main structure, FHI is responsible for the development and manufacture of the central wing that joins the wings and the fuselage.

Source: FHI's press releases 2010.12.3/2010.12.21

 

58% of the Legacy customers choose models protected by EyeSight

 Fuji Heavy Industries (FHI) announced that 58% of its customers that purchased the Legacy in Japan during the period from May 2010 through March 2011 chose models protected by the "EyeSight" driving assist system. The high ratio of use is reportedly due to the price of the system that was reduced in half to 105,000 yen from the previous one.

 FHI reportedly plans to make the EyeSight system available on all models by 2013 starting with those sold in Japan.

EyeSight system chosen by 58% of those that purchased the Legacy series cars

 In May 2010, FHI launched the Legacy series models with the available "EyeSight" driving assist system. The EyeSight system uses its unique stereo cameras (1) to activate the automatic brakes before a collision, avoid collision if the differential speed with the opposing obstacle is 30km/h or lower, or decelerate to minimize the damage if the differential speed is over 30km/h, and (2) the system also has an adaptive cruise control in all speeds that stops the vehicle if the vehicle ahead in traffic stops. The additional price of the EyeSight-equipped models has been minimized to 105,000 yen above the basic models.
 In March 2011, FHI announced that the number of Legacy cars sold with the EyeSight feature reached 10,000 units. This accounts for 57.9% of the Legacy cars sold in Japan during the same period, significantly higher than the sales goal set at 30%. When asked their intention for the next car purchase, 90% of those customers that bought Legacy with the EyeSight system said they would buy models with the same feature, according to FHI.

Source: FHI's press releases 2010.5.18/2011.3.4

 



New body types developed in a shorter remodeling cycle

 FHI has been developing and producing both passenger cars and mini-cars with the standard remodeling cycle of seven to eight years per model. By having its mini-cars developed and manufactured by Daihatsu, FHI will shorten the remodeling cycle for its passenger cars to four to five years and introduce new body types as well.

 During the fiscal 2010, FHI launched Lucra and Preo in April, both mini-cars supplied by Daihatsu.

 In June, FHI completed partial remodeling of the Impreza and released "XV" crossover version. In October, the Forester was partially remodeled and the new-generation boxer engine was used for the first time.

 In November, FHI received OEM supplies of Toyota Ractis and sold them under its model name of Subaru Trezia. According to FHI, the Trezia falls between mini-cars and passenger cars and helps to complete the company's product lineup.

 In May 2011, FHI launched the new Stella by OEM procurement from Daihatsu. This marked the completion of OEM procurement of FHI's mini-cars from Daihatsu and the end of mini-car production at the Gunma Main Plant.

New model launches in June 2010 to May 2011

June
2010
Partial remodeling
of Impreza and
XV launch
 Other than partial remodeling of the Impreza, a crossover version called XV (X for Crossover, V for Vehicle) was added to the availability list of the five-door hatchback family. The XV is powered by a 2000cc engine and four-speed AT with a manual mode.
 The XV was launched in Chinese markets in the summer of 2010, reportedly with the aim of propping up the sales of the Impreza having hard times in China.
July Partial remodeling
of WRX STI and
addition of
four-door models
 The Impreza's high-end series, WRX STI, was partially remodeled and a four-door sedan was made available in addition to the conventional five-door hatchback.
 The four-door models were introduced in the Chinese markets in the fall of 2010.
October-
December
Partial remodeling
of Forester with
available S-EDITION
 In October 2010, FHI released partially remodeled Forester series cars. The Forester is powered by a new-generation 2000cc naturally-aspirated engine and four-speed AT or five-speed MT. It also represents the further evolution of chassis performances resulting in improved steering stability and riding comfort, as well as quality impression of exterior and interior components.
 "S-EDITION" was made available in the home market, powered by a dedicated 2500cc turbocharged engine and E-5AT with manual mode, intended to give the highest dynamic performance and the ease of use in daily driving.
US launches  The remodeled Forester powered by the new-generation 2500cc engine was released also in the United States at about the same time. FHI sold 85,000 units of the Forester in the U.S. market in 2010, making it one of the leading models along with the Legacy and Outback.
China  In December, FHI introduced models powered by the new-generation 2000cc/2500cc engine in the Chinese market. The Forester, accounting for nearly 60% of FHI's sales in China, is a leading model for the company. The conventional versions powered by 2500cc turbocharged engine are also sold in China.
November Trezia compact car  FHI received OEM supplies of Toyota Ractis and launched them as Subaru Trezia. FHI had its developing staff working with Toyota personnel from early stages of the Ractis development. As a result, Trezia is designed as a touring compact car with Subaru's wagon taste. It has a compact body with 3990mm overall length but has an effective cabin length of 2690mm.
 The Trezia is powered by a 1300cc/1500cc engine and the CVT is used on all models. The sales price ranges from 1,428,000 to 1,979,000 yen including tax.
 FHI used to receive OEM supplies of Daihatsu Boon and sell them as Subaru Justy in Europe. This has been replaced by the Trezia starting in 2011.

