Subaru to stop building Camrys for Toyota in Indiana, reports say

TOKYO -- Subaru, about to achieve five straight years of annual U.S. sales records, will stop building Toyota Camry sedans at its Indiana assembly plant by 2017, according to U.S. media reports.Subaru of Indiana Automotive Inc., which makes Subaru vehicles alongside the Camry, will not renew a five-year contract to build the cars for Toyota Motor Corp., the Louisville Journal & Courier reported on its Web site, citing Tom Easterday, SIA's executive vice president.Similar plans were reported separately by WLFI, a local television broadcaster in the area of Lafayette, Ind., where the plant is located. It also cited Easterday."Based on changes in Toyota's production plans, they have decided that the award-winning Camry production contract will not be renewed," the Journal & Courier's jconline.com quoted Easterday as saying.Toyota spokesman Brian Lyons declined to comment. The automaker now faces the prospect of moving around its North American production to make room for the displaced Camry line.Masashi Uemura, a Fuji spokesman, said nothing has been decided and the company has nothing official to announce.Subaru said earlier this year that it would boost the plant's annual capacity to build Subaru vehicles to 300,000 by the end of 2016, up from 170,000 currently. On top of that, the company has capacity to build 100,000 Camrys a year.Subaru also said earlier this year it would add production of the Impreza to the factory, its only plant in North America.Easterday was quoted as saying the addition of the Impreza will mean no job cuts. The contract to build the Camry ends in 2016, he added."There will be no loss of jobs at SIA as a result of this," Easterday was quoted as saying by the Journal & Courier."We also know there are future projects that Subaru has in mind for our plant that should add several hundred jobs in the future, possibly by 2018."Earlier this week, Fuji Heavy President Yasuyuki Yoshinaga said Subaru is planning to introduce a new seven-seat vehicle to replace the Tribeca, which is currently made at SIA.He said that vehicle won't debut for at least two years, but declined to say where it would be built.Subaru is in desperate need of more capacity, as it aims for annual U.S. sales of 500,000 by 2016. That's up from an estimated 420,000 units expected this year.Discontinuing the Camry could free up total capacity for 400,000 Subaru-badged vehicles at SIA.Record salesSubaru is on track for its fifth straight year of record sales in the United States. Through October, Subaru’s U.S. sales had risen 28 percent to 347,890, in a market that was up 8 percent. That put Subaru’s sales for the year ahead of those of Volkswagen brand, Mercedes-Benz and Chrysler brand.The Indiana plant began building Camrys on a dedicated line in April 2007, following Toyota’s purchase of an 8.7 percent stake in Fuji Heavy in 2005. Toyota’s stake has since grown to 16.5 percent, making Toyota the largest shareholder of Subaru’s parent.The factory originally was a joint venture between Fuji Heavy and Isuzu Motors, known as Subaru Isuzu Automotive Inc., with one line for Subaru’s cars and a second for Isuzu’s trucks. But Isuzu pulled out due to slack sales. Then Toyota stepped in, taking advantage of the unused capacity to meet rising demand for the Camry.

Subaru to stop building Camrys for Toyota in Indiana, reports say

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