Subaru launches new Legacy, eyes emerging markets

* Sees global Legacy sales averaging 15,000 units/month
* Legacy sales in 2009/10 seen up 28 pct at 157,000 units
* Aims to launch clean diesel, hybrid cars in 2-3 years

TOKYO, Japan – Fuji Heavy Industries, the maker of Subaru cars, launched its revamped Legacy series on Wednesday, saying it was counting on the flagship model to push further into emerging markets as demand falters in the United States and Japan.

The niche maker of sporty, all-wheel-drive cars said its sales in developing car markets centred on Russia and China have been concentrated so far on the Forester SUV, but that the new Legacy, remodelled with a bigger, 2.5-litre engine, would help it appeal to more consumers globally.

“The Russian market is tough right now, but we think the new Legacy will be more competitive in emerging markets,” Chief Executive Ikuo Mori said at the car’s launch in Tokyo.

Mori said he expected the Legacy’s global sales to average 15,000 units a month, with roughly half of that in the United States, a fifth in Japan and the rest in Europe and other markets.

For the financial year to March 2010, Fuji Heavy aims to boost Legacy sales by 28 percent to 157,000 units globally, making it the top-selling model accounting for about 30 percent of its total sales forecast.

‘”Based on prices already announced in the United States, price competitiveness looks good and we see little risk of a weak reception,'” UBS auto analyst Tatsuo Yoshida wrote in a report.

The Legacy will start at $19,995 in the United States, or $800 lower than its predecessor.

Analysts say expectations are high for the Legacy’s contribution to Fuji Heavy’s bottom line after the company improved per-vehicle profitability on its mainstay cars in the past few years.

As a maker of cars popular with enthusiasts and in the U.S. snowbelt for its flat-four all-wheel-drive technology, Fuji Heavy has been relatively shielded by a broad-based shift towards smaller, cheaper cars.

But Mori acknowledged the need for Subaru to improve its mileage further, saying it continued to work on a clean-diesel car for launch by 2011 or 2012, and a hybrid vehicle around the same time with the help of top shareholder Toyota Motor Corp.

Fuji Heavy has forecast a sixfold increase in its operating loss to 35 billion yen ($366 million) this financial year – a projection many analysts say is excessively pessimistic.

Brokerages surveyed by Thomson Reuters expect the loss to be about half that.

Already, brisk sales of the revamped Forester have helped Subaru’s U.S. sales stay roughly flat in the year to date, bucking a 37 percentage fall in the overall market.

The new Legacy, which marks the fourth remodelling since the series debuted 20 years ago, goes on sale in Japan on Wednesday, followed by the United States this summer and later in other markets.

It is available in three body types: the sedan, the mainstay touring wagon and crossover SUV.

Shares of Fuji Heavy, held 16.5 percent by Toyota, were down 0.9 percent in afternoon trade, slightly underperforming Tokyo’s transport sector.

Sourced via motoring.asiaone.com