AUTO INDUSTRY NEWS

Subaru parent axes industrial division, shifts focus to cars

Subaru parent axes industrial division, shifts focus to cars image

Anton Andres / Subaru | November 09, 2016 13:26

FHI to invest more on automotive sector

Earlier this year, Fuji Heavy Industries (FHI) announced that they are planning to rename themselves as Subaru Corporation. With Subaru being the one of largest sources of income for the company, FHI has made a step towards focusing even further on the automotive sector by terminating the industrial side of the business. According to FHI, this realignment of their business portfolio was done to focus on Subaru.

Dropping the heavy machinery division of FHI is part of the company's 'Prominence 2020' vision with the goal of 'Enhancing the Subaru brand'. The official statement from Fuji Heavy Industry states, “After a comprehensive reexamination of FHI’s business portfolio, the decision has been made to terminate the industrial products business and concentrate management resources in the automotive business”. Dropping the industrial division of FHI also means that it frees up budget for the Subaru brand in terms of research and development. Manufacture and sale of industrial products, including general-purpose engines and generators, currently sold by FHI will cease on September 30, 2017.

Meanwhile, FHI's aerospace division is safe from being terminated, at least for the time being. The division serves as a contractor for the Japan Defense Agency, and is involved with aircraft manufacturers such as Hawker Beechcraft, Eclipse Aerospace, Airbus and Boeing. FHI also builds parts for the Boeing 737, 747 and 767.

Subaru has been helping FHI stay in profit for several years now. Earlier this year, the Subaru brand has also helped FHI achieve yet another fiscal year record. FHI's net income leaped by 67 percent at $ 3.88 billion dollars while revenue jumped by 12 percent to $28.72 billion. Subaru vehicles are distributed in 90 countries and the company projects selling over one million vehicles in a year by the end of 2017.

While FHI's name change is still subject to shareholder approval, the top executives from the company plan to make the renaming official by April 1, 2017. The date holds significance for FHI as it marks the 100th anniversary of the company.