Toyota and Fuji Heavy Industries Form Strategic Alliance for Hybrid Vehicle Production

Strategic Insights -

Toyota Motor Corp. and Fuji Heavy Industries Ltd., the parent company of Subaru, have announced a business tie-up to co-develop hybrid vehicles. As part of this alliance, Toyota will use a Fuji Heavy factory in the U.S. to produce its Camry sedan, with production expected to start as early as spring 2007. The move marks a significant shift in Toyota's global strategy, with Fuji Heavy becoming an essential partner in terms of production and development.

Key Takeaways:

  • Toyota and Fuji Heavy Industries will co-develop hybrid vehicles, aiming to commercialize hybrid Subaru cars in two to three years.
  • Fuji Heavy will manufacture about 100,000 Toyota Camrys a year at its plant in Indiana, with production capacity set to increase to 240,000 units per year.
  • Toyota will use Fuji Heavy's production system, with the factory expected to hire around 1,000 new workers.
  • The alliance includes outsourcing the development of Toyota models to Fuji Heavy, with specific models to be decided by summer 2007.
  • Toyota currently holds an 8.7% stake in Fuji Heavy, with plans to increase its presence at the company.
  • Fuji Heavy will invest around $230 million to enhance production capabilities at the U.S. plant.

Statistics:

  • Toyota will produce 100,000 Camrys per year at Fuji Heavy's Indiana plant, with production capacity increasing to 240,000 units per year.
  • The factory assembled around 120,000 cars in 2005 and is expected to hire around 1,000 new workers.
  • Toyota currently holds an 8.7% stake in Fuji Heavy.
  • Fuji Heavy will invest around $230 million to enhance production capabilities at the U.S. plant.
  • The partnership aims to commercialize hybrid Subaru cars in two to three years.

Sources:

  • Asia Pulse, Honda, Toyota and Nissan Bolster Export Plans (February 20, 2006)
  • Nikkei, Toyota, Fuji Heavy Form Alliance (March 14, 2006)