TOKYO -- Fuji Heavy Industries Ltd., the maker of Subaru-brand vehicles, is in talks with Saab Automobile AB to jointly develop cars, a company source told Reuters on Monday.
Fuji Heavy, owned 20 percent by General Motors, and Saab Automobile, which is fully owned by GM, aim to realize significant cost savings through joint development of compact cars, he said.
The two companies will also strengthen sales cooperation, with Subaru dealers in Japan selling Saab cars from as early as this year, the source said.
Subaru is also considering supplying vehicles to Saab in the United States on an OEM (original equipment manufacturer) basis, he said.
A spokesman for Fuji Heavy said nothing had been decided. GM officials were not available for comment.
On Saturday, business newspaper Nihon Keizai Shimbun said the two automakers would jointly develop and market a small sports car, targeting combined annual sales of more than 100,000 units.
They aimed to roll out the car worldwide by 2005, it said.
GM and its group firms have cooperated in the past on research and development and parts procurement, and are now seen aiming to take their cooperation a step further to joint development, production and marketing.
Such moves are aimed at improving the GM group's competitiveness and boosting global market share, the paper said.