--Subaru-car maker expects to sell more than 380,000 vehicles in U.S. this year
--Expected sales will beat initial target of 365,000 for this year, goal of 380,000 for fiscal 2015
--May not be able to produce enough Forester SUVs to meet U.S. demand
TOKYO--Demand for some Subaru vehicles in the U.S. could outstrip production as Fuji Heavy Industries Ltd. (7270.TO) expects to hit its midterm sales target more than two years early, the chief executive of the auto maker said Thursday.
Surging sales in the first three months of 2013 followed by a 25% leap in April have convinced Fuji Heavy that it has the momentum to beat not only its 365,000 vehicle target for the current calendar year but also its 380,000 target for the business year ending March 2016, CEO Yasuyuki Yoshinaga said in an interview.
The comment underscores the company's growing success in the U.S. where it now logs about half its global sales and follows a fifth straight year of improved sales in the market in 2012.
But the CEO said the car maker may not be able to take full advantage of soaring demand because of its relatively limited production capacity.
This year's initial Subaru sales target in the U.S. already represented an 8.6% increase on the previous year. But a 17.4% rise in sales to 125,470 vehicles in the first four months of the year from the same period last year strongly indicates that this year will be a banner year for Fuji Heavy. Sales in April were particularly strong thanks to the launch of the remodeled Forester small sport-utility vehicle in March.
The company "will have to set a new target as we are likely to hit" the current goal for the U.S. this year, Mr. Yoshinaga said, referring to the midterm goal.
Fuji Heavy projects a second straight year of record operating profit for the current business year to March 2014 on the back of solid U.S. sales and a weaker yen. The rosy outlook has helped make the company's shares the best performing stock among auto makers in the Tokyo market, even though it is the smallest Japanese car maker by volume.
The firm's efforts to focus more on the U.S. market in the past decade are helping build extra momentum on top of the solid resurgence in the overall market.
The Subaru-vehicle maker now develops vehicles to better meet American customers' tastes by making them wider and roomier. It is also enhancing sales networks in southern states where sales have been relatively weak.
Its latest growth strategy for the market was outlined earlier this month. It said it will increase annual production capacity by 100,000 vehicles to 300,000 at its plant in Indiana by 2016.
However, the latest measure won't help the company meet potential demand over the coming months, the top executive said.
Mr. Yoshinaga said sales of the redesigned Forester could reach 10,000 vehicles this month, above a monthly target of 8,000, but only if the company can build enough. It ships all the SUVs from Japan.
"If this situation persists, we'll face a supply shortage," Mr. Yoshinaga said.
The car maker has been working on improving its supply of vehicles in recent years. Its U.S. inventories increased to a 40-day supply from 18 days at the end of 2011, but still well below the U.S. car industry average of around 60 days.
But it will be hard to raise its output capacity in Japan anytime soon as its domestic plants are operating at full capacity, he said. Inventories for the SUV in the U.S. stand at a 16-day supply, he added.
Write to Yoshio Takahashi at [email protected]