Annual Report
2016
For the year ended March 31, 2016
Contents
02 Subaru Story
06 Business Highlights
08 To Our Shareholders
14 Message from our CFO
18 Special Feature
Innovativeness of the Subaru Global
Platform that will Serve as the
Backbone of Next Generation
Automobile Manufacturing
26 Corporate Governance
28 Board Directors / Executive Officers
30 Financial Information
30 Consolidated Ten-Year Financial
Summary
31 Five-Year Automobile Sales
33 Management's Discussion and
Analysis of Results of Operations
and Financial Position
41 Corporate Data / Stock Information
Disclaimer Regarding Forward-Looking Statements
Statements herein concerning plans and strategies, expecta-
tions or projections about the future, FHI’s efforts with regard
to various management issues, and other statements, except
for historical facts, are forward-looking statements. These
forward-looking statements are subject to uncertainties that
could cause actual results to differ materially from those
anticipated. These uncertainties include, but are not limited to,
general economic conditions, demand for and prices of FHI’s
products, FHI’s ability to continue to develop and market
advanced products, raw material prices, and currency
exchange rates. FHI disclaims any obligation to update any
forward-looking statements, whether as a result of new
information, future events, or otherwise.
01
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Subaru Story
Subaru Vehicle Manufacturing that Breathes
Life into “Enjoyment and Peace of Mind”
Enjoyment and peace of mind to everyone:
The unchanging concept built into Subaru vehicles
02
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Subaru Story
Subaru Story
Subaru Vehicle Manufacturing that Breathes
Life into “Enjoyment and Peace of Mind”
Enjoyment and peace of mind to everyone:
The unchanging concept built into Subaru vehicles
Peace of Mind
Subaru has continued to research safety
performance for over half a century since
the introduction of the “Subaru 360.”
One of the most important factors that have formed the identity of
Subaru that was founded as an airplane manufacturer is a high level
of safety performance. For example, the Subaru 360 was the first
to make it possible for four adults to fit comfortably in a mass
production mini vehicles in 1958. The first ever monocoque body in
Japan built by airplane manufacturing know how made spacious
space and high strength a reality. Furthermore, at a time when the
concept of crash safety was not common knowledge, since 1965,
about 30 years before safety standard for frontal collisions started
to be applied, we have run repeated tests and succeeded in
developing a lightweight high-rigidity body. Also, in terms of the
horizontally-opposed engine, based on data obtained in experiments,
structures that are less susceptible to engine intrusion into the cabin
during frontal collision were realized and shock absorbing space was
secured when a pedestrian hit the hood of the vehicle, etc. were
some of the innovations that have been highly rated.
And now, Subaru will continue to pursue advances in safety
03
performance from four angles, “Primary Safety” that is incorporated
in the basic design so that the driver is not easily fatigued and can
concentrate on driving with peace of mind, “Active Safety” with
low center of gravity design and AWD to be able to drive in a wide
variety of weather and road surface conditions, “Pre-Collision
Safety” represented by EyeSight that detects danger and avoids
the damage of a collision, and “Passive Safety” to protect people
from the shocks in the event of a collision.
Subaru’s Safety Concept
Preemptive accident
avoidance
Damage reduction
during an accident
Safe
state
Dangerous
state
Accident
Collision
Damage
spreads
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Subaru Story
Enjoyment
The driving performance of Subaru. It is
at this origin that we find “Human
Centered Automobile Manufacturing”
Enjoyment of the automobile. At the center of this is the
excellence of driving performance for the driver to be able to
operate intuitively. The joy of that motion that is felt at the
moment you step on the accelerator pedal. A car for which
speed, sound, vibration and everything exists to satisfy the
senses of the driver. At the core of this kind of ultimate packaging
is Subaru’s proprietary “Horizontally-opposed (boxer) engine.”
The advantages of superiority in rotational balance, having low
vibration, being lightweight, compact and having a low center of
gravity, it realizes superior handling performance with high driving
stability. In the same way, Subaru’s proprietary “Symmetrical
All-Wheel Drive,” realizes a high level of maneuverability such as
the superior stability that AWD is supposed to have, superior
weight balance and run-through performance regardless of the
road surface, etc. It will arouse the joy of driving.
Subaru also does not stop with keeping the automobile as
simply a means of transport and delivers to every single customer
a richer daily life as we believe that we would like to be a partner
accompanying people through their lives. The enjoyment of life is
as unlimited as there are human beings. Subaru will continue to
meet and exceed the expectations of customers by “Human
Centered Automobile Manufacturing” going forward.
04
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Subaru Story
Subaru Story
Enjoyment
The driving performance of Subaru. It is
at this origin that we find “Human
Centered Automobile Manufacturing”
Enjoyment of the automobile. At the center of this is the
All-Wheel Drive,” realizes a high level of maneuverability such as
excellence of driving performance for the driver to be able to
the superior stability that AWD is supposed to have, superior
operate intuitively. The joy of that motion that is felt at the
weight balance and run-through performance regardless of the
moment you step on the accelerator pedal. A car for which
road surface, etc. It will arouse the joy of driving.
speed, sound, vibration and everything exists to satisfy the
Subaru also does not stop with keeping the automobile as
senses of the driver. At the core of this kind of ultimate packaging
simply a means of transport and delivers to every single customer
is Subaru’s proprietary “Horizontally-opposed (boxer) engine.”
a richer daily life as we believe that we would like to be a partner
The advantages of superiority in rotational balance, having low
accompanying people through their lives. The enjoyment of life is
vibration, being lightweight, compact and having a low center of
as unlimited as there are human beings. Subaru will continue to
gravity, it realizes superior handling performance with high driving
meet and exceed the expectations of customers by “Human
stability. In the same way, Subaru’s proprietary “Symmetrical
Centered Automobile Manufacturing” going forward.
Prominence 2020
In the aim of having a “prominent presence” in customers’ minds,
we pursue our corporate vision to become
“a high-quality company that is not big in size but has distinctive
strength” by focusing on two initiatives — enhancing the
Subaru brand and building a strong business structure.
Enhancing the
Subaru Brand
Building a Strong
Business Structure
Vision for 2020
Corporate Vision
High-quality company that is not big in size but has
distinctive strength
Specific Goals
• No.1 for customer trust
• Brand strength
• Industry-leading high profitability
• Global sales of 1.2 million-plus vehicles
05
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Business Highlights
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31
Financial
Highlights
Net Sales
(Billions of yen)
4,000
3,000
2,000
1,000
1,913.0
1,517.1
3,232.3
2,877.9
2,408.1
Operating Income / Operating Margin
Capital expenses / R&D expenses
Operating Income
Operating Margin
Capital expenses
R&D expenses
(Billions of yen)
600
565.6
(%)
40
12.3
%
UP
33.7
%
UP
450
300
423.0
30
326.5
14.7
13.6
20
17.5
2.8
UP
pt
150
120.4
10
6.3
44.0
2.9
(Billions of yen)
150
135.7
22.6
UP
%
120
90
60
30
0
110.7
102.4
83.5
70.2
68.5
60.1
54.3
48.1
49.1
22.6
UP
%
2012
2013
2014
2015
2016
Free Cash Flow /
Ratio of Shareholders’ Equity to Total Assets
Ratio of Shareholders’ Equity
to Total Assets
Free Cash Flow
(Billions of yen)
400
358.6
(%)
80
158.4
%
UP
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
0
Interest-Bearing Debt Balance
Automobiles sales volume
ROE / ROA
*ROA was calculated as operaing income / (average of assets at the beginning and
end of the term)
ROE
ROA
958
911
825
5.2
UP
%
(Billions of yen)
400
(Thousand units)
1,000
341.0
307.2
269.7
19.5
%
DOWN
211.2
170.0
300
200
100
724
640
800
600
400
200
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
(%)
40
30
20
10
0
06
36.9
7.6
UP
pt
22.9
30.4
29.3
23.6
20.7
18.8
8.9
3.5
8.2
300
279.1
60
51.8
46.5
2.9
UP
pt
37.7
40.5
200
33.3
138.8
95.3
100
28.3
5.3
UP
pt
40
20
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
0
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Business Highlights
Years ended March 31
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
Financial
Highlights
Net Sales
(Billions of yen)
4,000
Operating Income / Operating Margin
Capital expenses / R&D expenses
Operating Income
Operating Margin
Capital expenses
R&D expenses
(Billions of yen)
600
12.3
%
UP
3,232.3
565.6
(%)
40
33.7
%
UP
(Billions of yen)
150
135.7
22.6
%
UP
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
2,877.9
2,408.1
1,913.0
1,517.1
3,000
2,000
1,000
800
600
400
200
423.0
30
326.5
14.7
13.6
20
17.5
2.8
UP
pt
110.7
102.4
83.5
70.2
68.5
60.1
54.3
48.1
49.1
22.6
%
UP
150
120.4
10
6.3
44.0
2.9
120
90
60
30
0
*ROA was calculated as operaing income / (average of assets at the beginning and
ROE / ROA
end of the term)
ROE
ROA
Free Cash Flow /
Ratio of Shareholders’ Equity to Total Assets
Free Cash Flow
Ratio of Shareholders’ Equity
to Total Assets
(Billions of yen)
400
358.6
(%)
80
158.4
%
UP
36.9
7.6
pt
UP
22.9
30.4
29.3
23.6
20.7
18.8
2.9
pt
UP
8.9
3.5
8.2
300
279.1
37.7
40.5
200
33.3
46.5
138.8
60
51.8
40
20
5.3
pt
UP
95.3
100
28.3
450
300
(%)
40
30
20
10
0
(Thousand units)
1,000
724
640
958
911
825
5.2
%
UP
(Billions of yen)
400
341.0
307.2
269.7
300
200
100
19.5
%
DOWN
211.2
170.0
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
0
Business Highlights
Non-Financial
Highlights
EyeSight Accident
Reduction Data
61% reduction
in accident rate
Comparison of rate of accidents
resulting in injury or death with and
without EyeSight (Ver.2)
No. per 10,000 vehicles (over 4 years)
Between vehicles*
* Placed top in frequency
Between people and vehicles
61%
down
51%
down
83%
down
48%
down
41%
down
34%
down
58%
down
52%
down
36 %
down
Without
EyeSight
With
EyeSight
Rear-end
collision
Intersection
collision
Turning
left
Turning
right
Other
Rear/
front
While
crossing road
Other
* Independent calculations from data on accidents that took place over the four years from 2011 – 2014 among vehicles sold between 2010 and 2013 in which installation of EyeSight (Ver. 2) is possible based on
Institute for Traffic Accident Research and Data Analysis (ITARDA) data. There were 2,234 accidents.
* Calculates the number of accidents resulting in injury or death per 10,000 vehicles with and without EyeSight (over four years). Of the target vehicles, there were 246,139 with EyeSight (Ver. 2) and 48,085 without it.
Interest-Bearing Debt Balance
Automobiles sales volume
Global Rollout and Penetration of EyeSight
Europe
Russia
China
Middle East
ASEAN
North America
Japan
Nearly all Subaru models can be equipped with EyeSight.
Installation possible in approximately
90% of models.
(7 out of 8 models)
* Of the Legacy, Levorg, WRX, Impreza, Subaru XV, Forester, Crossover 7, and Subaru BRZ models, installation is possible in all models except Subaru
BRZ.
Australia
Existing markets
Markets targeted
for release
Central and
South America
Large numbers of customers are choosing EyeSight in models that offer it.
*FHI research
Region
EyeSight penetration,
Jan. to Dec. 2015
Japan
83%
Australia
Europe
U.S.
62%
96%
31%
EyeSight highest penetration
(models)
100% of Legacy, Levorg,
WRX, Crossover 7 models
100% of
Legacy models
96% of
Outback models
57% of
Outback models
07
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 To Our Shareholders
Enhancing the Subaru brand through our
value-adding and thorough differentiation
strategies as we aim for sustainable growth.
Yasuyuki Yoshinaga
Representative Director of the Board,
President and CEO
(up 66.7% year on year). FHI recorded its highest historical levels
9.6% year-on-year growth and our first time exceeding one million
of net sales as well as all income categories for the fourth
units. As for consolidated results, we foresee being able to offset
consecutive fiscal year. Additionally, the operating margin was
the increase in overhead costs and R&D expenses by increasing
17.5%. Although the number of passenger vehicles sold in Japan
the number of units sold and further cost reductions. Since the yen
neared the cyclical end of the new-model effect and trailed the
is projected to strengthen from 121 yen/US$ in the fiscal year under
previous year, overseas sales (mainly in the North American
review to 105 yen/US$, we expect consolidated net sales to dip
market) progressed smoothly. Our worldwide sales numbers
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
totaled 957,900 units (up 5.2% year on year), a historical high for
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
the fourth consecutive year. The result of this growth in units
fiscal year net income attributable to owners of parent to fall 32.9%
increase. As for consolidated performance, due to favorable
sold, thanks to robust global support for the Subaru brand,
to 293.0 billion yen, and an operating margin of 13.2%*. We will
foreign exchange rates, the increase in the number of units sold,
allowed us to achieve steady increases in income and profit in
steadily bolster the strength of our business regardless of currency
and cost reductions, we were able to offset the increase in
actual figures excluding gains on foreign exchange, which is
impacts, while maintaining an industry-leading profit margin.
various overhead costs and R&D expenses. Operating profit was
what pleases me most.
565.6 billion yen (up 33.7% year on year), ordinary income came
As for projections for FYE March 2017, we expect the Subaru
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
brand to show continued strength and an increase in units sold in
net income attributable to owners of parent was 436.7 billion yen
North America. We forecast global sales of 1,049.7 thousand units,
08
With regard to consolidated global sales units in FY 2020, we
business model of high profitability and an industry-leading
revised forecasts upward, to top 1,200.0 thousand units from the
operating margin.
original target north of 1,100.0 thousand units, given that
Because we are not comparatively large, our value-adding
on-going sales strength is expected in the favorably performing
and thorough differentiation strategies are indispensable for
North American market. We also reassessed our plans for
competing with the world’s major automobile manufacturers.
increasing production capacity along the same lines. Existing
Consequently, it is vital that we avoid entering the volume-sales
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
In working to be “a high-quality company that is not big in size but
plans had envisioned global production capacity (excluding CKD in
zone in order to grow our sales units. That zone is the specialty of
has distinctive strength”—a stance we outlined in May 2014 in our
Malaysia) of 1,050.0 thousand units (under standard operations)
major automakers and we would eventually be forced to
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
mid-term management vision, “Prominence 2020”—FHI has been
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
compete on price. We believe that it is beneficial to limit our
Industries Ltd. to Subaru Corporation in April 2017, which is the
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
absorption in the event of a collision by 40% compared to current
striving to increase corporate value, while focusing on the two
2018 (under standard operations; 1,276.0 thousand units at
categories and markets to those in which we can leverage our
100th anniversary of the founding of our predecessor, the
to further boost comprehensive performance and safety features,
models. Currently, Subaru models have received top marks in
initiatives of “enhancing the Subaru brand” and “building a strong
maximum operation).
strengths, and to steadily grow our sales units by concentrating
Nakajima Aircraft Company.
pursue characteristic Subaru design, adopt environmentally conscious
safety tests by rating agencies inside and outside Japan,
business structure.”
Furthermore, we announced a new Three-Year Business
our management resources in those areas.
