Subaru Wants More Factory Capacity In Indiana And Might Stop Making The Toyota Camry There To Get It

Fuji Heavy Industries Ltd. (TYO:7270), the parent to Japanese automaker Subaru, is in talks with Toyota Motor Corp. (TYO:7203) to stop making the Toyota Camry at Subaru’s Lafayette, Ind., plant.

"We have received the offer from Toyota and are now considering it," Fuji Heavy representative Masashi Uemura told Automotive News on Thursday. Subaru had announced the plans on Wednesday.

If realized, the Camry would probably stop being made in Lafayette when the new generation of the No. 1-selling sedan in the U.S. is introduced in 2016. Toyota owns 16.5 percent of Subaru, and releasing some capacity in Indiana would be practically a goodwill gesture considering that the world’s top automaker is struggling with its own capacity issues amid a robust U.S. auto market that could reach hit pre-recession levels of demand by the end of 2014.

Subaru has been on a bull run in the U.S. with a fifth straight annual sales rise as consumers flock to the Outback wagon, Impreza compact and Forester crossover. Subaru reportedly wants to boost production capacity of the Impreza.

Lafayette Mayor Tony Roswarski told the Journal and Courier in a report on Thursday that he doesn’t expect any job losses from the plan but that it could delay a $400 million expansion of the factory that would create 900 full-time jobs.