(Note) FHI has been selling OEM-supplied Daihatsu Coo as Subaru Dex in the Japanese market since November 2008.

May 2011 Stella  The Stella mini-car, fully remodeled for the first time in five years, features roominess, ease of handling and superior fuel efficiency and is an OEM supply of Daihatsu Move.
 Powered by an inline 3-cylinder naturally-aspirated engine and equipped with an electronically controlled throttle system and the new CVT. The model with a start-stop system has achieved a fuel efficiency of 27.0km/L (10・15 mode), highest among the gasoline-fueled vehicles.
Source: FHI's press releases 2010.6.24/2010.7.1/2010.10.25/2010.11.29/2011.5.24
(Notes) 1. In December 2010, Daihatsu launched the new Move powered by the newly-developed "second-generation KF engine" and equipped with the newly-developed "eco IDLE" start-stop system, both marking the first use on vehicles. The car represents additional measures addressing higher fuel efficiency, such as approximately 35kg reduction of the body weight. As a result, the X, X Limited and Custom G models (2WD) have achieved a fuel efficiency of 27.0km/L (10-15 mode) , highest among gasoline-fueled vehicles.
2. In September 2011, Daihatsu will launch a mini-car having a JC08 mode fuel efficiency of 30km/L in Japan.
3. The procurement of the new Stella from Daihatsu marks the end of FHI's production of mini-cars. The Sambar (mini-sized commercial vehicle) has become the only mini-vehicle being produced ongoingly at the company's Gunma Main Plant. The Sambar production, too, will be discontinued in February 2012 and the Gunma Main Plant will then start producing the compact RWD sports cars co-developed by Toyota.


 FHI's future plans include the release of the new Impreza in Japan and the United States in the second half of 2011, and the production of the compact RWD sports car, co-developed by Toyota, at the Gunma Main Plant starting in 2012.

 Plans also include the release of hybrid vehicles in Japan and the United States in 2012. Improving fuel efficiencies of its gasoline-fueled vehicles is the top priority in FHI's next mid-term business plan, but the company reportedly is determined to accelerate the development of electric vehicles allowing for the increasingly strict fuel efficiency regulations in advanced countries.

New model plans starting in the second half of 2011

Second
half of
2011
New Impreza  FHI exhibited the new Impreza at Los Angeles Auto Show (November 2010) and at New York International Auto Show (April 2011). The fourth-generation Impreza is the result of the first full remodeling in four years.
 The four-door model has been styled as a four-door coupe to emphasize its sportiness. FHI also developed a five-door hatchback. Both are powered by the new-generation 2000cc boxer engine, the production of which started in 2010, and the Lineartronic CVT, and will be released in Japan in the second half of 2011.
 The new Impreza will be released in the U.S. market as well in 2011. The U.S. model achieves highway fuel efficiency of 36 mpg, higher than other all-wheel-drive passenger cars in the United States, accounting for a 35% improvement over the existing model.
To-be-
announced
Subaru XV Concept  FHI unveiled the "SUBARU XV CONCEPT" in a world premiere at the Auto Shanghai 2011 defining the design concept of its new-generation crossover vehicles. According to FHI, the new design blends the powerful form with a fashionable image. The crossover is powered by the new-generation 2000cc boxer engine and Lineartronic CVT and has an overall length of 4450mm and width of 1800mm.
 FHI is studying the feasibility of launching the crossover in the U.S. market if the size is right for the local market. If it is released there, it will rival with the Toyota RAV4 and the Honda CR-V.
Spring
2012
Compact RWD sports car  The compact RWD sports car development is a project that started when Toyota executed additional investment in FHI in 2008. The original plan was to build a new plant but it was abandoned due to the Lehman Brothers crisis and the production site was changed to the Gunma Main Plant.
 FHI unveiled the "BOXER Sports Car Architecture" in a world premiere at the Geneva International Motor Show in March 2011. Powered by the boxer engine (horizontally-opposed engine), the sports car is characterized among others by the RWD layout, low center of gravity, lightweight and compact body, and a short wheelbase. The engine is located near the car's center to ensure stable cornering.
 The production model, which is to be exhibited at 2011 Tokyo Motor Show, will be released for marketing in Japan by the spring of 2012. Priced between two and three million yen, the car is defined as a sports car for all and may be used for commuting (Subaru's flagship sports car, Impreza WRX STI, is priced at 3.15 million yen and up including tax).
 The car will be released in the U.S. market as well in 2012. It is said that the U.S. will be the main arena for Subaru's sports car sales. The sports car will also be released in European markets.
For Toyota  Toyota exhibited the "FR-S Concept" at the New York International Auto Show in April 2011. Toyota announced that direct injection and port injection technologies from D-4S (Direct injection 4 stroke gasoline engine Superior version) are to be adopted in the vehicle's Subaru horizontally opposed engine to create higher output and even better environmental performance. The sports car will be sold under the Scion brand meant for young people. The cars will be manufactured by FHI for Toyota.
Electric vehicle plans
2012 Hybrids  FHI will adopt Toyota's hybrid technology, make necessary changes for its horizontally-opposed engines, and put them on its leading model, Legacy. The Legacy hybrid will be released first in Japan and eventually exported to the largest market, the United States, to boost sales especially in the southern states and California where people are highly concerned about the environment. The hybrid cars will be manufactured at the Gunma Main Plant.
To-be-
announced
Plug-in hybrids  FHI is developing a PHEV based on the hybrid system planned for market launch in 2012. It is said, therefore, special considerations are being made in developing the hybrid system with PHEV in mind that requires more batteries.
EV  Production and sales of the Stella EV ended when the production of the Stella ended in 2011. It is said FHI plans to continue EV development based on compact cars.

