TOKYO -- Fuji Heavy Industries Ltd., maker of Subaru vehicles, posted a 23.6 percent drop in operating profits in North America in the last fiscal year.
The decline, to $135.7 million for the year ended March 31, was mainly attributed to incentives on the aging Legacy before a 2004 arrival of its revamped version. The Baja pickup, whose average sales came to roughly one-third of a monthly sales goal of 2,000, also ate into profits.
Fuji Heavy will launch an updated Legacy on Friday, May 23, in Japan, then in Europe in autumn.
The fall in North American profits dampened Fuji Heavy's group, or consolidated, operating profits, which fell 23.7 percent to $561.7 million. That was on top of revenues of $11.4 billion, an increase of 0.7 percent. But net income rose 10.6 percent to $278.6 million as one-time charges, including a smaller loss in securities owned by Fuji Heavy, shrank.
Japanese operations also slumped, with operating profit in Japan sliding 21.1 percent to $475.3 million.
"It's not too much to say our business for this fiscal year depends on Legacy's success," says Kyoji Takenaka, president, who will become CEO in June.
CEO Takeshi Tanaka will step aside to become an adviser to the company.