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Subaru maker sees record April-June profit at 80 billion yen

TOKYO -- Fuji Heavy Industries Ltd., the maker of Subaru cars, likely saw its operating profit climb 15% on the year to about 80 billion yen ($778.6 million) this past quarter, marking a record April-June high.

     Strong North American sales and the weak yen helped the company make up for slow business in Japan.

     Sales for the Forester SUV and other models shot up in North America, where about 60% of the company's cars are sold. Fuji Heavy predicts that full-year sales in the region will grow 11% at 531,000 vehicles, but the numbers appear to be increasing faster than expected.

     The weaker yen also lifted profit. The company exports over 70% of its output, and a drop of one yen against the dollar adds 9.2 billion yen to its annual profit. The rate for April-June was about 102 yen to the dollar, which was 4 yen weaker on the year, seen giving the manufacturer a close to 10 billion yen boost for the quarter. This, combined with cost-cutting measures, more than made up for an expanded budget for research and development as well as sales.

     On the other hand, domestic sales apparently suffered about a 30% drop from slowing demand, a reaction to the surge before the consumption tax hike in April. The delayed release of the Levorg wagon, which was pushed back to late June from the original date in May, also hurt the numbers.

     The company will likely stick to its estimates of a 4% rise in operating profit to 340 billion yen for fiscal 2014.

(Nikkei)

 

 

 

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