Of course, simply changing the company name and logo
features, improve quality and service, and strengthen communication
including the Japan New Car Assessment Program (JNCAP), the
This fundamental policy has not changed; however, we
Operation/Profit Plan for FYE March 2017-2019. Planned
FHI is ardently pursuing value-adding and differentiation
does not immediately impart greater brand value. Brand value is
with customers.
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
announced updates of our 3-year consolidated profit plan,
three-year totals are 9,800 billion yen in net sales, 1,100 billion
strategies that set us apart from other automakers, while further
something that increases as a result of having customers actually
The Subaru Global Platform, to be adopted starting with the
European New Car Assessment Programme (EuroNCAP), which
consolidated sales units, production plans, etc. in May 2016 in
yen in operating profit, 360.0 billion yen in R&D expenses, and
accelerating our initiatives to “enhance the Subaru brand” and
use our cars and approve of their features and quality. In that
next Impreza model slated for launch this fall, is one of these
has resulted in our greatest competitive strength in the
response to subsequent changes in the business environment and
470.0 billion yen in capital expenditures. While continuing to
“build a strong business structure.”
sense, Subaru cars have garnered high evaluations in recent
activities to “enhance the Subaru brand.” In recent years in the
marketplace. These safety tests continue to apply ever more
sales performance in each market.
expand investment in future growth, we will maintain our current
years from customers and third-party agencies for their safety
automobile industry, companies are eagerly pursuing shared
stringent standards, including new types of collision tests. At
features and drivability.
platforms that serve as the foundation for multiple vehicle
FHI, introduction of the new Subaru Global Platform is further
By using Subaru as a name for both the company and the
models, though most are primarily doing so in order to lower
increasing our collision safety performance and will help us
brand, the Group’s employees will rally together to make Subaru
costs through more efficient new model development, common
maintain the world’s highest levels of safety going forward.
the choice of even more customers and to dedicate effort to
parts, etc. In contrast, FHI is adopting a new platform with the
further boosting the value of the Subaru brand.
central intention of enhancing the Subaru brand strengths of
increase the number of units sold at each dealer. Our sales plan for
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
order to meet sales growth in North America. Production of the
cars per dealer, though somewhere around 750,000 cars should be
Outback model will commence from July 2016, after SIA ends
possible by boosting the per-dealer number to approximately 1,200
consignment production of the Toyota Camry, and we will take
units. In order to provide sales support for our local dealers, we
early steps to relieve supply shortfalls. Also, production capacity
plan to introduce a three-row crossover as a new model in North
at SIA will be expanded nearly twofold—from 200,000 units to
America in 2018.
approximately 400,000 units by the end of 2016.
Local dealers in the U.S., our most important market, have
Meanwhile, our Subaru incentive program was the lowest in
In the U.S. market, all Subaru models equipped with
reported that they could increase sales and seize a 5% market
the industry, approximately $900/vehicle for FYE March 2016,
EyeSight have received top marks in safety evaluations by the
share if our supply were sufficient. In light of our current 3.4%
which is far less expensive than the industry average of around
U.S. rating agency IIHS. This and other factors have solidified an
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
For FHI to achieve sustainable growth into the future, we must
the highly praised EyeSight, our current driving support product
fulfill our corporate role of social responsibility and continue to be
that includes pre-collision safety technology. We are following
a company that constantly earns the trust and support of a broad
this approach to develop automated driving technology that is
group of stakeholders. To that end, it is vital to boost the overall
market share, 5% might be a bit over-optimistic, but I believe 4%
$3,000/vehicle. Considering that incentives are on a growth
image that “Subaru = safety and security,” which I think has led
In addition to the above, the Subaru Global Platform has been
distinctly Subaru technology.
quality of our corporate management to yet another level.
is entirely reasonable. If total vehicle demand in the U.S. is 17
trajectory for the industry as a whole, we forecast a year-on-year
to our current deep-rooted demand. Going forward, we intend of
designed while keeping in mind developments in current gasoline
We plan to actively invest in R&D expenses going forward, in
In the automotive business, we cannot deliver “enjoyment
million cars, that puts us at 680,000 units. If overall demand grows
increase, rising to $1,100 for the full year, for FYE March 2017.
course to provide high quality, safe vehicles, while also striving to
engines and hybrid vehicles (HV), as well as plug-in hybrids
order to accelerate development of these types of environmental
and peace of mind” to customers unless we provide sufficient
slightly, that number could rise to 700,000, so I would first like to
However, we still do not intend to grow sales by competing on
strengthen our service framework enabling us to deliver
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
features and advanced safety technologies. Furthermore, in order
quality, even if our cars are equipped with safety features at the
increase our units sold to equal about a 4% market share in the
price and will continue to sell vehicles with a low incentive
after-sales service that will delight new Subaru customers.
scope of California’s ZEV (Zero Emission Vehicle) regulations will
to optimize management resource allocation throughout the
world’s highest standards. Amid continuing robust sales,
next few years. We are basically not planning to increase the
program going forward.
number of dealers from the current 625 dealers, but rather to
Additionally, we are expanding production capacity at our U.S.
be expanded to include mid-sized automakers (including FHI) in
Group, and to expand development resources in our Automotive
primarily in North America, maximum capacity operations have
2018. To coincide with this timeline, we are proceeding with
Business, we decided to integrate our Industrial Products
become standard operations for each of our production sites in
research and development to launch PHEVs, followed by the
Company into our Automobiles Division in October 2016. Existing
recent years. However, it is absolutely inexcusable for quality
subsequent launch of EVs in 2021. In essence, we are not
production, sales, and service in our Industrial Products Company
control to suffer as production accelerates. Our production units
developing dedicated PHEV and EV models. Our policy is to add
will continue for the duration, though development projects will be
are thoroughly aware of their responsibility to stop the line if they
PHEV and EV grades to our existing cars in the Subaru brand,
idled and management resources such as development personnel
are not absolutely confident in the quality of products.
leveraging
their
characteristic
individuality
and driving
will be shifted to the Automobiles Division.
performance. This approach, I think, will ensure that Subaru’s
Additionally, as society directs
increased attention to
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 To Our Shareholders
To Our Shareholders
Enhancing the Subaru brand through our
value-adding and thorough differentiation
strategies as we aim for sustainable growth.
Yasuyuki Yoshinaga
Representative Director of the Board,
President and CEO
FYE March 2016 Results and FYE March 2017 Outlook
Bolstering our corporate strength,
regardless of currency impacts,
while maintaining an
industry-leading operating margin.
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
increase. As for consolidated performance, due to favorable
increase. As for consolidated performance, due to favorable
foreign exchange rates, the increase in the number of units sold,
foreign exchange rates, the increase in the number of units sold,
and cost reductions, we were able to offset the increase in
and cost reductions, we were able to offset the increase in
various overhead costs and R&D expenses. Operating profit was
various overhead costs and R&D expenses. Operating profit was
565.6 billion yen (up 33.7% year on year), ordinary income came
565.6 billion yen (up 33.7% year on year), ordinary income came
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
net income attributable to owners of parent was 436.7 billion yen
net income attributable to owners of parent was 436.7 billion yen
(up 66.7% year on year). FHI recorded its highest historical levels
(up 66.7% year on year). FHI recorded its highest historical levels
of net sales as well as all income categories for the fourth
of net sales as well as all income categories for the fourth
consecutive fiscal year. Additionally, the operating margin was
consecutive fiscal year. Additionally, the operating margin was
17.5%. Although the number of passenger vehicles sold in Japan
17.5%. Although the number of passenger vehicles sold in Japan
neared the cyclical end of the new-model effect and trailed the
neared the cyclical end of the new-model effect and trailed the
previous year, overseas sales (mainly in the North American
previous year, overseas sales (mainly in the North American
market) progressed smoothly. Our worldwide sales numbers
market) progressed smoothly. Our worldwide sales numbers
totaled 957,900 units (up 5.2% year on year), a historical high for
totaled 957,900 units (up 5.2% year on year), a historical high for
the fourth consecutive year. The result of this growth in units
the fourth consecutive year. The result of this growth in units
sold, thanks to robust global support for the Subaru brand,
sold, thanks to robust global support for the Subaru brand,
allowed us to achieve steady increases in income and profit in
allowed us to achieve steady increases in income and profit in
actual figures excluding gains on foreign exchange, which is
actual figures excluding gains on foreign exchange, which is
what pleases me most.
what pleases me most.
As for projections for FYE March 2017, we expect the Subaru
As for projections for FYE March 2017, we expect the Subaru
brand to show continued strength and an increase in units sold in
brand to show continued strength and an increase in units sold in
North America. We forecast global sales of 1,049.7 thousand units,
North America. We forecast global sales of 1,049.7 thousand units,
9.6% year-on-year growth and our first time exceeding one million
9.6% year-on-year growth and our first time exceeding one million
units. As for consolidated results, we foresee being able to offset
units. As for consolidated results, we foresee being able to offset
the increase in overhead costs and R&D expenses by increasing
the increase in overhead costs and R&D expenses by increasing
the number of units sold and further cost reductions. Since the yen
the number of units sold and further cost reductions. Since the yen
is projected to strengthen from 121 yen/US$ in the fiscal year under
is projected to strengthen from 121 yen/US$ in the fiscal year under
review to 105 yen/US$, we expect consolidated net sales to dip
review to 105 yen/US$, we expect consolidated net sales to dip
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
fiscal year net income attributable to owners of parent to fall 32.9%
fiscal year net income attributable to owners of parent to fall 32.9%
to 293.0 billion yen, and an operating margin of 13.2%*. We will
to 293.0 billion yen, and an operating margin of 13.2%*. We will
steadily bolster the strength of our business regardless of currency
steadily bolster the strength of our business regardless of currency
impacts, while maintaining an industry-leading profit margin.
impacts, while maintaining an industry-leading profit margin.
*Figures in projections for FYE March 2017 were announced May 12,
2016, then revised August 3, 2016.
For details, please see the Company website
(http://www.fhi.co.jp/english/ir/index.html).
Net Sales
Years ended March 31
(Billions of yen)
3,600
3,232.3
3,170.0
2,877.9
2,408.1
2,400
1,200
Operating Income / Operating Margin
Years ended March 31
Operating Margin
565.6
17.5
420.0
13.2
Operating Income
(Billions of yen)
600
423.0
14.7
13.6
326.5
400
200
0
2014
2015
2016
2017
*
(Planned)
0
2014
2015
2016
2017
*
(Planned)
09
(%)
20
15
10
5
0
With regard to consolidated global sales units in FY 2020, we
With regard to consolidated global sales units in FY 2020, we
business model of high profitability and an industry-leading
business model of high profitability and an industry-leading
revised forecasts upward, to top 1,200.0 thousand units from the
revised forecasts upward, to top 1,200.0 thousand units from the
operating margin.
operating margin.
original target north of 1,100.0 thousand units, given that
original target north of 1,100.0 thousand units, given that
Because we are not comparatively large, our value-adding
Because we are not comparatively large, our value-adding
on-going sales strength is expected in the favorably performing
on-going sales strength is expected in the favorably performing
and thorough differentiation strategies are indispensable for
and thorough differentiation strategies are indispensable for
North American market. We also reassessed our plans for
North American market. We also reassessed our plans for
competing with the world’s major automobile manufacturers.
competing with the world’s major automobile manufacturers.
increasing production capacity along the same lines. Existing
increasing production capacity along the same lines. Existing
Consequently, it is vital that we avoid entering the volume-sales
Consequently, it is vital that we avoid entering the volume-sales
safety features and drivability.
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
In addition, the new platform increases impact energy
In working to be “a high-quality company that is not big in size but
In working to be “a high-quality company that is not big in size but
plans had envisioned global production capacity (excluding CKD in
plans had envisioned global production capacity (excluding CKD in
zone in order to grow our sales units. That zone is the specialty of
zone in order to grow our sales units. That zone is the specialty of
has distinctive strength”—a stance we outlined in May 2014 in our
has distinctive strength”—a stance we outlined in May 2014 in our
Malaysia) of 1,050.0 thousand units (under standard operations)
Malaysia) of 1,050.0 thousand units (under standard operations)
major automakers and we would eventually be forced to
major automakers and we would eventually be forced to
As one of our measures to accelerate our “enhancing the Subaru
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
brand” initiative, we will change our name from Fuji Heavy
mid-term management vision, “Prominence 2020”—FHI has been
mid-term management vision, “Prominence 2020”—FHI has been
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
compete on price. We believe that it is beneficial to limit our
compete on price. We believe that it is beneficial to limit our
Industries Ltd. to Subaru Corporation in April 2017, which is the
Industries Ltd. to Subaru Corporation in April 2017, which is the
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
absorption in the event of a collision by 40% compared to current
absorption in the event of a collision by 40% compared to current
striving to increase corporate value, while focusing on the two
striving to increase corporate value, while focusing on the two
2018 (under standard operations; 1,276.0 thousand units at
2018 (under standard operations; 1,276.0 thousand units at
categories and markets to those in which we can leverage our
categories and markets to those in which we can leverage our
100th anniversary of the founding of our predecessor, the
100th anniversary of the founding of our predecessor, the
to further boost comprehensive performance and safety features,
to further boost comprehensive performance and safety features,
models. Currently, Subaru models have received top marks in
models. Currently, Subaru models have received top marks in
initiatives of “enhancing the Subaru brand” and “building a strong
initiatives of “enhancing the Subaru brand” and “building a strong
maximum operation).
maximum operation).
strengths, and to steadily grow our sales units by concentrating
strengths, and to steadily grow our sales units by concentrating
Nakajima Aircraft Company.
Nakajima Aircraft Company.
pursue characteristic Subaru design, adopt environmentally conscious
pursue characteristic Subaru design, adopt environmentally conscious
safety tests by rating agencies inside and outside Japan,
safety tests by rating agencies inside and outside Japan,
business structure.”
business structure.”
Furthermore, we announced a new Three-Year Business
Furthermore, we announced a new Three-Year Business
our management resources in those areas.
our management resources in those areas.
Of course, simply changing the company name and logo
Of course, simply changing the company name and logo
features, improve quality and service, and strengthen communication
features, improve quality and service, and strengthen communication
including the Japan New Car Assessment Program (JNCAP), the
including the Japan New Car Assessment Program (JNCAP), the
This fundamental policy has not changed; however, we
This fundamental policy has not changed; however, we
Operation/Profit Plan for FYE March 2017-2019. Planned
Operation/Profit Plan for FYE March 2017-2019. Planned
FHI is ardently pursuing value-adding and differentiation
FHI is ardently pursuing value-adding and differentiation
does not immediately impart greater brand value. Brand value is
does not immediately impart greater brand value. Brand value is
with customers.
with customers.