Source: FHI's press releases 2011.3.1/2011.4.19/2011.4.21, Toyota's press release 2011.4.21

 



Sales in the U.S. market rise to 264,000 cars in 2010 with new share of 2.3%

 FHI enjoyed brisk sales in North American markets in 2010 especially from the Forester remodeled in 2008 and the Legacy/Outback introduced in 2009, both to meet local tastes. FHI's sales increased even in 2009 when the local light vehicle market shrank to 10.4 million units (from 13.19 million units in 2008). As a result, FHI's share rose from 1.4% in 2008 to 2.1% in 2009. The company's sales in the United States rose to 263,820 units in 2010, up 21.7% from the previous year, to an all-high record share of 2.3%. Subaru production at SIA increased significantly from 82,953 units in 2009 to 158,020 units, which contributed to FHI's financial results for FY2010.

 FHI expects the vehicle sales will grow automatically, once its production capacity builds up and it keeps its share, in pace with the recovery of the U.S. market.

FHI's sales in U.S. and Canada

(vehicles)
  2006 2007 2008 2009 2010 Jan.-May
2010
Jan.-May
2011
U.S. Legacy
Impreza
Passenger cars
84,442
41,148
125,590
78,428
46,333
124,761
66,876
49,098
115,974
30,974
46,611
77,585
38,725
44,395
83,120
15,987
17,315
33,302
17,813
18,347
36,160
Outback
Baja
Forester
Tribeca
Trucks
 
5,241
51,258
18,614
75,113
 
1,127
44,530
16,790
62,447
 
2
60,748
10,975
71,725
55,356
 
77,781
5,930
139,067
93,148
 
85,080
2,472
180,700
34,593
 
35,328
1,136
71,057
43,325
 
31,676
1,094
76,095
Total
Market share
200,703
1.2%
187,208
1.2%
187,699
1.4%
216,652
2.1%
263,820
2.3%
104,359
2.3%
112,255
2.1%
Canada Passenger cars
Trucks
11,500
4,690
11,399
4,105
12,644
7,248
11,296
11,738
15,878
11,927
-
-
-
-
Total 16,190 15,504 19,892 23,034 27,805 11,032 11,694
U.S. and Canada Total 216,893 202,712 207,591 239,686 291,625 115,391 123,949
Source: Ward's Automotive Year book, Reports 2011.1.31
(Notes) 1. After the "2010 Subaru Legacy" series (fifth-generation Legacy) were released in 2009, Ward's classifies the Outback, an SUV in Subaru's Legacy series, under the "light truck" category.
2. The Subaru Tribeca is no longer on FHI's development plan and is destined to discontinued production and sales due to the poor sales performance of the current model.
3. Data for May in the Jan.-May 2011 period for Canada are provisional and the breakdown under passenger cars and trucks are unavailable at this time.

 

Production at Subaru of Indiana Automotive

(vehicles)
  2005 2006 2007 2008 2009 2010 Jan.-Apr.
2010
Jan.-Apr.
2011
Subaru vehicles
Toyota Camry
118,991
 
110,368
 
109,177
37,972
91,597
91,671
82,953
87,926
158,020
87,731
50,584
29,981
53,047
28,923
Total 118,991 110,368 147,149 183,268 170,879 245,751 80,565 81,970

Source: Ward's Automotive Year book, Reports 2011.1.17/2011.5.16

 



A greater emphasis on China and other emerging markets characterizes the upcoming mid-term business plan

 FHI is about to announce a mid-term business plan for the period starting FY2011 which is likely to contain measures addressing emerging markets.

 FHI sold 62,000 vehicles in China in FY2010. FHI regards China as an important market and is reportedly discussing local production in the city of Dalian jointly with a Chinese automaker, Chery Automobile. FHI's immediate problem is to increase its sales network of about a hundred dealerships as of early 2011.

 FHI has similar business expansion plans for Russia and ASEAN member countries after China. FHI sold more than 20,000 vehicles annually in Russia in the fiscal 2007-2008 and will take a new sales offense now when the market is picking up. With regard to ASEAN countries, FHI will study the feasibility of knock-down assembly in the future.

 FHI reportedly is eyeing entry in the Indian market in the earliest opportunity after 2011.

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