TOKYO -- Fuji Heavy Industries Ltd., maker of Subaru vehicles, is trying to reverse its falling profits by slashing spending and cutting staff.
Fuji Heavy is reducing spending on r&d, plants and equipment. It also plans the first round of Japanese staff cuts in its history by offering early retirement packages.
The automaker also is selling financial assets.
Fuji Heavy projects a modest currency gain this year, in contrast to the currency loss it forecast as recently as last May.
Its cost-cutting efforts yielded a 12.3 percent rise in operating profits to 17.41 billion yen, or $153.8 million at current exchange rates, in the six months through September. But net income fell 3.8 percent from a year earlier to $70.3 million on extraordinary losses.
Those losses included $49.6 million upon canceling work on a new model with Saab.
Revenues fell 3.4 percent to $5.89 billion. Unit sales fell 4.0 percent to 264,000.
Fuji does not release quarterly results.
North American operating losses narrowed in the half year to $55.0 million, from $68.2 million a year earlier. Unit sales fell 6.1 percent to 88,000. North American revenues fell 5.1 percent to $2.05 billion.
Fuji predicts its operating profits for the current fiscal year ending March 31 will fall 7.2 percent to $344.6 million despite its cost-cutting efforts. It says full-year net income will drop 34.2 percent to $106.0 million. In May, it forecast operating profits and net would rise modestly.
The company blames a less profitable mix of the cars and trucks it sells and weakness in North America.
In addition, one-quarter of Fuji's global sales are 660cc minicars in Japan. Fuji and other minicar makers are caught in the crossfire as minicar leader Suzuki Motor Corp. fends off a market-share challenge from No. 2 Daihatsu Motor Co., a unit of Toyota Motor Corp.
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