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
announced updates of our 3-year consolidated profit plan,
announced updates of our 3-year consolidated profit plan,
three-year totals are 9,800 billion yen in net sales, 1,100 billion
three-year totals are 9,800 billion yen in net sales, 1,100 billion
strategies that set us apart from other automakers, while further
strategies that set us apart from other automakers, while further
something that increases as a result of having customers actually
something that increases as a result of having customers actually
The Subaru Global Platform, to be adopted starting with the
The Subaru Global Platform, to be adopted starting with the
European New Car Assessment Programme (EuroNCAP), which
European New Car Assessment Programme (EuroNCAP), which
consolidated sales units, production plans, etc. in May 2016 in
consolidated sales units, production plans, etc. in May 2016 in
yen in operating profit, 360.0 billion yen in R&D expenses, and
yen in operating profit, 360.0 billion yen in R&D expenses, and
accelerating our initiatives to “enhance the Subaru brand” and
accelerating our initiatives to “enhance the Subaru brand” and
use our cars and approve of their features and quality. In that
use our cars and approve of their features and quality. In that
next Impreza model slated for launch this fall, is one of these
next Impreza model slated for launch this fall, is one of these
has resulted in our greatest competitive strength in the
has resulted in our greatest competitive strength in the
response to subsequent changes in the business environment and
response to subsequent changes in the business environment and
470.0 billion yen in capital expenditures. While continuing to
470.0 billion yen in capital expenditures. While continuing to
“build a strong business structure.”
“build a strong business structure.”
sense, Subaru cars have garnered high evaluations in recent
sense, Subaru cars have garnered high evaluations in recent
activities to “enhance the Subaru brand.” In recent years in the
activities to “enhance the Subaru brand.” In recent years in the
marketplace. These safety tests continue to apply ever more
marketplace. These safety tests continue to apply ever more
sales performance in each market.
sales performance in each market.
expand investment in future growth, we will maintain our current
expand investment in future growth, we will maintain our current
years from customers and third-party agencies for their safety
years from customers and third-party agencies for their safety
automobile industry, companies are eagerly pursuing shared
automobile industry, companies are eagerly pursuing shared
stringent standards, including new types of collision tests. At
stringent standards, including new types of collision tests. At
features and drivability.
features and drivability.
platforms that serve as the foundation for multiple vehicle
platforms that serve as the foundation for multiple vehicle
FHI, introduction of the new Subaru Global Platform is further
FHI, introduction of the new Subaru Global Platform is further
By using Subaru as a name for both the company and the
By using Subaru as a name for both the company and the
models, though most are primarily doing so in order to lower
models, though most are primarily doing so in order to lower
increasing our collision safety performance and will help us
increasing our collision safety performance and will help us
brand, the Group’s employees will rally together to make Subaru
brand, the Group’s employees will rally together to make Subaru
costs through more efficient new model development, common
costs through more efficient new model development, common
maintain the world’s highest levels of safety going forward.
maintain the world’s highest levels of safety going forward.
the choice of even more customers and to dedicate effort to
the choice of even more customers and to dedicate effort to
parts, etc. In contrast, FHI is adopting a new platform with the
parts, etc. In contrast, FHI is adopting a new platform with the
further boosting the value of the Subaru brand.
further boosting the value of the Subaru brand.
central intention of enhancing the Subaru brand strengths of
central intention of enhancing the Subaru brand strengths of
increase the number of units sold at each dealer. Our sales plan for
increase the number of units sold at each dealer. Our sales plan for
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
order to meet sales growth in North America. Production of the
order to meet sales growth in North America. Production of the
cars per dealer, though somewhere around 750,000 cars should be
cars per dealer, though somewhere around 750,000 cars should be
Outback model will commence from July 2016, after SIA ends
Outback model will commence from July 2016, after SIA ends
possible by boosting the per-dealer number to approximately 1,200
possible by boosting the per-dealer number to approximately 1,200
consignment production of the Toyota Camry, and we will take
consignment production of the Toyota Camry, and we will take
units. In order to provide sales support for our local dealers, we
units. In order to provide sales support for our local dealers, we
early steps to relieve supply shortfalls. Also, production capacity
early steps to relieve supply shortfalls. Also, production capacity
plan to introduce a three-row crossover as a new model in North
plan to introduce a three-row crossover as a new model in North
at SIA will be expanded nearly twofold—from 200,000 units to
at SIA will be expanded nearly twofold—from 200,000 units to
America in 2018.
America in 2018.
approximately 400,000 units by the end of 2016.
approximately 400,000 units by the end of 2016.
Local dealers in the U.S., our most important market, have
Local dealers in the U.S., our most important market, have
Meanwhile, our Subaru incentive program was the lowest in
Meanwhile, our Subaru incentive program was the lowest in
In the U.S. market, all Subaru models equipped with
In the U.S. market, all Subaru models equipped with
reported that they could increase sales and seize a 5% market
reported that they could increase sales and seize a 5% market
the industry, approximately $900/vehicle for FYE March 2016,
the industry, approximately $900/vehicle for FYE March 2016,
EyeSight have received top marks in safety evaluations by the
EyeSight have received top marks in safety evaluations by the
share if our supply were sufficient. In light of our current 3.4%
share if our supply were sufficient. In light of our current 3.4%
which is far less expensive than the industry average of around
which is far less expensive than the industry average of around
U.S. rating agency IIHS. This and other factors have solidified an
U.S. rating agency IIHS. This and other factors have solidified an
quintessential “enjoyment and peace of mind” will be imbued in
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
a new generation of eco-cars.
At the same time, we are also making steady inroads with
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
this fundamental perspective, we are pushing the evolution of
For FHI to achieve sustainable growth into the future, we must
For FHI to achieve sustainable growth into the future, we must
the highly praised EyeSight, our current driving support product
the highly praised EyeSight, our current driving support product
fulfill our corporate role of social responsibility and continue to be
fulfill our corporate role of social responsibility and continue to be
that includes pre-collision safety technology. We are following
that includes pre-collision safety technology. We are following
a company that constantly earns the trust and support of a broad
a company that constantly earns the trust and support of a broad
this approach to develop automated driving technology that is
this approach to develop automated driving technology that is
group of stakeholders. To that end, it is vital to boost the overall
group of stakeholders. To that end, it is vital to boost the overall
market share, 5% might be a bit over-optimistic, but I believe 4%
market share, 5% might be a bit over-optimistic, but I believe 4%
$3,000/vehicle. Considering that incentives are on a growth
$3,000/vehicle. Considering that incentives are on a growth
image that “Subaru = safety and security,” which I think has led
image that “Subaru = safety and security,” which I think has led
In addition to the above, the Subaru Global Platform has been
In addition to the above, the Subaru Global Platform has been
distinctly Subaru technology.
distinctly Subaru technology.
quality of our corporate management to yet another level.
quality of our corporate management to yet another level.
is entirely reasonable. If total vehicle demand in the U.S. is 17
is entirely reasonable. If total vehicle demand in the U.S. is 17
trajectory for the industry as a whole, we forecast a year-on-year
trajectory for the industry as a whole, we forecast a year-on-year
to our current deep-rooted demand. Going forward, we intend of
to our current deep-rooted demand. Going forward, we intend of
designed while keeping in mind developments in current gasoline
designed while keeping in mind developments in current gasoline
We plan to actively invest in R&D expenses going forward, in
We plan to actively invest in R&D expenses going forward, in
In the automotive business, we cannot deliver “enjoyment
In the automotive business, we cannot deliver “enjoyment
million cars, that puts us at 680,000 units. If overall demand grows
million cars, that puts us at 680,000 units. If overall demand grows
increase, rising to $1,100 for the full year, for FYE March 2017.
increase, rising to $1,100 for the full year, for FYE March 2017.
course to provide high quality, safe vehicles, while also striving to
course to provide high quality, safe vehicles, while also striving to
engines and hybrid vehicles (HV), as well as plug-in hybrids
engines and hybrid vehicles (HV), as well as plug-in hybrids
order to accelerate development of these types of environmental
order to accelerate development of these types of environmental
and peace of mind” to customers unless we provide sufficient
and peace of mind” to customers unless we provide sufficient
slightly, that number could rise to 700,000, so I would first like to
slightly, that number could rise to 700,000, so I would first like to
However, we still do not intend to grow sales by competing on
However, we still do not intend to grow sales by competing on
strengthen our service framework enabling us to deliver
strengthen our service framework enabling us to deliver
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
features and advanced safety technologies. Furthermore, in order
features and advanced safety technologies. Furthermore, in order
quality, even if our cars are equipped with safety features at the
quality, even if our cars are equipped with safety features at the
increase our units sold to equal about a 4% market share in the
increase our units sold to equal about a 4% market share in the
price and will continue to sell vehicles with a low incentive
price and will continue to sell vehicles with a low incentive
after-sales service that will delight new Subaru customers.
after-sales service that will delight new Subaru customers.
scope of California’s ZEV (Zero Emission Vehicle) regulations will
scope of California’s ZEV (Zero Emission Vehicle) regulations will
to optimize management resource allocation throughout the
to optimize management resource allocation throughout the
world’s highest standards. Amid continuing robust sales,
world’s highest standards. Amid continuing robust sales,
next few years. We are basically not planning to increase the
next few years. We are basically not planning to increase the
program going forward.
program going forward.
number of dealers from the current 625 dealers, but rather to
number of dealers from the current 625 dealers, but rather to
Additionally, we are expanding production capacity at our U.S.
Additionally, we are expanding production capacity at our U.S.
be expanded to include mid-sized automakers (including FHI) in
be expanded to include mid-sized automakers (including FHI) in
Group, and to expand development resources in our Automotive
Group, and to expand development resources in our Automotive
primarily in North America, maximum capacity operations have
primarily in North America, maximum capacity operations have
2018. To coincide with this timeline, we are proceeding with
2018. To coincide with this timeline, we are proceeding with
Business, we decided to integrate our Industrial Products
Business, we decided to integrate our Industrial Products
become standard operations for each of our production sites in
become standard operations for each of our production sites in
research and development to launch PHEVs, followed by the
research and development to launch PHEVs, followed by the
Company into our Automobiles Division in October 2016. Existing
Company into our Automobiles Division in October 2016. Existing
recent years. However, it is absolutely inexcusable for quality
recent years. However, it is absolutely inexcusable for quality
subsequent launch of EVs in 2021. In essence, we are not
subsequent launch of EVs in 2021. In essence, we are not
production, sales, and service in our Industrial Products Company
production, sales, and service in our Industrial Products Company
control to suffer as production accelerates. Our production units
control to suffer as production accelerates. Our production units
developing dedicated PHEV and EV models. Our policy is to add
developing dedicated PHEV and EV models. Our policy is to add
will continue for the duration, though development projects will be
will continue for the duration, though development projects will be
are thoroughly aware of their responsibility to stop the line if they
are thoroughly aware of their responsibility to stop the line if they
PHEV and EV grades to our existing cars in the Subaru brand,
PHEV and EV grades to our existing cars in the Subaru brand,
idled and management resources such as development personnel
idled and management resources such as development personnel
are not absolutely confident in the quality of products.
are not absolutely confident in the quality of products.
leveraging
leveraging
their
their
characteristic
characteristic
individuality
individuality
and driving
and driving
will be shifted to the Automobiles Division.
will be shifted to the Automobiles Division.
performance. This approach, I think, will ensure that Subaru’s
performance. This approach, I think, will ensure that Subaru’s
Additionally, as society directs
Additionally, as society directs
increased attention to
increased attention to
corporate governance, FHI has been incorporating outside
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
Thank you for your support and feedback going forward.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 (up 66.7% year on year). FHI recorded its highest historical levels
9.6% year-on-year growth and our first time exceeding one million
of net sales as well as all income categories for the fourth
units. As for consolidated results, we foresee being able to offset
consecutive fiscal year. Additionally, the operating margin was
the increase in overhead costs and R&D expenses by increasing
17.5%. Although the number of passenger vehicles sold in Japan
the number of units sold and further cost reductions. Since the yen
neared the cyclical end of the new-model effect and trailed the
is projected to strengthen from 121 yen/US$ in the fiscal year under
previous year, overseas sales (mainly in the North American
review to 105 yen/US$, we expect consolidated net sales to dip
market) progressed smoothly. Our worldwide sales numbers
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
totaled 957,900 units (up 5.2% year on year), a historical high for
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
the fourth consecutive year. The result of this growth in units
fiscal year net income attributable to owners of parent to fall 32.9%
increase. As for consolidated performance, due to favorable
sold, thanks to robust global support for the Subaru brand,
to 293.0 billion yen, and an operating margin of 13.2%*. We will
foreign exchange rates, the increase in the number of units sold,
allowed us to achieve steady increases in income and profit in
steadily bolster the strength of our business regardless of currency
and cost reductions, we were able to offset the increase in
actual figures excluding gains on foreign exchange, which is
impacts, while maintaining an industry-leading profit margin.
various overhead costs and R&D expenses. Operating profit was
what pleases me most.
565.6 billion yen (up 33.7% year on year), ordinary income came
As for projections for FYE March 2017, we expect the Subaru
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
brand to show continued strength and an increase in units sold in
net income attributable to owners of parent was 436.7 billion yen
North America. We forecast global sales of 1,049.7 thousand units,
To Our Shareholders
Update on the Mid-Term Management Vision
2020 global sales units revised
upward in line with favorable sales
in the North American market.
In working to be “a high-quality company that is not big in size but
has distinctive strength”—a stance we outlined in May 2014 in our
mid-term management vision, “Prominence 2020”—FHI has been
striving to increase corporate value, while focusing on the two
initiatives of “enhancing the Subaru brand” and “building a strong
business structure.”
This fundamental policy has not changed; however, we
announced updates of our 3-year consolidated profit plan,
consolidated sales units, production plans, etc. in May 2016 in
response to subsequent changes in the business environment and
sales performance in each market.
With regard to consolidated global sales units in FY 2020, we
revised forecasts upward, to top 1,200.0 thousand units from the
original target north of 1,100.0 thousand units, given that
on-going sales strength is expected in the favorably performing
North American market. We also reassessed our plans for
increasing production capacity along the same lines. Existing
plans had envisioned global production capacity (excluding CKD in
Malaysia) of 1,050.0 thousand units (under standard operations)
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
2018 (under standard operations; 1,276.0 thousand units at
maximum operation).
Furthermore, we announced a new Three-Year Business
Operation/Profit Plan for FYE March 2017-2019. Planned
three-year totals are 9,800 billion yen in net sales, 1,100 billion
yen in operating profit, 360.0 billion yen in R&D expenses, and
470.0 billion yen in capital expenditures. While continuing to
expand investment in future growth, we will maintain our current
business model of high profitability and an industry-leading
operating margin.
Because we are not comparatively large, our value-adding
and thorough differentiation strategies are indispensable for
competing with the world’s major automobile manufacturers.
Consequently, it is vital that we avoid entering the volume-sales
zone in order to grow our sales units. That zone is the specialty of
major automakers and we would eventually be forced to
compete on price. We believe that it is beneficial to limit our
categories and markets to those in which we can leverage our
strengths, and to steadily grow our sales units by concentrating
our management resources in those areas.
FHI is ardently pursuing value-adding and differentiation
strategies that set us apart from other automakers, while further
accelerating our initiatives to “enhance the Subaru brand” and
“build a strong business structure.”
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
Industries Ltd. to Subaru Corporation in April 2017, which is the
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
absorption in the event of a collision by 40% compared to current
100th anniversary of the founding of our predecessor, the
to further boost comprehensive performance and safety features,
models. Currently, Subaru models have received top marks in
Nakajima Aircraft Company.
pursue characteristic Subaru design, adopt environmentally conscious
safety tests by rating agencies inside and outside Japan,
Of course, simply changing the company name and logo
features, improve quality and service, and strengthen communication
including the Japan New Car Assessment Program (JNCAP), the
does not immediately impart greater brand value. Brand value is
with customers.
