TOKYO -- Japan's Fuji Heavy Industries Ltd., the maker of Subaru cars, said on Friday it expects its global auto sales to rise a mere 0.2 percent in 2005 from the previous year, as a weak dollar weighs on its crucial North American sales.
Subaru, which is 20 percent owned by General Motors, said rising interest rates in the United States could also hurt the market, but its new sport-utility vehicle could boost sales.
The North American market accounts for over a third of Subaru's auto sales.
"We hope to build a strong foundation with our Legacy and to expand U.S. sales by adding the new B9 Tribeca," Fuji Heavy President Kyoji Takenaka said of the seven-passenger, mid-size SUV.
The car was introduced at the North American International Auto Show on Tuesday.
"The new Tribeca will be Subaru's next flagship vehicle," he added.
The B9 Tribeca will hit the U.S. market by early summer with an initial target for sales of 3,000 units a month, and Fuji Heavy said it planned to eventually expand the sales base to other markets, although it didn't specify timing.
The niche maker of off-road vehicles aims to sell 600,000 cars globally this calendar year, expecting flat growth in the overall auto market, after it sold 599,022 vehicles worldwide in 2004, up 10.1 percent from the previous year.
The flat sales targets for this year, which were announced at a news conference in Tokyo, include 0.2 percent growth at home to 279,000 vehicles and a 0.1 percent rise abroad to 321,000.
The automaker also aims to boost its global production by 1.2 percent this year to 600,000 vehicles by increasing overseas output by 19.4 percent. Its domestic production is projected to fall 2.7 percent from 2004.
In November the company reported a 71 percent jump in operating profit for the July-September quarter and kept its full-year forecasts intact as it expects the remodeled flagship Legacy to drive a further recovery.
The firm's 2005 sales projection could make it difficult to meet its goal to sell 750,000 vehicles worldwide in the year to March 2007, a target that was set in 2002 under a mid-term business plan.
"We are aware we have a lot to conquer to make the goal," Takenaka said.
He said Fuji Heavy would strengthen its "soft side" such as sales operations and services to cope with changes in economic and other conditions, such as an incentives war in the United States, to close in on the 2006/07 sales target.
Fuji Heavy plans to shrink incentives in 2005, which were at around $1,300 per unit in the previous year, and to increase sales through better marketing, the firm said.