Tensions with China delay Fuji Heavy output boost in U.S.

Bloomberg

Fuji Heavy Industries Ltd.’s president says the maker of Subaru cars delayed making a decision on its U.S. capacity expansion because slumping demand in China and Europe gave the company more room to ship vehicles to America.

The company will decide on the expansion by the end of the business year in March, instead of the previous plan to do so by the end of December, President Yasuyuki Yoshinaga said in an interview at the company’s Tokyo headquarters Tuesday.

Fuji Heavy will probably choose an “incremental” expansion in U.S. manufacturing rather than building a new factory, he said.

The comments illustrate how the slump in Chinese demand for Japanese products — fueled by the diplomatic row that flared in September over the Senkaku Islands — is interfering with global strategies.

Auto parts makers from Koito Manufacturing Co. to Sumitomo Electric Industries Ltd. have said they’re considering stepping up their expansion in regions such as Southeast Asia to counter the risk of conducting business in China.