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
something that increases as a result of having customers actually
The Subaru Global Platform, to be adopted starting with the
European New Car Assessment Programme (EuroNCAP), which
use our cars and approve of their features and quality. In that
next Impreza model slated for launch this fall, is one of these
has resulted in our greatest competitive strength in the
sense, Subaru cars have garnered high evaluations in recent
activities to “enhance the Subaru brand.” In recent years in the
marketplace. These safety tests continue to apply ever more
years from customers and third-party agencies for their safety
automobile industry, companies are eagerly pursuing shared
stringent standards, including new types of collision tests. At
features and drivability.
platforms that serve as the foundation for multiple vehicle
FHI, introduction of the new Subaru Global Platform is further
By using Subaru as a name for both the company and the
models, though most are primarily doing so in order to lower
increasing our collision safety performance and will help us
brand, the Group’s employees will rally together to make Subaru
costs through more efficient new model development, common
maintain the world’s highest levels of safety going forward.
the choice of even more customers and to dedicate effort to
parts, etc. In contrast, FHI is adopting a new platform with the
further boosting the value of the Subaru brand.
central intention of enhancing the Subaru brand strengths of
Consolidated unit sales
North America
Japan
China
Other
(1,000 units)
1,200
1,050
149
49
156
958
138
44
145
911
124
54
163
800
400
1,200+α
200
50
150
200
570
630
696
800+α
500
Production capacity expansion plans
Yajima Plant (Japan)
Main Plant (Japan)
SIA (USA)
(1,000 units)
1,500
Production capacity
at full operation:
1,276 thousand units
1,132
1,000
836
854
200
207
218
207
429
429
1,036
394
213
429
436
213
483
0
2014
(Actual)
2015
(Actual)
2016
(Planned)
2020
(Forecast)
(FY)
0
Sept. 2015
Spring 2016
2016 year end
(Planned)
FY 2019
(Planned)
10
increase the number of units sold at each dealer. Our sales plan for
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
order to meet sales growth in North America. Production of the
cars per dealer, though somewhere around 750,000 cars should be
Outback model will commence from July 2016, after SIA ends
possible by boosting the per-dealer number to approximately 1,200
consignment production of the Toyota Camry, and we will take
units. In order to provide sales support for our local dealers, we
early steps to relieve supply shortfalls. Also, production capacity
plan to introduce a three-row crossover as a new model in North
at SIA will be expanded nearly twofold—from 200,000 units to
America in 2018.
approximately 400,000 units by the end of 2016.
Local dealers in the U.S., our most important market, have
Meanwhile, our Subaru incentive program was the lowest in
In the U.S. market, all Subaru models equipped with
reported that they could increase sales and seize a 5% market
the industry, approximately $900/vehicle for FYE March 2016,
EyeSight have received top marks in safety evaluations by the
share if our supply were sufficient. In light of our current 3.4%
which is far less expensive than the industry average of around
U.S. rating agency IIHS. This and other factors have solidified an
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
For FHI to achieve sustainable growth into the future, we must
the highly praised EyeSight, our current driving support product
fulfill our corporate role of social responsibility and continue to be
that includes pre-collision safety technology. We are following
a company that constantly earns the trust and support of a broad
this approach to develop automated driving technology that is
group of stakeholders. To that end, it is vital to boost the overall
market share, 5% might be a bit over-optimistic, but I believe 4%
$3,000/vehicle. Considering that incentives are on a growth
image that “Subaru = safety and security,” which I think has led
In addition to the above, the Subaru Global Platform has been
distinctly Subaru technology.
quality of our corporate management to yet another level.
is entirely reasonable. If total vehicle demand in the U.S. is 17
trajectory for the industry as a whole, we forecast a year-on-year
to our current deep-rooted demand. Going forward, we intend of
designed while keeping in mind developments in current gasoline
We plan to actively invest in R&D expenses going forward, in
In the automotive business, we cannot deliver “enjoyment
million cars, that puts us at 680,000 units. If overall demand grows
increase, rising to $1,100 for the full year, for FYE March 2017.
course to provide high quality, safe vehicles, while also striving to
engines and hybrid vehicles (HV), as well as plug-in hybrids
order to accelerate development of these types of environmental
and peace of mind” to customers unless we provide sufficient
slightly, that number could rise to 700,000, so I would first like to
However, we still do not intend to grow sales by competing on
strengthen our service framework enabling us to deliver
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
features and advanced safety technologies. Furthermore, in order
quality, even if our cars are equipped with safety features at the
increase our units sold to equal about a 4% market share in the
price and will continue to sell vehicles with a low incentive
after-sales service that will delight new Subaru customers.
scope of California’s ZEV (Zero Emission Vehicle) regulations will
to optimize management resource allocation throughout the
world’s highest standards. Amid continuing robust sales,
next few years. We are basically not planning to increase the
program going forward.
number of dealers from the current 625 dealers, but rather to
Additionally, we are expanding production capacity at our U.S.
be expanded to include mid-sized automakers (including FHI) in
Group, and to expand development resources in our Automotive
primarily in North America, maximum capacity operations have
2018. To coincide with this timeline, we are proceeding with
Business, we decided to integrate our Industrial Products
become standard operations for each of our production sites in
research and development to launch PHEVs, followed by the
Company into our Automobiles Division in October 2016. Existing
recent years. However, it is absolutely inexcusable for quality
subsequent launch of EVs in 2021. In essence, we are not
production, sales, and service in our Industrial Products Company
control to suffer as production accelerates. Our production units
developing dedicated PHEV and EV models. Our policy is to add
will continue for the duration, though development projects will be
are thoroughly aware of their responsibility to stop the line if they
PHEV and EV grades to our existing cars in the Subaru brand,
idled and management resources such as development personnel
are not absolutely confident in the quality of products.
leveraging
their
characteristic
individuality
and driving
will be shifted to the Automobiles Division.
performance. This approach, I think, will ensure that Subaru’s
Additionally, as society directs
increased attention to
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 (up 66.7% year on year). FHI recorded its highest historical levels
(up 66.7% year on year). FHI recorded its highest historical levels
9.6% year-on-year growth and our first time exceeding one million
9.6% year-on-year growth and our first time exceeding one million
of net sales as well as all income categories for the fourth
of net sales as well as all income categories for the fourth
units. As for consolidated results, we foresee being able to offset
units. As for consolidated results, we foresee being able to offset
consecutive fiscal year. Additionally, the operating margin was
consecutive fiscal year. Additionally, the operating margin was
the increase in overhead costs and R&D expenses by increasing
the increase in overhead costs and R&D expenses by increasing
17.5%. Although the number of passenger vehicles sold in Japan
17.5%. Although the number of passenger vehicles sold in Japan
the number of units sold and further cost reductions. Since the yen
the number of units sold and further cost reductions. Since the yen
neared the cyclical end of the new-model effect and trailed the
neared the cyclical end of the new-model effect and trailed the
is projected to strengthen from 121 yen/US$ in the fiscal year under
is projected to strengthen from 121 yen/US$ in the fiscal year under
previous year, overseas sales (mainly in the North American
previous year, overseas sales (mainly in the North American
review to 105 yen/US$, we expect consolidated net sales to dip
review to 105 yen/US$, we expect consolidated net sales to dip
market) progressed smoothly. Our worldwide sales numbers
market) progressed smoothly. Our worldwide sales numbers
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
totaled 957,900 units (up 5.2% year on year), a historical high for
totaled 957,900 units (up 5.2% year on year), a historical high for
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
the fourth consecutive year. The result of this growth in units
the fourth consecutive year. The result of this growth in units
fiscal year net income attributable to owners of parent to fall 32.9%
fiscal year net income attributable to owners of parent to fall 32.9%
increase. As for consolidated performance, due to favorable
increase. As for consolidated performance, due to favorable
sold, thanks to robust global support for the Subaru brand,
sold, thanks to robust global support for the Subaru brand,
to 293.0 billion yen, and an operating margin of 13.2%*. We will
to 293.0 billion yen, and an operating margin of 13.2%*. We will
foreign exchange rates, the increase in the number of units sold,
foreign exchange rates, the increase in the number of units sold,
allowed us to achieve steady increases in income and profit in
allowed us to achieve steady increases in income and profit in
steadily bolster the strength of our business regardless of currency
steadily bolster the strength of our business regardless of currency
and cost reductions, we were able to offset the increase in
and cost reductions, we were able to offset the increase in
actual figures excluding gains on foreign exchange, which is
actual figures excluding gains on foreign exchange, which is
impacts, while maintaining an industry-leading profit margin.
impacts, while maintaining an industry-leading profit margin.
various overhead costs and R&D expenses. Operating profit was
various overhead costs and R&D expenses. Operating profit was
what pleases me most.
what pleases me most.
565.6 billion yen (up 33.7% year on year), ordinary income came
565.6 billion yen (up 33.7% year on year), ordinary income came
As for projections for FYE March 2017, we expect the Subaru
As for projections for FYE March 2017, we expect the Subaru
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
brand to show continued strength and an increase in units sold in
brand to show continued strength and an increase in units sold in
net income attributable to owners of parent was 436.7 billion yen
net income attributable to owners of parent was 436.7 billion yen
North America. We forecast global sales of 1,049.7 thousand units,
North America. We forecast global sales of 1,049.7 thousand units,
To Our Shareholders
To Our Shareholders
Update on the Mid-Term Management Vision
With regard to consolidated global sales units in FY 2020, we
With regard to consolidated global sales units in FY 2020, we
business model of high profitability and an industry-leading
business model of high profitability and an industry-leading
2020 global sales units revised
upward in line with favorable sales
in the North American market.
revised forecasts upward, to top 1,200.0 thousand units from the
revised forecasts upward, to top 1,200.0 thousand units from the
operating margin.
operating margin.
original target north of 1,100.0 thousand units, given that
original target north of 1,100.0 thousand units, given that
Because we are not comparatively large, our value-adding
Because we are not comparatively large, our value-adding
on-going sales strength is expected in the favorably performing
on-going sales strength is expected in the favorably performing
and thorough differentiation strategies are indispensable for
and thorough differentiation strategies are indispensable for
North American market. We also reassessed our plans for
North American market. We also reassessed our plans for
competing with the world’s major automobile manufacturers.
competing with the world’s major automobile manufacturers.
increasing production capacity along the same lines. Existing
increasing production capacity along the same lines. Existing
Consequently, it is vital that we avoid entering the volume-sales
Consequently, it is vital that we avoid entering the volume-sales
In working to be “a high-quality company that is not big in size but
In working to be “a high-quality company that is not big in size but
plans had envisioned global production capacity (excluding CKD in
plans had envisioned global production capacity (excluding CKD in
zone in order to grow our sales units. That zone is the specialty of
zone in order to grow our sales units. That zone is the specialty of
has distinctive strength”—a stance we outlined in May 2014 in our
has distinctive strength”—a stance we outlined in May 2014 in our
Malaysia) of 1,050.0 thousand units (under standard operations)
Malaysia) of 1,050.0 thousand units (under standard operations)
major automakers and we would eventually be forced to
major automakers and we would eventually be forced to
mid-term management vision, “Prominence 2020”—FHI has been
mid-term management vision, “Prominence 2020”—FHI has been
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
compete on price. We believe that it is beneficial to limit our
compete on price. We believe that it is beneficial to limit our
striving to increase corporate value, while focusing on the two
striving to increase corporate value, while focusing on the two
2018 (under standard operations; 1,276.0 thousand units at
2018 (under standard operations; 1,276.0 thousand units at
categories and markets to those in which we can leverage our
categories and markets to those in which we can leverage our
initiatives of “enhancing the Subaru brand” and “building a strong
initiatives of “enhancing the Subaru brand” and “building a strong
maximum operation).
maximum operation).
strengths, and to steadily grow our sales units by concentrating
strengths, and to steadily grow our sales units by concentrating
business structure.”
business structure.”
Furthermore, we announced a new Three-Year Business
Furthermore, we announced a new Three-Year Business
our management resources in those areas.
our management resources in those areas.
This fundamental policy has not changed; however, we
This fundamental policy has not changed; however, we
Operation/Profit Plan for FYE March 2017-2019. Planned
Operation/Profit Plan for FYE March 2017-2019. Planned
FHI is ardently pursuing value-adding and differentiation
FHI is ardently pursuing value-adding and differentiation
announced updates of our 3-year consolidated profit plan,
announced updates of our 3-year consolidated profit plan,
three-year totals are 9,800 billion yen in net sales, 1,100 billion
three-year totals are 9,800 billion yen in net sales, 1,100 billion
strategies that set us apart from other automakers, while further
strategies that set us apart from other automakers, while further
consolidated sales units, production plans, etc. in May 2016 in
consolidated sales units, production plans, etc. in May 2016 in
yen in operating profit, 360.0 billion yen in R&D expenses, and
yen in operating profit, 360.0 billion yen in R&D expenses, and
accelerating our initiatives to “enhance the Subaru brand” and
accelerating our initiatives to “enhance the Subaru brand” and
response to subsequent changes in the business environment and
response to subsequent changes in the business environment and
470.0 billion yen in capital expenditures. While continuing to
470.0 billion yen in capital expenditures. While continuing to
“build a strong business structure.”
“build a strong business structure.”
sales performance in each market.
sales performance in each market.
expand investment in future growth, we will maintain our current
expand investment in future growth, we will maintain our current
Consolidated unit sales
North America
Japan
China
Other
(1,000 units)
1,200
Production capacity expansion plans
Yajima Plant (Japan)
Main Plant (Japan)
SIA (USA)
(1,000 units)
1,500
1,200+α
200
50
150
1,050
149
49
156
958
138
44
145
911
124
54
163
800
400
200
570
630
696
800+α
500
1,000
836
854
200
207
218
207
429
429
Production capacity
at full operation:
1,276 thousand units
1,132
1,036
394
213
429
436
213
483
0
2014
(Actual)
2015
(Actual)
2016
(Planned)
2020
(Forecast)
(FY)
0
Sept. 2015
Spring 2016
2016 year end
(Planned)
FY 2019
(Planned)
Changing Our Company Name in April 2017
Rallying all of our employees to
enhance the brand under a new
company name: Subaru Corporation.
As one of our measures to accelerate our “enhancing the Subaru
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
brand” initiative, we will change our name from Fuji Heavy
Industries Ltd. to Subaru Corporation in April 2017, which is the
Industries Ltd. to Subaru Corporation in April 2017, which is the
100th anniversary of the founding of our predecessor, the
100th anniversary of the founding of our predecessor, the
Nakajima Aircraft Company.
Nakajima Aircraft Company.
Of course, simply changing the company name and logo
Of course, simply changing the company name and logo
does not immediately impart greater brand value. Brand value is
does not immediately impart greater brand value. Brand value is
something that increases as a result of having customers actually
something that increases as a result of having customers actually
use our cars and approve of their features and quality. In that
use our cars and approve of their features and quality. In that
sense, Subaru cars have garnered high evaluations in recent
sense, Subaru cars have garnered high evaluations in recent
years from customers and third-party agencies for their safety
years from customers and third-party agencies for their safety
features and drivability.
features and drivability.
By using Subaru as a name for both the company and the
By using Subaru as a name for both the company and the
brand, the Group’s employees will rally together to make Subaru
brand, the Group’s employees will rally together to make Subaru
the choice of even more customers and to dedicate effort to
the choice of even more customers and to dedicate effort to
further boosting the value of the Subaru brand.
further boosting the value of the Subaru brand.
