Subaru has been merely a subsidiary of Fuji Heavy Industries (FHI), which builds everything from generators to engines for construction equipment to aerospace parts. Now, the Subaru brand will play an even bigger part in its parent company’s grand scheme, as FHI is terminating its industrial products business to focus on its core automotive brand.
This will end production of engines for industrial and agricultural use, and powersports vehicles like snowmobiles and ATVs. FHI’s Omiya plant has churned out industrial products for more than 60 years, but will cease production on September 30, 2017. Production of some engines will transfer to China as part of a manufacturing joint venture.
In its “Prominence 2020” mid-term management plan announced in 2014, FHI listed “Enhancing the Subaru brand” as one of its main objectives. This move works toward that goal by freeing up budgets for the product development and engineering divisions and allowing management to concentrate on the automotive side of the business. FHI says the goal is to enhance the Subaru brand and achieve “even greater sustainable growth.” FHI announced earlier this year that it will change its name to Subaru Corporation on April 1, 2017, to coincide with its 100th anniversary. Prior to 1945, FHI went by the name Nakajima Aircraft Company and built some of the most feared warplanes of World War II.
Subaru has seen tremendous growth in the U.S. over the past few years. Through October, sales are up 4.2 percent with 500,647 vehicles sold so far in 2016 – bucking the slumping sales trend the rest of the industry is facing. However, as electrification and self-driving features inch closer to entering the mainstream, automakers are realizing the tremendous costs of developing these technologies. This could be one reason for refocusing the business.