Report: Daihatsu, Fuji Heavy To Supply Each Other With Passenger Cars

29 October 2007

The Nikkei reports that Fuji Heavy Industries Ltd., the makers of Subaru, will produce midsize cars for Daihatsu Motor Company. Daihatsu in turn will supply minivehicles and subcompacts to Fuji Heavy.

Fuji Heavy reportedly approached Daihatsu’s parent Toyota about the OEM deal. Toyota also has a 8.7% stake in Fuji Heavy, and the mutual supply deal would strengthen ties between firms associated with Toyota.

First, Daihatsu will produce subcompacts with 1- to 1.5-liter engines for Fuji Heavy, which has withdrawn from that market. With output beginning as early as mid-2008, some 5,000 to 6,000 subcompacts are expected to be rolled out each year. Daihatsu would then supply minivehicles to Fuji, which is gradually curbing output of the gas-sipping cars.

In return, Daihatsu will procure 2-liter-engine passenger vehicles from Fuji Heavy in a bid to expand its own lineup.