Adopting a Subaru Global Platform
Adopting a new platform that looks
ten years into the future and enhances
“enjoyment and peace of mind,”
which is one of Subaru’s strengths.
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
to further boost comprehensive performance and safety features,
to further boost comprehensive performance and safety features,
pursue characteristic Subaru design, adopt environmentally conscious
pursue characteristic Subaru design, adopt environmentally conscious
features, improve quality and service, and strengthen communication
features, improve quality and service, and strengthen communication
with customers.
with customers.
The Subaru Global Platform, to be adopted starting with the
The Subaru Global Platform, to be adopted starting with the
next Impreza model slated for launch this fall, is one of these
next Impreza model slated for launch this fall, is one of these
activities to “enhance the Subaru brand.” In recent years in the
activities to “enhance the Subaru brand.” In recent years in the
automobile industry, companies are eagerly pursuing shared
automobile industry, companies are eagerly pursuing shared
platforms that serve as the foundation for multiple vehicle
platforms that serve as the foundation for multiple vehicle
models, though most are primarily doing so in order to lower
models, though most are primarily doing so in order to lower
costs through more efficient new model development, common
costs through more efficient new model development, common
parts, etc. In contrast, FHI is adopting a new platform with the
parts, etc. In contrast, FHI is adopting a new platform with the
central intention of enhancing the Subaru brand strengths of
central intention of enhancing the Subaru brand strengths of
safety features and drivability.
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
In addition, the new platform increases impact energy
absorption in the event of a collision by 40% compared to current
absorption in the event of a collision by 40% compared to current
models. Currently, Subaru models have received top marks in
models. Currently, Subaru models have received top marks in
safety tests by rating agencies inside and outside Japan,
safety tests by rating agencies inside and outside Japan,
including the Japan New Car Assessment Program (JNCAP), the
including the Japan New Car Assessment Program (JNCAP), the
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
European New Car Assessment Programme (EuroNCAP), which
European New Car Assessment Programme (EuroNCAP), which
has resulted in our greatest competitive strength in the
has resulted in our greatest competitive strength in the
marketplace. These safety tests continue to apply ever more
marketplace. These safety tests continue to apply ever more
stringent standards, including new types of collision tests. At
stringent standards, including new types of collision tests. At
FHI, introduction of the new Subaru Global Platform is further
FHI, introduction of the new Subaru Global Platform is further
increasing our collision safety performance and will help us
increasing our collision safety performance and will help us
maintain the world’s highest levels of safety going forward.
maintain the world’s highest levels of safety going forward.
Product Strategy
Calender year
2016
Fuji Heavy Industries Ltd.
Model plans
2017
FMC
2018
FMC
2019
FMC
2020~
FMC
Continuously introduce new models in our mainstay vehicle lineups
Next-generation platform: the Subaru Global Platform
*Starting with the new Impreza model, incorporate the platform in all full model change (FMC) vehicles from FY 2017
3-row crossover
for North America
Environmental
initiatives
Expanded rollout of direct injection units
2019 Newly designed downsized-turbo
*Comply with regulations in each region by combining electrification with significant
efficiency gains for internal combustion engines
2021 Electric vehicles
Plug-in hybrids
11
increase the number of units sold at each dealer. Our sales plan for
increase the number of units sold at each dealer. Our sales plan for
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
order to meet sales growth in North America. Production of the
order to meet sales growth in North America. Production of the
cars per dealer, though somewhere around 750,000 cars should be
cars per dealer, though somewhere around 750,000 cars should be
Outback model will commence from July 2016, after SIA ends
Outback model will commence from July 2016, after SIA ends
possible by boosting the per-dealer number to approximately 1,200
possible by boosting the per-dealer number to approximately 1,200
consignment production of the Toyota Camry, and we will take
consignment production of the Toyota Camry, and we will take
units. In order to provide sales support for our local dealers, we
units. In order to provide sales support for our local dealers, we
early steps to relieve supply shortfalls. Also, production capacity
early steps to relieve supply shortfalls. Also, production capacity
plan to introduce a three-row crossover as a new model in North
plan to introduce a three-row crossover as a new model in North
at SIA will be expanded nearly twofold—from 200,000 units to
at SIA will be expanded nearly twofold—from 200,000 units to
America in 2018.
America in 2018.
approximately 400,000 units by the end of 2016.
approximately 400,000 units by the end of 2016.
Local dealers in the U.S., our most important market, have
Local dealers in the U.S., our most important market, have
Meanwhile, our Subaru incentive program was the lowest in
Meanwhile, our Subaru incentive program was the lowest in
In the U.S. market, all Subaru models equipped with
In the U.S. market, all Subaru models equipped with
reported that they could increase sales and seize a 5% market
reported that they could increase sales and seize a 5% market
the industry, approximately $900/vehicle for FYE March 2016,
the industry, approximately $900/vehicle for FYE March 2016,
EyeSight have received top marks in safety evaluations by the
EyeSight have received top marks in safety evaluations by the
share if our supply were sufficient. In light of our current 3.4%
share if our supply were sufficient. In light of our current 3.4%
which is far less expensive than the industry average of around
which is far less expensive than the industry average of around
U.S. rating agency IIHS. This and other factors have solidified an
U.S. rating agency IIHS. This and other factors have solidified an
quintessential “enjoyment and peace of mind” will be imbued in
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
a new generation of eco-cars.
At the same time, we are also making steady inroads with
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
this fundamental perspective, we are pushing the evolution of
For FHI to achieve sustainable growth into the future, we must
For FHI to achieve sustainable growth into the future, we must
the highly praised EyeSight, our current driving support product
the highly praised EyeSight, our current driving support product
fulfill our corporate role of social responsibility and continue to be
fulfill our corporate role of social responsibility and continue to be
that includes pre-collision safety technology. We are following
that includes pre-collision safety technology. We are following
a company that constantly earns the trust and support of a broad
a company that constantly earns the trust and support of a broad
this approach to develop automated driving technology that is
this approach to develop automated driving technology that is
group of stakeholders. To that end, it is vital to boost the overall
group of stakeholders. To that end, it is vital to boost the overall
market share, 5% might be a bit over-optimistic, but I believe 4%
market share, 5% might be a bit over-optimistic, but I believe 4%
$3,000/vehicle. Considering that incentives are on a growth
$3,000/vehicle. Considering that incentives are on a growth
image that “Subaru = safety and security,” which I think has led
image that “Subaru = safety and security,” which I think has led
In addition to the above, the Subaru Global Platform has been
In addition to the above, the Subaru Global Platform has been
distinctly Subaru technology.
distinctly Subaru technology.
quality of our corporate management to yet another level.
quality of our corporate management to yet another level.
is entirely reasonable. If total vehicle demand in the U.S. is 17
is entirely reasonable. If total vehicle demand in the U.S. is 17
trajectory for the industry as a whole, we forecast a year-on-year
trajectory for the industry as a whole, we forecast a year-on-year
to our current deep-rooted demand. Going forward, we intend of
to our current deep-rooted demand. Going forward, we intend of
designed while keeping in mind developments in current gasoline
designed while keeping in mind developments in current gasoline
We plan to actively invest in R&D expenses going forward, in
We plan to actively invest in R&D expenses going forward, in
In the automotive business, we cannot deliver “enjoyment
In the automotive business, we cannot deliver “enjoyment
million cars, that puts us at 680,000 units. If overall demand grows
million cars, that puts us at 680,000 units. If overall demand grows
increase, rising to $1,100 for the full year, for FYE March 2017.
increase, rising to $1,100 for the full year, for FYE March 2017.
course to provide high quality, safe vehicles, while also striving to
course to provide high quality, safe vehicles, while also striving to
engines and hybrid vehicles (HV), as well as plug-in hybrids
engines and hybrid vehicles (HV), as well as plug-in hybrids
order to accelerate development of these types of environmental
order to accelerate development of these types of environmental
and peace of mind” to customers unless we provide sufficient
and peace of mind” to customers unless we provide sufficient
slightly, that number could rise to 700,000, so I would first like to
slightly, that number could rise to 700,000, so I would first like to
However, we still do not intend to grow sales by competing on
However, we still do not intend to grow sales by competing on
strengthen our service framework enabling us to deliver
strengthen our service framework enabling us to deliver
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
features and advanced safety technologies. Furthermore, in order
features and advanced safety technologies. Furthermore, in order
quality, even if our cars are equipped with safety features at the
quality, even if our cars are equipped with safety features at the
increase our units sold to equal about a 4% market share in the
increase our units sold to equal about a 4% market share in the
price and will continue to sell vehicles with a low incentive
price and will continue to sell vehicles with a low incentive
after-sales service that will delight new Subaru customers.
after-sales service that will delight new Subaru customers.
scope of California’s ZEV (Zero Emission Vehicle) regulations will
scope of California’s ZEV (Zero Emission Vehicle) regulations will
to optimize management resource allocation throughout the
to optimize management resource allocation throughout the
world’s highest standards. Amid continuing robust sales,
world’s highest standards. Amid continuing robust sales,
next few years. We are basically not planning to increase the
next few years. We are basically not planning to increase the
program going forward.
program going forward.
number of dealers from the current 625 dealers, but rather to
number of dealers from the current 625 dealers, but rather to
Additionally, we are expanding production capacity at our U.S.
Additionally, we are expanding production capacity at our U.S.
be expanded to include mid-sized automakers (including FHI) in
be expanded to include mid-sized automakers (including FHI) in
Group, and to expand development resources in our Automotive
Group, and to expand development resources in our Automotive
primarily in North America, maximum capacity operations have
primarily in North America, maximum capacity operations have
2018. To coincide with this timeline, we are proceeding with
2018. To coincide with this timeline, we are proceeding with
Business, we decided to integrate our Industrial Products
Business, we decided to integrate our Industrial Products
become standard operations for each of our production sites in
become standard operations for each of our production sites in
research and development to launch PHEVs, followed by the
research and development to launch PHEVs, followed by the
Company into our Automobiles Division in October 2016. Existing
Company into our Automobiles Division in October 2016. Existing
recent years. However, it is absolutely inexcusable for quality
recent years. However, it is absolutely inexcusable for quality
subsequent launch of EVs in 2021. In essence, we are not
subsequent launch of EVs in 2021. In essence, we are not
production, sales, and service in our Industrial Products Company
production, sales, and service in our Industrial Products Company
control to suffer as production accelerates. Our production units
control to suffer as production accelerates. Our production units
developing dedicated PHEV and EV models. Our policy is to add
developing dedicated PHEV and EV models. Our policy is to add
will continue for the duration, though development projects will be
will continue for the duration, though development projects will be
are thoroughly aware of their responsibility to stop the line if they
are thoroughly aware of their responsibility to stop the line if they
PHEV and EV grades to our existing cars in the Subaru brand,
PHEV and EV grades to our existing cars in the Subaru brand,
idled and management resources such as development personnel
idled and management resources such as development personnel
are not absolutely confident in the quality of products.
are not absolutely confident in the quality of products.
leveraging
leveraging
their
their
characteristic
characteristic
individuality
individuality
and driving
and driving
will be shifted to the Automobiles Division.
will be shifted to the Automobiles Division.
performance. This approach, I think, will ensure that Subaru’s
performance. This approach, I think, will ensure that Subaru’s
Additionally, as society directs
Additionally, as society directs
increased attention to
increased attention to
corporate governance, FHI has been incorporating outside
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
Thank you for your support and feedback going forward.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 (up 66.7% year on year). FHI recorded its highest historical levels
9.6% year-on-year growth and our first time exceeding one million
of net sales as well as all income categories for the fourth
units. As for consolidated results, we foresee being able to offset
consecutive fiscal year. Additionally, the operating margin was
the increase in overhead costs and R&D expenses by increasing
17.5%. Although the number of passenger vehicles sold in Japan
the number of units sold and further cost reductions. Since the yen
neared the cyclical end of the new-model effect and trailed the
is projected to strengthen from 121 yen/US$ in the fiscal year under
previous year, overseas sales (mainly in the North American
review to 105 yen/US$, we expect consolidated net sales to dip
market) progressed smoothly. Our worldwide sales numbers
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
totaled 957,900 units (up 5.2% year on year), a historical high for
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
the fourth consecutive year. The result of this growth in units
fiscal year net income attributable to owners of parent to fall 32.9%
increase. As for consolidated performance, due to favorable
sold, thanks to robust global support for the Subaru brand,
to 293.0 billion yen, and an operating margin of 13.2%*. We will
foreign exchange rates, the increase in the number of units sold,
allowed us to achieve steady increases in income and profit in
steadily bolster the strength of our business regardless of currency
and cost reductions, we were able to offset the increase in
actual figures excluding gains on foreign exchange, which is
impacts, while maintaining an industry-leading profit margin.
various overhead costs and R&D expenses. Operating profit was
what pleases me most.
565.6 billion yen (up 33.7% year on year), ordinary income came
As for projections for FYE March 2017, we expect the Subaru
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
brand to show continued strength and an increase in units sold in
net income attributable to owners of parent was 436.7 billion yen
North America. We forecast global sales of 1,049.7 thousand units,
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
For FHI to achieve sustainable growth into the future, we must
the highly praised EyeSight, our current driving support product
fulfill our corporate role of social responsibility and continue to be
that includes pre-collision safety technology. We are following
a company that constantly earns the trust and support of a broad
this approach to develop automated driving technology that is
group of stakeholders. To that end, it is vital to boost the overall
In addition to the above, the Subaru Global Platform has been
distinctly Subaru technology.
quality of our corporate management to yet another level.
designed while keeping in mind developments in current gasoline
We plan to actively invest in R&D expenses going forward, in
In the automotive business, we cannot deliver “enjoyment
engines and hybrid vehicles (HV), as well as plug-in hybrids
order to accelerate development of these types of environmental
and peace of mind” to customers unless we provide sufficient
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
features and advanced safety technologies. Furthermore, in order
quality, even if our cars are equipped with safety features at the
scope of California’s ZEV (Zero Emission Vehicle) regulations will
to optimize management resource allocation throughout the
world’s highest standards. Amid continuing robust sales,
be expanded to include mid-sized automakers (including FHI) in
Group, and to expand development resources in our Automotive
primarily in North America, maximum capacity operations have
2018. To coincide with this timeline, we are proceeding with
Business, we decided to integrate our Industrial Products
become standard operations for each of our production sites in
research and development to launch PHEVs, followed by the
Company into our Automobiles Division in October 2016. Existing
recent years. However, it is absolutely inexcusable for quality
subsequent launch of EVs in 2021. In essence, we are not
production, sales, and service in our Industrial Products Company
control to suffer as production accelerates. Our production units
developing dedicated PHEV and EV models. Our policy is to add
will continue for the duration, though development projects will be
are thoroughly aware of their responsibility to stop the line if they
PHEV and EV grades to our existing cars in the Subaru brand,
idled and management resources such as development personnel
are not absolutely confident in the quality of products.
leveraging
their
characteristic
individuality
and driving
will be shifted to the Automobiles Division.
performance. This approach, I think, will ensure that Subaru’s
Additionally, as society directs
increased attention to
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
With regard to consolidated global sales units in FY 2020, we
business model of high profitability and an industry-leading
revised forecasts upward, to top 1,200.0 thousand units from the
operating margin.
original target north of 1,100.0 thousand units, given that
Because we are not comparatively large, our value-adding
on-going sales strength is expected in the favorably performing
and thorough differentiation strategies are indispensable for
North American market. We also reassessed our plans for
competing with the world’s major automobile manufacturers.
increasing production capacity along the same lines. Existing
Consequently, it is vital that we avoid entering the volume-sales
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
In working to be “a high-quality company that is not big in size but
plans had envisioned global production capacity (excluding CKD in
zone in order to grow our sales units. That zone is the specialty of
has distinctive strength”—a stance we outlined in May 2014 in our
Malaysia) of 1,050.0 thousand units (under standard operations)
major automakers and we would eventually be forced to
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
mid-term management vision, “Prominence 2020”—FHI has been
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
compete on price. We believe that it is beneficial to limit our
Industries Ltd. to Subaru Corporation in April 2017, which is the
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
absorption in the event of a collision by 40% compared to current
striving to increase corporate value, while focusing on the two
2018 (under standard operations; 1,276.0 thousand units at
categories and markets to those in which we can leverage our
100th anniversary of the founding of our predecessor, the
to further boost comprehensive performance and safety features,
models. Currently, Subaru models have received top marks in
initiatives of “enhancing the Subaru brand” and “building a strong
maximum operation).
strengths, and to steadily grow our sales units by concentrating
Nakajima Aircraft Company.
pursue characteristic Subaru design, adopt environmentally conscious
safety tests by rating agencies inside and outside Japan,
business structure.”
