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Subaru creates new joint venture company

Supplier News

New group to grow Subaru Industrial Power Products sales in China.

| July 17, 2012

Fuji Heavy Industries, parent company of Subaru Industrial Power Products, has signed an agreement establishing a joint venture company in Shanghai, China to enhance sales of Subaru equipment and better serve customers in the country. The agreement, signed in partnership with Toyota Tsusho (China) Co., Ltd. of Toyota Tsusho Group (Toyota Tsusho), establishes the company Subaru Industrial Power Products of China Co., Ltd. Full operations are scheduled to begin in September 2012.

Subaru’s investment and expansion in the Chinese market is a strategic move to stay ahead of the growing demand for industrial products in the country. The company, as well as parent company FHI, is committed to expanding resources and sales channels in order to better meet the needs of customers, according to Brad Murphy, COO and executive vice-president of Subaru Industrial Power Products in North America. “Local economic factors indicate a continued rise in China’s market. We’re planning ahead to ensure we’re poised to accommodate greater demand in this growing area,” Murphy said. Much of the growth in China’s market for industrial products such as agricultural engines, construction machinery and pumps is credited to the country’s agricultural mechanization and infrastructure development.

In addition to investing in the Chinese market, Subaru is striving to increase its service and market share in North America, as well as continue its longstanding mission to advance products through innovation and technology.

“Now more than ever, it’s crucial to invest in opportunities for growth, both in sales and product development,” Murphy said. “While other companies respond to tough economic times with cutbacks, we’ve opted to further strengthen our service and innovation efforts for our customers, and are gaining new business and greater market share as a result.”

FHI’s industrial product sales in China have been conducted through multiple distribution channels and the product lineup has been limited to exports from Japan and units manufactured at FCR*, a local joint venture between FHI and a Chinese partner. Under the new company, FHI intends to enhance the sales and service networks, technical support and customer convenience through a single distribution channel. The product lineup will also be reinforced by adding locally made products that are currently manufactured under contract by Chinese companies. The annual sales target is set at 200,000 units by 2015, a significant increase from 122,000 units sold in 2011.

In its “Motion-V” mid-term business plan through March 2016, FHI’s Industrial Product division has set a goal to develop its Chinese market as the third pillar following the U.S. and Japan, and the setup of the new sales company represents the first step to achieve that objective. Toyota Tsusho will leverage its cultivated experience and network in China to develop a distribution channel for high quality industrial power products.

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