No Subaru without Toyota

A change to Japan’s antitrust laws on the first of this month has paved the way for industry giant Toyota to take over Fuji Heavy Industries, the parent company of Subaru. Toyota has owned an 8.7% minority stake in Fuji Heavy since October 2005 but this is set to increase to a controlling stake in the near future. Now, in a recent interview with The Car Connection, CEO of Subaru Ikuo Mori admitted that his company would likely cease to exist without the aid of Toyota.

The partnership between the two kicked into full swing last year after Subaru cut its ties with General Motors. "The reason we stopped that alliance with GM was because of their own difficulties," said Mori, adding "the result were not good with GM." Subaru was in need of a savior and in came Toyota. The new deal is already paying off. Toyota has used some of Subaru’s idle capacity to build Camry sedans and in the future, Toyota is expected to provide Subaru with new drivetrains including a hybrid unit.

But don’t expect it to become just another Toyota division. "We are a small player and cannot focus on many projects," Mori noted. "So we will focus on our core and draw from Toyota elsewhere." Subaru’s goal is to capitalize on the lucrative US market with its focus set on Southern California. Subaru displayed its facelifted Tribeca SUV and the next-generation Impreza and WRX models at the recent New York Auto Show, two vehicles the carmaker hopes will increase sales by 15% over the coming 12 months and in turn boost its global output to 635,000 cars.