Subaru Sees First Loss in 15 Years

Jan. 16, 2009
Stronger yen part of cause

Fuji Heavy Industries Ltd., the Japanese maker of Subaru brand vehicles, said on Jan. 16 it expected its first annual loss in 15 years because of weak demand and a stronger yen. The company, which is part owned by Toyota Motor Corp., predicted a net loss of 19 billion yen (US$211 million) for the current financial year to March, against a previous forecast of a profit of 10 billion yen. It would be the group's first annual loss since the year to March 1994, a company spokeswoman said.

Fuji Heavy expects an operating loss of 9.0 billion yen, compared with an earlier forecast for a profit of 23 billion yen. The company blamed "a sharp downturn" in demand for automobiles worldwide and the rapid appreciation of the yen, which reduces overseas profits. The previous year it had made a net profit of 18.48 billion yen and operating earnings of 45.68 billion yen.

Toyota, which expects its first ever loss this year due to the global economic downturn, in April said it would almost double its stake in Fuji Heavy to 16.5% and deepen ties in research and product development.

Fuji Heavy said last month it was pulling its Subaru team out of the world rally championship because of the rapidly worsening business climate.

Copyright Agence France-Presse, 2009

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