Subaru to expand capacity by 100,000 at Indiana plant

The announcement comes after Subaru CEO Yasuyuki Yoshinaga said last week it will begin production of a seven-seat SUV at the Lafayette plant after 2017.

Subaru, straining to meet record U.S. demand, will invest $140 million to expand annual production capacity by 100,000 vehicles at its sole U.S. plant.

The news was announced today at a joint press conference between Subaru and Indiana Gov. Mike Pence. The Subaru of Indiana plant in Lafayette, one of the automaker’s three plants worldwide, will gain 1,204 jobs by 2017.

The factory currently employs more than 3,800 workers and produces about 300,000 vehicles per year, according to a press release.

The announcement comes after Subaru CEO Yasuyuki Yoshinaga said last week it will begin production of a seven-seat SUV at the Lafayette plant after 2017. The SUV will be exclusively sold in the North American market, Yoshinaga said. Subaru’s Outback and Legacy and the Toyota Camry are currently produced at the plant.

Fuji Heavy Industries, which owns Subaru, said previously that it would halt Camry production at the plant, which has been building the sedan since 2007. Toyota has confirmed it will end Camry production will end in fall 2016 and shift output to its Georgetown, Ky., plant. The Camry's departure would free up capacity of 100,000 vehicles, on top of the additional 100,000 announced today.

The hiring and investments will “enable SIA to build more Subarus to help meet the growing demand,” said Tom Easterday, Subaru of Indiana executive vice president, in a statement. “The substantial increase in production volume at SIA will also result in new jobs and investment by many of our suppliers across Indiana.”

This is the second major investment in Subaru’s Indiana plant in recent years. The plant is undergoing a $400 million expansion, designed to allow Subaru to begin production of the Impreza model by the end of 2016.

Pence met with Yoshinaga last week in Japan as part of a jobs mission. The Indiana Economic Development Corp. offered Subaru up to about $7.7 million in conditional tax credits and $250,000 in training grants, according to a news release.

Subaru expects a seventh year of record U.S. sales. It sold 52,697 vehicles in the United States last month, up 4.9 percent from August 2014. That was the automaker’s 45th consecutive month of U.S. sales increases.

Subaru has sold 375,632 vehicles this year through August, up 13 percent through the same point in 2014. That puts it on pace to sell about 563,000 for the year, compared with 513,693 last year.

You can reach John Irwin at jirwin@autonews.com

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