Toyota, Fuji Heavy Agree to Make Toyota Vehicles at Indiana Subaru Plant

TOKYO December 6, 2005; Yuri Kageyama writing for the AP reported that Toyota Motor Corp. and its new partner Fuji Heavy, the maker of Subaru brand cars, have agreed to make Toyota vehicles at Fuji's U.S. plant in Indiana, both sides said Tuesday.

The two Japanese automakers said the decision was finalized when the company presidents met Monday. However, details such as job additions, what model will be manufactured, vehicle numbers and when the production will start at the factory in Lafayette, Ind., still need to be worked out.

In October, U.S. automaker General Motors Corp. said it was ending its alliance with Fuji Heavy Industries Ltd. and selling its entire 20 percent stake Fuji. At that time, Toyota bought an 8.7 percent stake in Fuji for about $315 million and became the top shareholder in Fuji.

The Indiana plant now makes about 100,000 vehicles a year at the plant. The models it produces includes the Outback station wagons, Legacy sedans and the Baja and B9 Tribeca sport-utility vehicles.

Analysts have said that Toyota vehicle production at the U.S. Subaru plant will likely be about 100,000 vehicles, but it wasn't clear if Toyota models would replace Subaru models or if they would boost the total factory output.

In Monday's meeting, Toyota President Katsuaki Watanabe and Fuji President Kyoji Takenaka also agreed that Fuji will send engineers to Toyota to work together on technology to develop vehicles, but the number of engineers and areas of cooperation are still undecided, a Fuji spokesman said on condition of anonymity, based on company policy.

A Toyota spokeswoman, who also requested anonymity, also confirmed the deal and said that the model that will be made there will be for the U.S. market.

Fuji has its own hybrid technology, although Toyota leads the world automakers in that technology.

Fuji also has jet plane operations that may be of interest to Toyota, which has been carrying out aviation research. Toyota officials have said that the cooperation with Fuji being discussed so far is only in autos.