TOKYO -- Subaru is weighing its options for adding much-needed production capacity in North America.
Yasuyuki Yoshinaga, president of Subaru-maker Fuji Heavy Industries Ltd., said he is focusing on the Subaru of Indiana Automotive Inc. plant in Lafayette, Ind., though he concedes that discussions also have been held on a plant in Mexico.
"We have to think very carefully about the capacity of SIA," said Yoshinaga. "That is our big task."
Hard hit by Japan's earthquake, Subaru's U.S. inventory level recently plummeted to 16,000 units in the United States, said Yoshinaga, who visited U.S. dealers in late October.
"I could see that inventories were almost empty," he said.
But even with normalization of shipments from Japan, the strength of the yen and Subaru's three-year U.S. growth spurt means the company is in dire need of more North American production capability.
Yoshinaga said there is "some slight discussion" about prospects for a plant in Mexico. Noting that Mexican labor costs are about one-seventh those of the United States, he said: "I understand why people start to think about Mexico. On the other hand, we think our characteristics are luxury and quality, [and since] SIA has a good quality performance we should focus on SIA."
Subaru currently is able to build 160,000 units a year in Indiana, while Toyota can produce 100,000 Camrys at the location as part of a capacity-sharing arrangement.
Yoshinaga said going much higher would require a major investment.
He said the decision will hinge on the strength of the yen and the success of the redesigned Impreza now going on sale in the United States. But he would not confirm that the Impreza is under study for production at SIA.
Still, other company sources say another model besides the Legacy and Outback now built in Indiana could be produced there.
Limited supplies stalled Subaru's growth in 2011, but Subaru of America Inc. COO Tom Doll said Subaru aims for 300,000 sales next year, up from about 260,000 in 2011.