TOKYO Feb 8 Fuji Heavy Industries, the
maker of Subaru cars, raised its full-year profit forecast on
Wednesday, citing a weaker yen, and said it was closely
monitoring policy in its biggest market, the United States.
Japan's seventh-largest automaker sells around 60 percent of
its cars in the United States, where demand for its Outback,
Forester and Impreza models has been strong. In response it
increased production capacity last year at its plant in Indiana,
where it expects production to more than double by 2018.
Despite the increased production capacity, the automaker
still produces the majority of its vehicles in Japan, and more
than half of all of its cars sold in the United States in 2016
U.S. President Donald Trump has taken issue with the
proportion of cars domestic automakers import rather than
produce locally, considering the size of sales in the world's
Japan's automotive exports are likely to be high on the
agenda when Japanese Prime Minister Shinzo Abe meets with Trump
for summit talks in Washington later this week.
"Changes in U.S. trade policy could have a big impact on our
business, so we are following developments carefully," CFO
Mitsuru Takahashi told reporters at a briefing, adding the
company has yet to make any concrete plans to respond to
Fuji Heavy expects net profit to come in at 290 billion yen
($2.58 billion) for the year ending March 31, up from a previous
forecast for 278 billion yen, but still down from 437 billion
yen last year. Analysts polled by Thomson Reuters I/B/E/S/ have
forecast a net profit of 316.5 billion yen.
The new forecast is based on expectations for the yen to
average 108 yen to the U.S. dollar and 119 yen to the euro
through March, compared with a previous forecast for 104 yen and
115 yen, respectively.
For the third quarter Fuji Heavy posted an operating profit
of 98.28 billion yen, down from 150.64 billion yen a year ago
and undershooting a median analyst forecast for 109.9 billion
Strength in the domestic currency and increased costs
related to air bag recalls weighed on the automaker's bottom
line in the October-December period despite strong vehicle
($1 = 112.2300 yen)
(Reporting by Naomi Tajitsu; Editing by Muralikumar