Furthermore, we announced a new Three-Year Business
our management resources in those areas.
Of course, simply changing the company name and logo
features, improve quality and service, and strengthen communication
including the Japan New Car Assessment Program (JNCAP), the
This fundamental policy has not changed; however, we
Operation/Profit Plan for FYE March 2017-2019. Planned
FHI is ardently pursuing value-adding and differentiation
does not immediately impart greater brand value. Brand value is
with customers.
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
announced updates of our 3-year consolidated profit plan,
three-year totals are 9,800 billion yen in net sales, 1,100 billion
strategies that set us apart from other automakers, while further
something that increases as a result of having customers actually
The Subaru Global Platform, to be adopted starting with the
European New Car Assessment Programme (EuroNCAP), which
consolidated sales units, production plans, etc. in May 2016 in
yen in operating profit, 360.0 billion yen in R&D expenses, and
accelerating our initiatives to “enhance the Subaru brand” and
use our cars and approve of their features and quality. In that
next Impreza model slated for launch this fall, is one of these
has resulted in our greatest competitive strength in the
response to subsequent changes in the business environment and
470.0 billion yen in capital expenditures. While continuing to
“build a strong business structure.”
sense, Subaru cars have garnered high evaluations in recent
activities to “enhance the Subaru brand.” In recent years in the
marketplace. These safety tests continue to apply ever more
sales performance in each market.
expand investment in future growth, we will maintain our current
years from customers and third-party agencies for their safety
automobile industry, companies are eagerly pursuing shared
stringent standards, including new types of collision tests. At
features and drivability.
platforms that serve as the foundation for multiple vehicle
FHI, introduction of the new Subaru Global Platform is further
By using Subaru as a name for both the company and the
models, though most are primarily doing so in order to lower
increasing our collision safety performance and will help us
brand, the Group’s employees will rally together to make Subaru
costs through more efficient new model development, common
maintain the world’s highest levels of safety going forward.
the choice of even more customers and to dedicate effort to
parts, etc. In contrast, FHI is adopting a new platform with the
further boosting the value of the Subaru brand.
central intention of enhancing the Subaru brand strengths of
To Our Shareholders
Sales Strategy in the U.S.
Expanding production capacity and
strengthening our dealer service
framework to meet customer
expectations.
Local dealers in the U.S., our most important market, have
reported that they could increase sales and seize a 5% market
share if our supply were sufficient. In light of our current 3.4%
market share, 5% might be a bit over-optimistic, but I believe 4%
is entirely reasonable. If total vehicle demand in the U.S. is 17
million cars, that puts us at 680,000 units. If overall demand grows
slightly, that number could rise to 700,000, so I would first like to
increase our units sold to equal about a 4% market share in the
next few years. We are basically not planning to increase the
number of dealers from the current 625 dealers, but rather to
increase the number of units sold at each dealer. Our sales plan for
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
cars per dealer, though somewhere around 750,000 cars should be
possible by boosting the per-dealer number to approximately 1,200
units. In order to provide sales support for our local dealers, we
plan to introduce a three-row crossover as a new model in North
America in 2018.
Meanwhile, our Subaru incentive program was the lowest in
the industry, approximately $900/vehicle for FYE March 2016,
which is far less expensive than the industry average of around
$3,000/vehicle. Considering that incentives are on a growth
trajectory for the industry as a whole, we forecast a year-on-year
increase, rising to $1,100 for the full year, for FYE March 2017.
However, we still do not intend to grow sales by competing on
price and will continue to sell vehicles with a low incentive
program going forward.
Additionally, we are expanding production capacity at our U.S.
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
order to meet sales growth in North America. Production of the
Outback model will commence from July 2016, after SIA ends
consignment production of the Toyota Camry, and we will take
early steps to relieve supply shortfalls. Also, production capacity
at SIA will be expanded nearly twofold—from 200,000 units to
approximately 400,000 units by the end of 2016.
In the U.S. market, all Subaru models equipped with
EyeSight have received top marks in safety evaluations by the
U.S. rating agency IIHS. This and other factors have solidified an
image that “Subaru = safety and security,” which I think has led
to our current deep-rooted demand. Going forward, we intend of
course to provide high quality, safe vehicles, while also striving to
strengthen our service framework enabling us to deliver
after-sales service that will delight new Subaru customers.
Changes in the number of dealers
Changes in the number of retail sales units
Units sold per dealer
(Units)
1,000
No. of dealers
984
(Dealers)
800
LEGACY
(1,000 units)
640
932
IMPREZA
FORESTER
TRIBECA
WRX
BRZ
618
621
750
621
684
542
500
430
250
827
621
625
625
600
480
400
320
267
200
160
3
76
41
147
615
583
5
34
175
156
514
8
1
25
160
129
425
9
2
124
131
336
4
2
76
89
165
160
191
213
0
2011
2012
2013
2014
2015
2016
(Planned)
0
(CY)
0
2011
2012
2013
2014
2015
2016
(Planned)
(CY)
12
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 (up 66.7% year on year). FHI recorded its highest historical levels
(up 66.7% year on year). FHI recorded its highest historical levels
9.6% year-on-year growth and our first time exceeding one million
9.6% year-on-year growth and our first time exceeding one million
of net sales as well as all income categories for the fourth
of net sales as well as all income categories for the fourth
units. As for consolidated results, we foresee being able to offset
units. As for consolidated results, we foresee being able to offset
consecutive fiscal year. Additionally, the operating margin was
consecutive fiscal year. Additionally, the operating margin was
the increase in overhead costs and R&D expenses by increasing
the increase in overhead costs and R&D expenses by increasing
17.5%. Although the number of passenger vehicles sold in Japan
17.5%. Although the number of passenger vehicles sold in Japan
the number of units sold and further cost reductions. Since the yen
the number of units sold and further cost reductions. Since the yen
neared the cyclical end of the new-model effect and trailed the
neared the cyclical end of the new-model effect and trailed the
is projected to strengthen from 121 yen/US$ in the fiscal year under
is projected to strengthen from 121 yen/US$ in the fiscal year under
previous year, overseas sales (mainly in the North American
previous year, overseas sales (mainly in the North American
review to 105 yen/US$, we expect consolidated net sales to dip
review to 105 yen/US$, we expect consolidated net sales to dip
market) progressed smoothly. Our worldwide sales numbers
market) progressed smoothly. Our worldwide sales numbers
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
1.9% to 3,170.0 billion yen, operating profit to fall 25.7% to 420.0
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
Fuji Heavy Industries Ltd. Group’s consolidated net sales in FYE
totaled 957,900 units (up 5.2% year on year), a historical high for
totaled 957,900 units (up 5.2% year on year), a historical high for
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
billion yen, ordinary income to fall 27.2% to 420.0 billion yen, the
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
March 2016 came to 3,232.3 billion yen, a 12.3% year-on-year
the fourth consecutive year. The result of this growth in units
the fourth consecutive year. The result of this growth in units
fiscal year net income attributable to owners of parent to fall 32.9%
fiscal year net income attributable to owners of parent to fall 32.9%
increase. As for consolidated performance, due to favorable
increase. As for consolidated performance, due to favorable
sold, thanks to robust global support for the Subaru brand,
sold, thanks to robust global support for the Subaru brand,
to 293.0 billion yen, and an operating margin of 13.2%*. We will
to 293.0 billion yen, and an operating margin of 13.2%*. We will
foreign exchange rates, the increase in the number of units sold,
foreign exchange rates, the increase in the number of units sold,
allowed us to achieve steady increases in income and profit in
allowed us to achieve steady increases in income and profit in
steadily bolster the strength of our business regardless of currency
steadily bolster the strength of our business regardless of currency
and cost reductions, we were able to offset the increase in
and cost reductions, we were able to offset the increase in
actual figures excluding gains on foreign exchange, which is
actual figures excluding gains on foreign exchange, which is
impacts, while maintaining an industry-leading profit margin.
impacts, while maintaining an industry-leading profit margin.
various overhead costs and R&D expenses. Operating profit was
various overhead costs and R&D expenses. Operating profit was
what pleases me most.
what pleases me most.
565.6 billion yen (up 33.7% year on year), ordinary income came
565.6 billion yen (up 33.7% year on year), ordinary income came
As for projections for FYE March 2017, we expect the Subaru
As for projections for FYE March 2017, we expect the Subaru
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
to 577.0 billion yen (up 46.6% year on year), and the fiscal year
brand to show continued strength and an increase in units sold in
brand to show continued strength and an increase in units sold in
net income attributable to owners of parent was 436.7 billion yen
net income attributable to owners of parent was 436.7 billion yen
North America. We forecast global sales of 1,049.7 thousand units,
North America. We forecast global sales of 1,049.7 thousand units,
With regard to consolidated global sales units in FY 2020, we
With regard to consolidated global sales units in FY 2020, we
business model of high profitability and an industry-leading
business model of high profitability and an industry-leading
revised forecasts upward, to top 1,200.0 thousand units from the
revised forecasts upward, to top 1,200.0 thousand units from the
operating margin.
operating margin.
original target north of 1,100.0 thousand units, given that
original target north of 1,100.0 thousand units, given that
Because we are not comparatively large, our value-adding
Because we are not comparatively large, our value-adding
on-going sales strength is expected in the favorably performing
on-going sales strength is expected in the favorably performing
and thorough differentiation strategies are indispensable for
and thorough differentiation strategies are indispensable for
North American market. We also reassessed our plans for
North American market. We also reassessed our plans for
competing with the world’s major automobile manufacturers.
competing with the world’s major automobile manufacturers.
increasing production capacity along the same lines. Existing
increasing production capacity along the same lines. Existing
Consequently, it is vital that we avoid entering the volume-sales
Consequently, it is vital that we avoid entering the volume-sales
safety features and drivability.
safety features and drivability.
The Subaru Global Platform developed with the year 2025 in
The Subaru Global Platform developed with the year 2025 in
mind brings broad improvements to the rigidity of bodies and
mind brings broad improvements to the rigidity of bodies and
chassis compared to current models, while also pursuing a lower
chassis compared to current models, while also pursuing a lower
center of gravity and evolution in the suspension system. This
center of gravity and evolution in the suspension system. This
will allow even further gains in the basic “run, turn and stop”
will allow even further gains in the basic “run, turn and stop”
features that have earned Subaru an established reputation.
features that have earned Subaru an established reputation.
In addition, the new platform increases impact energy
In addition, the new platform increases impact energy
In working to be “a high-quality company that is not big in size but
In working to be “a high-quality company that is not big in size but
plans had envisioned global production capacity (excluding CKD in
plans had envisioned global production capacity (excluding CKD in
zone in order to grow our sales units. That zone is the specialty of
zone in order to grow our sales units. That zone is the specialty of
has distinctive strength”—a stance we outlined in May 2014 in our
has distinctive strength”—a stance we outlined in May 2014 in our
Malaysia) of 1,050.0 thousand units (under standard operations)
Malaysia) of 1,050.0 thousand units (under standard operations)
major automakers and we would eventually be forced to
major automakers and we would eventually be forced to
As one of our measures to accelerate our “enhancing the Subaru
As one of our measures to accelerate our “enhancing the Subaru
brand” initiative, we will change our name from Fuji Heavy
brand” initiative, we will change our name from Fuji Heavy
mid-term management vision, “Prominence 2020”—FHI has been
mid-term management vision, “Prominence 2020”—FHI has been
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
in FY 2020. We raised this figure to 1,132.0 thousand units in FY
compete on price. We believe that it is beneficial to limit our
compete on price. We believe that it is beneficial to limit our
Industries Ltd. to Subaru Corporation in April 2017, which is the
Industries Ltd. to Subaru Corporation in April 2017, which is the
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
As initiatives to “enhance the Subaru brand,” FHI is dedicating effort
absorption in the event of a collision by 40% compared to current
absorption in the event of a collision by 40% compared to current
striving to increase corporate value, while focusing on the two
striving to increase corporate value, while focusing on the two
2018 (under standard operations; 1,276.0 thousand units at
2018 (under standard operations; 1,276.0 thousand units at
categories and markets to those in which we can leverage our
categories and markets to those in which we can leverage our
100th anniversary of the founding of our predecessor, the
100th anniversary of the founding of our predecessor, the
to further boost comprehensive performance and safety features,
to further boost comprehensive performance and safety features,
models. Currently, Subaru models have received top marks in
models. Currently, Subaru models have received top marks in
initiatives of “enhancing the Subaru brand” and “building a strong
initiatives of “enhancing the Subaru brand” and “building a strong
maximum operation).
maximum operation).
strengths, and to steadily grow our sales units by concentrating
strengths, and to steadily grow our sales units by concentrating
Nakajima Aircraft Company.
Nakajima Aircraft Company.
pursue characteristic Subaru design, adopt environmentally conscious
pursue characteristic Subaru design, adopt environmentally conscious
safety tests by rating agencies inside and outside Japan,
safety tests by rating agencies inside and outside Japan,
business structure.”
business structure.”
Furthermore, we announced a new Three-Year Business
Furthermore, we announced a new Three-Year Business
our management resources in those areas.
our management resources in those areas.
Of course, simply changing the company name and logo
Of course, simply changing the company name and logo
features, improve quality and service, and strengthen communication
features, improve quality and service, and strengthen communication
including the Japan New Car Assessment Program (JNCAP), the
including the Japan New Car Assessment Program (JNCAP), the
This fundamental policy has not changed; however, we
This fundamental policy has not changed; however, we
Operation/Profit Plan for FYE March 2017-2019. Planned
Operation/Profit Plan for FYE March 2017-2019. Planned
FHI is ardently pursuing value-adding and differentiation
FHI is ardently pursuing value-adding and differentiation
does not immediately impart greater brand value. Brand value is
does not immediately impart greater brand value. Brand value is
with customers.
with customers.
