TOKYO -- Fuji Heavy Industries, whose Subaru brand was one of just two brands that posted U.S. sales gains last year, is now the latest Japanese carmaker warning of full-year losses.
Fuji Heavy CEO Ikuo Mori said today he now expects a 9 billion yen ($89.1 million) operating loss for the fiscal year ending March 31. The revision erases an earlier forecast for operating profit of $227.7 million.
Mori now aims to slash capital expenditures more than 20 percent, cut executive pay 10 percent and eliminate board member bonuses. He also scrapped a plan to build a factory in Japan and may boost overseas production to ease the pain of a skyrocketing yen.
The Subaru parent is chopping its outlook just weeks after Toyota Motor Corp. said it would post its first operating loss since 1938. Nissan Motor Co., meanwhile, is dialing down production again amid Japanese media reports that it will post a full-year operating loss.
Subaru is getting hit hard by tumbling sales worldwide and a yen that has soared 18 percent higher against the dollar since August. The high yen makes overseas earnings worth less when sent home. About 62 percent of all Subarus sold in the United States are imported.
Meanwhile, global sales are now seen falling 7.0 percent to 554,800 vehicles this fiscal year, instead of increasing 3.2 percent as earlier predicted.
Fuji Heavy also forecasts a net loss of $188.1 million instead of net income of $99.0 million. Revenue is seen falling 8.4 percent to $14.3 billion instead of gaining 1.8 percent to $15.8 billion.
Subarus U.S. sales rose 0.3 percent to 187,699 units in 2008, thanks to the popular Forester and Impreza. The only other brand to book an increase was BMWs Mini Cooper, whose sales rose 28.6 percent to 54,077 units.
But its fortunes are changing fast amid the global financial meltdown.
For the fiscal year ending March 31, Fuji Heavy sees total North American sales falling to 207,100 vehicles from 210,300 a year before. Every region except Asia will see declines.
Among the casualties is Fuji Heavys plan to build an assembly plant to produce a new sports car it is jointly developing with Toyota. It will renovate an existing Japanese factory instead.