How Subaru Lost its Joint Venture in China

Marvin Zhu

A year ago, Fuji Heavy Industries, as well as several other global carmakers, chose not to locally produce vehicles in China. Fuji Heavy was said to be seeking a local partner to establish a joint venture. According to rumor, Great Wall, well known for its SUVs, was one possible candidate, as Subaru’s most popular model in China is also an SUV—the Forester.

Beijing Auto (BAIC) was also closely linked because the company needed to expand its product portfolio to compete against other state‐owned giants, such as SAIC, FAW and Dongfeng. In addition, some smaller players—such as Huatai,Youngman and several others— were also mentioned.

However, it was eventually revealed that Chery was the last remaining company in the running to partner with Subaru. A JV would use Chery’s new plant in Dalian to make the first model, which was likely to be the Forester. Chery could learn a lot from Subaru’s engine technology, and might even develop a new brand based on the new technology.

Unfortunately, according to a recent announcement from Fuji, the company has dropped plans to manufacture vehicles in China, after failing to secure the Chinese government’s approval for a joint venture. Since then, Fuji Heavy cut its global sales targets and instead decided to increase its manufacturing capacity in the United States and in Japan. Continue reading ›