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
Insurance Institute for Highway Safety (IIHS) in the U.S., and the
announced updates of our 3-year consolidated profit plan,
announced updates of our 3-year consolidated profit plan,
three-year totals are 9,800 billion yen in net sales, 1,100 billion
three-year totals are 9,800 billion yen in net sales, 1,100 billion
strategies that set us apart from other automakers, while further
strategies that set us apart from other automakers, while further
something that increases as a result of having customers actually
something that increases as a result of having customers actually
The Subaru Global Platform, to be adopted starting with the
The Subaru Global Platform, to be adopted starting with the
European New Car Assessment Programme (EuroNCAP), which
European New Car Assessment Programme (EuroNCAP), which
consolidated sales units, production plans, etc. in May 2016 in
consolidated sales units, production plans, etc. in May 2016 in
yen in operating profit, 360.0 billion yen in R&D expenses, and
yen in operating profit, 360.0 billion yen in R&D expenses, and
accelerating our initiatives to “enhance the Subaru brand” and
accelerating our initiatives to “enhance the Subaru brand” and
use our cars and approve of their features and quality. In that
use our cars and approve of their features and quality. In that
next Impreza model slated for launch this fall, is one of these
next Impreza model slated for launch this fall, is one of these
has resulted in our greatest competitive strength in the
has resulted in our greatest competitive strength in the
response to subsequent changes in the business environment and
response to subsequent changes in the business environment and
470.0 billion yen in capital expenditures. While continuing to
470.0 billion yen in capital expenditures. While continuing to
“build a strong business structure.”
“build a strong business structure.”
sense, Subaru cars have garnered high evaluations in recent
sense, Subaru cars have garnered high evaluations in recent
activities to “enhance the Subaru brand.” In recent years in the
activities to “enhance the Subaru brand.” In recent years in the
marketplace. These safety tests continue to apply ever more
marketplace. These safety tests continue to apply ever more
sales performance in each market.
sales performance in each market.
expand investment in future growth, we will maintain our current
expand investment in future growth, we will maintain our current
years from customers and third-party agencies for their safety
years from customers and third-party agencies for their safety
automobile industry, companies are eagerly pursuing shared
automobile industry, companies are eagerly pursuing shared
stringent standards, including new types of collision tests. At
stringent standards, including new types of collision tests. At
features and drivability.
features and drivability.
platforms that serve as the foundation for multiple vehicle
platforms that serve as the foundation for multiple vehicle
FHI, introduction of the new Subaru Global Platform is further
FHI, introduction of the new Subaru Global Platform is further
By using Subaru as a name for both the company and the
By using Subaru as a name for both the company and the
models, though most are primarily doing so in order to lower
models, though most are primarily doing so in order to lower
increasing our collision safety performance and will help us
increasing our collision safety performance and will help us
brand, the Group’s employees will rally together to make Subaru
brand, the Group’s employees will rally together to make Subaru
costs through more efficient new model development, common
costs through more efficient new model development, common
maintain the world’s highest levels of safety going forward.
maintain the world’s highest levels of safety going forward.
the choice of even more customers and to dedicate effort to
the choice of even more customers and to dedicate effort to
parts, etc. In contrast, FHI is adopting a new platform with the
parts, etc. In contrast, FHI is adopting a new platform with the
further boosting the value of the Subaru brand.
further boosting the value of the Subaru brand.
central intention of enhancing the Subaru brand strengths of
central intention of enhancing the Subaru brand strengths of
To Our Shareholders
To Our Shareholders
Responding to Environmental Regulations and Initiatives
for Automated Driving
Expanding the R&D framework of
the Automotive Business in order to
accelerate our environmental
response and our development of
driving support technology.
In addition to the above, the Subaru Global Platform has been
In addition to the above, the Subaru Global Platform has been
designed while keeping in mind developments in current gasoline
designed while keeping in mind developments in current gasoline
engines and hybrid vehicles (HV), as well as plug-in hybrids
engines and hybrid vehicles (HV), as well as plug-in hybrids
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
(PHEV) and electric vehicles (EV). In the strong U.S. market, the
scope of California’s ZEV (Zero Emission Vehicle) regulations will
scope of California’s ZEV (Zero Emission Vehicle) regulations will
be expanded to include mid-sized automakers (including FHI) in
be expanded to include mid-sized automakers (including FHI) in
2018. To coincide with this timeline, we are proceeding with
2018. To coincide with this timeline, we are proceeding with
research and development to launch PHEVs, followed by the
research and development to launch PHEVs, followed by the
subsequent launch of EVs in 2021. In essence, we are not
subsequent launch of EVs in 2021. In essence, we are not
developing dedicated PHEV and EV models. Our policy is to add
developing dedicated PHEV and EV models. Our policy is to add
PHEV and EV grades to our existing cars in the Subaru brand,
PHEV and EV grades to our existing cars in the Subaru brand,
leveraging
and driving
leveraging
and driving
performance. This approach, I think, will ensure that Subaru’s
performance. This approach, I think, will ensure that Subaru’s
characteristic
characteristic
individuality
individuality
their
their
quintessential “enjoyment and peace of mind” will be imbued in
quintessential “enjoyment and peace of mind” will be imbued in
a new generation of eco-cars.
a new generation of eco-cars.
At the same time, we are also making steady inroads with
At the same time, we are also making steady inroads with
our automated driving R&D. FHI’s view of automated driving is
our automated driving R&D. FHI’s view of automated driving is
not “cars that drive in place of people,” but rather, “cars that
not “cars that drive in place of people,” but rather, “cars that
provide driving support with the driver in the central role.” From
provide driving support with the driver in the central role.” From
this fundamental perspective, we are pushing the evolution of
this fundamental perspective, we are pushing the evolution of
the highly praised EyeSight, our current driving support product
the highly praised EyeSight, our current driving support product
that includes pre-collision safety technology. We are following
that includes pre-collision safety technology. We are following
this approach to develop automated driving technology that is
this approach to develop automated driving technology that is
distinctly Subaru technology.
distinctly Subaru technology.
We plan to actively invest in R&D expenses going forward, in
We plan to actively invest in R&D expenses going forward, in
order to accelerate development of these types of environmental
order to accelerate development of these types of environmental
features and advanced safety technologies. Furthermore, in order
features and advanced safety technologies. Furthermore, in order
to optimize management resource allocation throughout the
to optimize management resource allocation throughout the
Group, and to expand development resources in our Automotive
Group, and to expand development resources in our Automotive
Business, we decided to integrate our Industrial Products
Business, we decided to integrate our Industrial Products
Company into our Automobiles Division in October 2016. Existing
Company into our Automobiles Division in October 2016. Existing
production, sales, and service in our Industrial Products Company
production, sales, and service in our Industrial Products Company
will continue for the duration, though development projects will be
will continue for the duration, though development projects will be
idled and management resources such as development personnel
idled and management resources such as development personnel
will be shifted to the Automobiles Division.
will be shifted to the Automobiles Division.
Company name change / business integration
Fuji Heavy Industries Ltd.
Automobiles
Division
Aerospace
Company
Industrial Products
Company
Subaru Corporation
Automobiles Division
Industrial Products Division
Aerospace Company
13
Sales Strategy in the U.S.
increase the number of units sold at each dealer. Our sales plan for
increase the number of units sold at each dealer. Our sales plan for
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
production subsidiary Subaru of Indiana Automotive, Inc. (SIA), in
Expanding production capacity and
strengthening our dealer service
framework to meet customer
expectations.
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
the U.S. in calendar year 2016 is 615,000 cars, approximately 1,000
order to meet sales growth in North America. Production of the
order to meet sales growth in North America. Production of the
cars per dealer, though somewhere around 750,000 cars should be
cars per dealer, though somewhere around 750,000 cars should be
Outback model will commence from July 2016, after SIA ends
Outback model will commence from July 2016, after SIA ends
possible by boosting the per-dealer number to approximately 1,200
possible by boosting the per-dealer number to approximately 1,200
consignment production of the Toyota Camry, and we will take
consignment production of the Toyota Camry, and we will take
units. In order to provide sales support for our local dealers, we
units. In order to provide sales support for our local dealers, we
early steps to relieve supply shortfalls. Also, production capacity
early steps to relieve supply shortfalls. Also, production capacity
plan to introduce a three-row crossover as a new model in North
plan to introduce a three-row crossover as a new model in North
at SIA will be expanded nearly twofold—from 200,000 units to
at SIA will be expanded nearly twofold—from 200,000 units to
America in 2018.
America in 2018.
approximately 400,000 units by the end of 2016.
approximately 400,000 units by the end of 2016.
Local dealers in the U.S., our most important market, have
Local dealers in the U.S., our most important market, have
Meanwhile, our Subaru incentive program was the lowest in
Meanwhile, our Subaru incentive program was the lowest in
In the U.S. market, all Subaru models equipped with
In the U.S. market, all Subaru models equipped with
reported that they could increase sales and seize a 5% market
reported that they could increase sales and seize a 5% market
the industry, approximately $900/vehicle for FYE March 2016,
the industry, approximately $900/vehicle for FYE March 2016,
EyeSight have received top marks in safety evaluations by the
EyeSight have received top marks in safety evaluations by the
share if our supply were sufficient. In light of our current 3.4%
share if our supply were sufficient. In light of our current 3.4%
which is far less expensive than the industry average of around
which is far less expensive than the industry average of around
U.S. rating agency IIHS. This and other factors have solidified an
U.S. rating agency IIHS. This and other factors have solidified an
market share, 5% might be a bit over-optimistic, but I believe 4%
market share, 5% might be a bit over-optimistic, but I believe 4%
$3,000/vehicle. Considering that incentives are on a growth
$3,000/vehicle. Considering that incentives are on a growth
image that “Subaru = safety and security,” which I think has led
image that “Subaru = safety and security,” which I think has led
is entirely reasonable. If total vehicle demand in the U.S. is 17
is entirely reasonable. If total vehicle demand in the U.S. is 17
trajectory for the industry as a whole, we forecast a year-on-year
trajectory for the industry as a whole, we forecast a year-on-year
to our current deep-rooted demand. Going forward, we intend of
to our current deep-rooted demand. Going forward, we intend of
million cars, that puts us at 680,000 units. If overall demand grows
million cars, that puts us at 680,000 units. If overall demand grows
increase, rising to $1,100 for the full year, for FYE March 2017.
increase, rising to $1,100 for the full year, for FYE March 2017.
course to provide high quality, safe vehicles, while also striving to
course to provide high quality, safe vehicles, while also striving to
slightly, that number could rise to 700,000, so I would first like to
slightly, that number could rise to 700,000, so I would first like to
However, we still do not intend to grow sales by competing on
However, we still do not intend to grow sales by competing on
strengthen our service framework enabling us to deliver
strengthen our service framework enabling us to deliver
increase our units sold to equal about a 4% market share in the
increase our units sold to equal about a 4% market share in the
price and will continue to sell vehicles with a low incentive
price and will continue to sell vehicles with a low incentive
after-sales service that will delight new Subaru customers.
after-sales service that will delight new Subaru customers.
next few years. We are basically not planning to increase the
next few years. We are basically not planning to increase the
program going forward.
program going forward.
number of dealers from the current 625 dealers, but rather to
number of dealers from the current 625 dealers, but rather to
Additionally, we are expanding production capacity at our U.S.
Additionally, we are expanding production capacity at our U.S.
Changes in the number of dealers
Units sold per dealer
(Units)
1,000
No. of dealers
984
(Dealers)
800
(1,000 units)
640
932
Changes in the number of retail sales units
LEGACY
IMPREZA
FORESTER
TRIBECA
WRX
BRZ
618
621
827
621
625
625
621
684
600
480
615
583
5
34
514
8
1
25
160
129
175
156
425
9
2
124
131
336
4
2
76
89
165
160
191
213
400
320
267
200
160
3
76
41
147
542
500
430
750
250
0
2011
2012
2013
2014
2015
0
2011
2012
2013
2014
2015
2016
(Planned)
0
(CY)
2016
(Planned)
(CY)
A Word about CSR Management
Aiming to be a company that is
continually trusted by society as we
boost the quality of our management.
For FHI to achieve sustainable growth into the future, we must
For FHI to achieve sustainable growth into the future, we must
fulfill our corporate role of social responsibility and continue to be
fulfill our corporate role of social responsibility and continue to be
a company that constantly earns the trust and support of a broad
a company that constantly earns the trust and support of a broad
group of stakeholders. To that end, it is vital to boost the overall
group of stakeholders. To that end, it is vital to boost the overall
quality of our corporate management to yet another level.
quality of our corporate management to yet another level.
In the automotive business, we cannot deliver “enjoyment
In the automotive business, we cannot deliver “enjoyment
and peace of mind” to customers unless we provide sufficient
and peace of mind” to customers unless we provide sufficient
quality, even if our cars are equipped with safety features at the
quality, even if our cars are equipped with safety features at the
world’s highest standards. Amid continuing robust sales,
world’s highest standards. Amid continuing robust sales,
primarily in North America, maximum capacity operations have
primarily in North America, maximum capacity operations have
become standard operations for each of our production sites in
become standard operations for each of our production sites in
recent years. However, it is absolutely inexcusable for quality
recent years. However, it is absolutely inexcusable for quality
control to suffer as production accelerates. Our production units
control to suffer as production accelerates. Our production units
are thoroughly aware of their responsibility to stop the line if they
are thoroughly aware of their responsibility to stop the line if they
are not absolutely confident in the quality of products.
are not absolutely confident in the quality of products.
Additionally, as society directs
Additionally, as society directs
increased attention to
increased attention to
corporate governance, FHI has been incorporating outside
corporate governance, FHI has been incorporating outside
directors and auditors. Their participation has helped reflect
directors and auditors. Their participation has helped reflect
stakeholder opinions to a greater extent in our business
stakeholder opinions to a greater extent in our business
management. When putting together the Corporate Governance
management. When putting together the Corporate Governance
Guidelines we formulated last year, outside directors and
Guidelines we formulated last year, outside directors and
auditors also took an active role in providing advice. Their
auditors also took an active role in providing advice. Their
participation greatly contributes to further establishing our
participation greatly contributes to further establishing our
corporate governance framework and increasing corporate value.
corporate governance framework and increasing corporate value.
Under our new name of Subaru Corporation, management
Under our new name of Subaru Corporation, management
and Group employees alike will ensure thorough compliance with
and Group employees alike will ensure thorough compliance with
laws and regulations, conduct themselves responsibly every day,
laws and regulations, conduct themselves responsibly every day,
and continue to strive for even greater brand and corporate value.
and continue to strive for even greater brand and corporate value.
Thank you for your support and feedback going forward.
Thank you for your support and feedback going forward.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Message from our CFO
We will keep our industry-leading profit margin
while aiming for sustainable growth and
continuous return of profit to shareholders.
In FYE March 2016, FHI (on a consolidated basis) posted record
was 423.0 billion yen (at an exchange rate of 108 yen/US$) and
operating margin (assuming an exchange rate of 100 yen/US$), in
high levels for the fourth straight year in net sales and all income
565.6 billion yen for FYE March 2016 (121 yen/US$). Assumptions of
addition to increased investment in R&D and capital expenditures.
categories. Operating profit came to 565.6 billion yen, an increase
an exchange rate of 105 yen/US$ for FYE March 2017 have us
The new plan demonstrates our management’s resolve to
of 142.5 billion yen year on year. 108.4 billion yen of that amount
expecting operating profit of 420.0 billion yen for that period,
implement the investment necessary to achieve sustainable
was from advantageous exchange rates; however, I see the result
producing a projected 3-year total of 1,400 billion yen*. Recalculating
growth, while also maintaining our industry-leading operating profit
as extremely favorable, given that the actual figure excluding gains
using the initially projected exchange rate of 95 yen/US$ yields
margin going forward.
