December 10,1999 | NewsRelease | Subaru Corporation

December 10, 1999

Fuji Heavy Industries Ltd.
Corporate Profile

1.Corporate Data

Fuji Heavy Industries Ltd.

Head Office:

Subaru Building 7-2, 1-Chome Nishi-Shinjuku,
Shinjuku-ku Tokyo 160-8316, Japan
Phone (03) 3347-2111 Fax (03) 3347-2338

Established:

July 15, 1953
(Founded in 1917 as Aircraft Research Laboratory)

President and Chief Executive Officer:

Takeshi Tanaka

Paid-In Capital:

�85,121 million

Number of Employees:

14,945

Review of Operations:

Total Production:	554,659
Domestic Units:	447,196
Overseas Units:	107,463
Total Domestic Registration:	286,393	(including Mini-Cars)
Total CBU Exports:	166,367
Non-Consolidated Net Sales:	�928,277 million
Consolidated Net Sales:	�1,352,520 million
Number of Consolidated Subsidiaries:	72

2. Corporate Outline

Fuji Heavy Industries (FHI) comprises five manufacturing divisions.

Automobile Division: The Subaru line of automobiles produced by FHI's automotive division, including the Legacy, Forester and Impreza models, are marketed in more than 90 countries.

Aerospace division: FHI produces aircraft for the Japan Defense Agency. In commercial contracting, FHI contributes to the production of all Boeing passenger aircraft.

Bus Manufacturing & House Prefabricating Division: FHI develops and manufacturers bus bodies to suit all types of chassis, and is applying the technology garnered from these operations to produce unit-assembled, prefabricated mini-houses.

Transportation and Ecology Systems Division: FHI produces unique railcars, such as a pendulum-type super-express diesel car. This division also boasts an extensive lineup of ecology systems-related products, including refuse collection vehicles, refuse collection and separation systems, and ash dissolution systems for waste incineration plants.

Industrial Products Division: FHI develops and merchandises general-purpose "Robin" engines that are used for a wide array of equipment, ranging from agricultural and construction machinery to leisure craft such as snowmobiles.

3. Corporate History

Fuji Heavy Industries Ltd. is the successor to Nakajima Aircraft Co. Ltd , which was originally established as Aircraft Research Laboratory by Chikuhei Nakajima in 1917. Nakajima Aircraft was once the nation's leading aircraft manufacturer, employing some 250,000 workers.

In 1945, as World War II drew to an end, aircraft production came to a halt. The company made a new start as Fuji Sangyo Co., Ltd. In accordance with the corporate credit rearrangement law of 1950, Fuji Sangyo was divided into 12 companies. In 1953, Fuji Heavy Industries Ltd. was created through investments from five of these companies: Fuji Kogyo, Fuji Jidosha, Omiya Fuji Kogyo, Utsunomiya Sharyo and Tokyo Fuji Sangyo. Two years later, these five investors were merged with FHI, and the company began the full-scale business activities of the FHI that we know today.

On March 3, 1958, an endearing passenger car with a distinctive individuality was introduced to the market: the Subaru 360, the first Subaru car. May 14, 1966, marks the debut of the Subaru 1000, Japan's first front-wheel drive (FWD) vehicle to use the salient feature of today's Subaru vehicles �\ a Horizontally Opposed Engine. In September 1972, the Subaru Leone 4WD Station Wagon, the first passenger car with All-Wheel Drive, was introduced. In 1984, the world first development of ECVT was announced.

4. Current Status of FHI Business

In fiscal 1990, as a result of a slump of both US business and domestic mini-car sales, FHI posted the first loss in operational income ever since its stock was listed on the Tokyo Stock Exchange. In fiscal 1991, FHI was forced to forego its dividend as the loss caused by past excessive investment expanded further.

FHI tackled a restructuring plan focusing on the following: a sales increase in the domestic market, cost reduction activities and restructuring of the US business. The hard struggle for recovery resulted in remarkable achievement in fiscal 1999 �|Net sales, gross profit, and operating income are at record high level, and dividends have recovered to their pre-restructuring level.

In order for FHI to grow steadily in 21^st century, it is imperative to enhance the Subaru brand by capitalizing on technological expertise. Thus, FHI is currently striving for the further strength of business foundation by formulating an Executive Officers System, liquidating the accumulated losses of its subsidiaries, and reducing group interest-bearing liabilities.

5. Technologies in Automobile Division

	A.	All-Wheel Drive System
		Subaru's mass-produced 4WD passenger vehicles, the forerunner to the AWD cars, made their debut in 1972. Since then, more than 5 million AWD (All-Wheel Drive) vehicles have been produced. The foundations of the AWD system that have enabled Subaru to lead the automobile industry in this field are the combination of Subaru's unique longitudinally mounted Horizontally Opposed Engine and symmetrical All-Wheel Drive layout. This layout, with its lower center of gravity and excellent weight balance, offers ideal driving stability and handling performance.
	B.	Horizontally Opposed Engine
		FHI employed the Horizontally Opposed Engine when Subaru 1000 was introduced in 1965. Since then, the technology has become part of the tradition of Subaru cars. The Horizontally Opposed Engine is compact and short in length and has a lower center of gravity.
	C.	CVT
		In September 1984, FHI developed the world's first Electro-Continuously Variable Transmission. In February 1987, the ECVT-equipped Subaru Justy was introduced. Subaru's ECVT component has been supplied to Fiat from January 1989 and to Nissan from March 1991. In October 1998, a new type of intelligent CVT (i-CVT) was introduced for domestic mini-car Pleo. FHI has produced more than 1.4 million CVT units since its introduction.

6. Current Relationship with Other Car Companies

FHI is currently supplying CVTs to Nissan and Fiat. In the domestic market, Nissan is supplying Leone Van, and Justy is purchased through Suzuki's Hungarian Magyar Plant in Europe. As for production facilities, Subaru-Isuzu Automotive (FHI 51%/Isuzu 49%) was established in Indiana (USA) in 1992. The Subaru Legacy/Outback and Isuzu Rodeo are produced at this plant. Also, FHI is cooperatively selling Volvo and Porsche through its domestic Subaru sales network. FHI is also manufacturing and selling bus bodies utilizing Volvo's chassis.

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