CEO Kyoji Takenaka told a small group of reporters on Friday that Fuji Heavy
would bring the engine to production at full throttle after agreeing last week
to borrow Toyota Motor Corp.'s technology for hybrid cars.
"Because we're a small company, we had to choose between hybrid and diesel. Now
that we have this arrangement with Toyota, diesel engine development and production
are going to be our priority," Takenaka said, adding that the fuel-efficient
engine, which powers half of Europe's cars, was also gathering momentum in major
markets such as the United States and China.
"We're hoping to get it to market sometime around the end of 2007, or 2008," he
said.
The engine would be compatible with its iconic symmetrical all-wheel-drive system,
used on about two-thirds of its vehicles. Subaru will probably start offering
the diesel option on the Legacy model, Takenaka suggested.
By 2010, about half of Subaru's European sales - projected at 100,000 units
by then - should be fueled by diesel, he said. Subaru sold 62,049 cars in Europe
last year.
Beyond that, about one-third of Subaru's total all-wheel-drive models would switch
to diesel, Takenaka said. He predicted the powertrain would eventually account
for 10 to 20 percent of total car sales in Japan and the United States.
To reduce investment outlays, Subaru would build the engines on the same line
as gasoline engines - a task that was possible thanks to the unique structure
of the symmetrical AWD drivetrain, he said.
Fuji Heavy has yet to decide how specifically to proceed in developing gasoline-electric
hybrid cars using Toyota's technology, but Takenaka said those vehicles would
come to market only after the diesel products.
Industry watchers are keen to see how far the new alliance will go, particularly
whether Toyota will eventually boost its equity stake. Toyota took minority stakes
in mini-vehicle maker Daihatsu Motor Co. and truck maker Hino Motors Ltd. before
turning them into majority-owned subsidiaries years later.
Takenaka said he did not envisage Fuji Heavy's becoming a full-blown member of
the Toyota group, but rather being an independent partner much like motorcycle
maker Yamaha Motor Co., in which Toyota holds a 4.4 percent stake.
"We're a pretty stubborn bunch," said the former engineer. "We never managed
to blend in with Nissan Motor Co. or GM when we were allied with them. We'll
preserve our independence," he said.
Takenaka said, however, that Fuji Heavy had a lot to learn from Toyota, mainly
in reducing Subaru's high production costs and expediting the speed of vehicle
development.