95 yen/US$) in our 3-year forecast for consolidated results (FYE
been consistently strengthened according to our plans.
March 2015-2017).
This year, we formulated a new 3-year forecast for consolidated
Current exchange rate fluctuations, however, show a shift in
results (FYE March 2017-2019). We are planning for net sales of
the direction of a weaker yen; operating profit for FYE March 2015
9,800 billion yen, operating profit of 1,100 billion yen, and an 11.2%
Mitsuru Takahashi
Director of the Board
Corporate Executive Vice President and CFO
on foreign exchange was a 34.1 billion yen increase.
870.0 billion yen, which underperforms the target of 1,000 billion
In the Company’s “Prominence 2020” mid-term management
yen. However, this amount includes systematically increased
vision, we are targeting 3-year total net sales of 8,000 billion yen and
investments in future growth through greater R&D and capital
operating profit of 1,000 billion yen (assuming an exchange rate of
expenditures, and we are confident that our real profitability has
14
Given that exchange rate gains led the Company to expect significant
over-performance in FYE March 2015-2016, we boosted investment
in R&D expenses above our initial plan. Background factors
prompting this decision included the intensifying R&D competition
surrounding environmental features and automated driving.
Heading into 2020, major global markets appear set to further
strengthen their exhaust and fuel efficiency regulations, as seen
by the expanded scope of ZEV (Zero Emission Vehicle) regulations
for 2018 in the U.S. (primarily in California). At the same time,
readers are no doubt aware that development and demonstration
of automated driving technologies is being actively implemented
by the world’s major automobile manufacturers and IT companies.
FHI is proud of our industry-leading EyeSight technology for
preventing accidents before they occur. We aim to preserve that
leading position by evolving our EyeSight technology further as
well as achieve automated driving in quintessentially Subaru
fashion. At the same time, we are aware that we still have gains to
be made in order to catch up with industry frontrunners in terms of
environmental features such as electrification.
FHI has efficiently produced results with what was a
comparatively low level of R&D investment. Going forward,
however, I think it is no surprise that much more robust investment
will be needed to clear the two significant technological hurdles of
environmental features and automated driving.
Furthermore, considering the continued vehicle supply
shortfalls, primarily in North America, larger capital expenditures
are also indispensable for expanding production capacity. We
project production capacity of 400,000 vehicles (which is nearly a
two-fold increase) in the U.S. by the end of 2016, and plan for
further capital expenditures beyond that in order to meet demand.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Message from our CFO
We will strive to strengthen real profitability, excluding
gains on foreign exchange, while aiming for 1,100 billion
yen in operating income over the next three years.
In FYE March 2016, FHI (on a consolidated basis) posted record
high levels for the fourth straight year in net sales and all income
categories. Operating profit came to 565.6 billion yen, an increase
of 142.5 billion yen year on year. 108.4 billion yen of that amount
was from advantageous exchange rates; however, I see the result
as extremely favorable, given that the actual figure excluding gains
on foreign exchange was a 34.1 billion yen increase.
In the Company’s “Prominence 2020” mid-term management
vision, we are targeting 3-year total net sales of 8,000 billion yen and
operating profit of 1,000 billion yen (assuming an exchange rate of
95 yen/US$) in our 3-year forecast for consolidated results (FYE
March 2015-2017).
Current exchange rate fluctuations, however, show a shift in
the direction of a weaker yen; operating profit for FYE March 2015
was 423.0 billion yen (at an exchange rate of 108 yen/US$) and
565.6 billion yen for FYE March 2016 (121 yen/US$). Assumptions of
an exchange rate of 105 yen/US$ for FYE March 2017 have us
expecting operating profit of 420.0 billion yen for that period,
producing a projected 3-year total of 1,400 billion yen*. Recalculating
using the initially projected exchange rate of 95 yen/US$ yields
870.0 billion yen, which underperforms the target of 1,000 billion
yen. However, this amount includes systematically increased
investments in future growth through greater R&D and capital
expenditures, and we are confident that our real profitability has
been consistently strengthened according to our plans.
This year, we formulated a new 3-year forecast for consolidated
results (FYE March 2017-2019). We are planning for net sales of
9,800 billion yen, operating profit of 1,100 billion yen, and an 11.2%
operating margin (assuming an exchange rate of 100 yen/US$), in
addition to increased investment in R&D and capital expenditures.
The new plan demonstrates our management’s resolve to
implement the investment necessary to achieve sustainable
growth, while also maintaining our industry-leading operating profit
margin going forward.
*Figures in projections for FYE March 2017 were announced May 12,
2016, then revised August 3, 2016.
For details, please see the Company website
(http://www.fhi.co.jp/english/ir/index.html).
FYE March 2016: Analysis of Increase and Decrease
in Operating Income Changes (consolidated)
(Billions of yen)
Cost
reduction
+33.1
Improvement of
sales volume &
mixture and others
+58.8
Gain on currency
exchange
+108.4
423.0
565.6
–39.0
SG&A expenses
and others
–18.8
R&D
expenses
Three-Year Business Operation / Profit Plan
(Total of FYE March 2017-2019)
FYE March 2017 Consolidated Operating Plan
(¥100/US$)
Net sales
9.8 trillion yen
Original plan
(announced
May 12, 2016)
Revised plan
(announced
August 3, 2016)
Operating Income
1.1 trillion yen
Net sales
3,170 billion yen
3,190 billion yen
Operating Margin
11.2%
Operating Income
420 billion yen
400 billion yen
R&D expenses
360 billion yen (+29%)
Ordinary Income
420 billion yen
410 billion yen
Capital expenses
470 billion yen (+18%)
Net income attributable
to owners of parent
293 billion yen
285 billion yen
Depreciation expenses
290 billion yen (+38%)
Exchange rate
¥105/US$
¥106/US$
Operating income
FYE March 2015
+142.5 billion yen
Operating income
FYE March 2016
( ): vs. previous 3 fiscal-year (FYE March 2017-2019) period
15
Given that exchange rate gains led the Company to expect significant
over-performance in FYE March 2015-2016, we boosted investment
in R&D expenses above our initial plan. Background factors
prompting this decision included the intensifying R&D competition
surrounding environmental features and automated driving.
Heading into 2020, major global markets appear set to further
strengthen their exhaust and fuel efficiency regulations, as seen
by the expanded scope of ZEV (Zero Emission Vehicle) regulations
for 2018 in the U.S. (primarily in California). At the same time,
readers are no doubt aware that development and demonstration
of automated driving technologies is being actively implemented
by the world’s major automobile manufacturers and IT companies.
FHI is proud of our industry-leading EyeSight technology for
preventing accidents before they occur. We aim to preserve that
leading position by evolving our EyeSight technology further as
well as achieve automated driving in quintessentially Subaru
fashion. At the same time, we are aware that we still have gains to
be made in order to catch up with industry frontrunners in terms of
environmental features such as electrification.
FHI has efficiently produced results with what was a
comparatively low level of R&D investment. Going forward,
however, I think it is no surprise that much more robust investment
will be needed to clear the two significant technological hurdles of
environmental features and automated driving.
Furthermore, considering the continued vehicle supply
shortfalls, primarily in North America, larger capital expenditures
are also indispensable for expanding production capacity. We
project production capacity of 400,000 vehicles (which is nearly a
two-fold increase) in the U.S. by the end of 2016, and plan for
further capital expenditures beyond that in order to meet demand.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 95 yen/US$) in our 3-year forecast for consolidated results (FYE
been consistently strengthened according to our plans.
March 2015-2017).
This year, we formulated a new 3-year forecast for consolidated
Current exchange rate fluctuations, however, show a shift in
results (FYE March 2017-2019). We are planning for net sales of
the direction of a weaker yen; operating profit for FYE March 2015
9,800 billion yen, operating profit of 1,100 billion yen, and an 11.2%
In FYE March 2016, FHI (on a consolidated basis) posted record
was 423.0 billion yen (at an exchange rate of 108 yen/US$) and
operating margin (assuming an exchange rate of 100 yen/US$), in
high levels for the fourth straight year in net sales and all income
565.6 billion yen for FYE March 2016 (121 yen/US$). Assumptions of
addition to increased investment in R&D and capital expenditures.
categories. Operating profit came to 565.6 billion yen, an increase
an exchange rate of 105 yen/US$ for FYE March 2017 have us
The new plan demonstrates our management’s resolve to
of 142.5 billion yen year on year. 108.4 billion yen of that amount
expecting operating profit of 420.0 billion yen for that period,
implement the investment necessary to achieve sustainable
was from advantageous exchange rates; however, I see the result
producing a projected 3-year total of 1,400 billion yen*. Recalculating
growth, while also maintaining our industry-leading operating profit
as extremely favorable, given that the actual figure excluding gains
using the initially projected exchange rate of 95 yen/US$ yields
margin going forward.
on foreign exchange was a 34.1 billion yen increase.
870.0 billion yen, which underperforms the target of 1,000 billion
In the Company’s “Prominence 2020” mid-term management
yen. However, this amount includes systematically increased
vision, we are targeting 3-year total net sales of 8,000 billion yen and
investments in future growth through greater R&D and capital
operating profit of 1,000 billion yen (assuming an exchange rate of
expenditures, and we are confident that our real profitability has
Current free cash flows are judged to be at a level sufficient
for maintaining the Company’s sustained growth, though we
would like to adjust our cash position going forward so that we
maintain a healthy financial standing, while keeping the balance
with ROE in mind.
FHI’s fundamental capital policy is to keep a high balance
between shareholders’ equity and ROE. ROE for FYE March 2016
reached the very high level of 36.9%, though this was due to
uncommon circumstances and is forecast to decline with time.
We see strategic capital costs at approximately 8% and we would
like to maintain ROE at roughly twice that for as long as possible.
dividend. We plan to retire all of the shares bought back. Our
possible, dividends cuts from profit fluctuations, and that is the
fundamental stance of delivering returns of profit to shareholders
reason why we utilize a range for our consolidated payout ratio.
through a dividend is unchanged; however, we would also like to
In working to be “a high-quality company that is not big in size
consider the approach like the share buyback carried out this year
but has distinctive strength”—a stance we outlined in our
The shareholder returns aspect of FHI’s capital policy is to pay a
as an additional means for handling one-time profits that occur.
mid-term management vision “Prominence 2020”—FHI aims to
continuous dividend while considering performance-linked
The annual dividend payment for FYE March 2016 was 144
achieve sustainable growth, maintain our industry-leading level of
benefits. The dividend each fiscal year is determined based on a
yen per share (72-yen half-year and 72-yen year-end dividends), a
profitability, increase corporate value, and meet the expectations
20-40% consolidated payout ratio and takes a variety of conditions
76-yen increase year on year. We forecast a dip in profit for FYE
of shareholders.
into consideration. Based on our policy of paying a continuous
March 2017 due to foreign exchange impacts, though we plan to
Thank you for your understanding and ongoing support for
dividend, we decided to use nearly the same amount as the
maintain the 144-yen (72-yen half-year and 72-yen year-end)
the future.
one-time profit (48.2 billion yen) gained from the Ministry of
dividend per share by raising the payout ratio. While we link our
Defense helicopter lawsuit for a share buyback, as opposed to a
dividend with performance results, we aim to avoid, as much as
Message from our CFO
Expanding investment in future growth, while
maintaining our industry-leading operating profit margin.
Balancing shareholders’ equity and ROE at high levels,
while maintaining an optimal cash position.
In tandem with our performance growth, FHI’s capacity for cash flow
generation is steadily increasing. Free cash flows for FYE March 2016
were 358.6 billion yen. This was a marked increase over FYE March
2015 (138.8 billion yen), which had special temporary factors including
a cash-out equivalent to a year and half of corporate taxes, and FYE
March 2014 (279.1 billion yen), which saw an almost 50 billion yen
cash inflow from the sale of Polaris (U.S.) stock and an unrecorded
expense of approximately 90 billion yen cash-out for corporate tax,
due to net operating loss carryforwards from past terms.
Given that exchange rate gains led the Company to expect significant
over-performance in FYE March 2015-2016, we boosted investment
in R&D expenses above our initial plan. Background factors
prompting this decision included the intensifying R&D competition
surrounding environmental features and automated driving.
Heading into 2020, major global markets appear set to further
strengthen their exhaust and fuel efficiency regulations, as seen
by the expanded scope of ZEV (Zero Emission Vehicle) regulations
for 2018 in the U.S. (primarily in California). At the same time,
readers are no doubt aware that development and demonstration
of automated driving technologies is being actively implemented
by the world’s major automobile manufacturers and IT companies.
FHI is proud of our industry-leading EyeSight technology for
preventing accidents before they occur. We aim to preserve that
leading position by evolving our EyeSight technology further as
well as achieve automated driving in quintessentially Subaru
fashion. At the same time, we are aware that we still have gains to
be made in order to catch up with industry frontrunners in terms of
environmental features such as electrification.
FHI has efficiently produced results with what was a
comparatively low level of R&D investment. Going forward,
however, I think it is no surprise that much more robust investment
will be needed to clear the two significant technological hurdles of
environmental features and automated driving.
Furthermore, considering the continued vehicle supply
shortfalls, primarily in North America, larger capital expenditures
are also indispensable for expanding production capacity. We
project production capacity of 400,000 vehicles (which is nearly a
two-fold increase) in the U.S. by the end of 2016, and plan for
further capital expenditures beyond that in order to meet demand.
Free Cash Flow / Ratio of Shareholders' Equity to Total Assets
Years ended March 31
Free Cash Flow
Ratio of Shareholders' Equity to Total Assets
ROE
Years ended March 31
(Billions of yen)
400
(%)
80
(%)
40
358.6
279.1
60
30
46.5
51.8
37.7
40.5
40
20
138.8
95.3
20
10
8.9
33.3
28.3
300
200
100
0
36.9
30.4
29.3
22.9
2012
2013
2014
2015
2016
0
0
2012
2013
2014
2015
2016
16
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 95 yen/US$) in our 3-year forecast for consolidated results (FYE
95 yen/US$) in our 3-year forecast for consolidated results (FYE
been consistently strengthened according to our plans.
been consistently strengthened according to our plans.
March 2015-2017).
March 2015-2017).
This year, we formulated a new 3-year forecast for consolidated
This year, we formulated a new 3-year forecast for consolidated
Current exchange rate fluctuations, however, show a shift in
Current exchange rate fluctuations, however, show a shift in
results (FYE March 2017-2019). We are planning for net sales of
results (FYE March 2017-2019). We are planning for net sales of
the direction of a weaker yen; operating profit for FYE March 2015
the direction of a weaker yen; operating profit for FYE March 2015
9,800 billion yen, operating profit of 1,100 billion yen, and an 11.2%
9,800 billion yen, operating profit of 1,100 billion yen, and an 11.2%
In FYE March 2016, FHI (on a consolidated basis) posted record
In FYE March 2016, FHI (on a consolidated basis) posted record
was 423.0 billion yen (at an exchange rate of 108 yen/US$) and
was 423.0 billion yen (at an exchange rate of 108 yen/US$) and
operating margin (assuming an exchange rate of 100 yen/US$), in
operating margin (assuming an exchange rate of 100 yen/US$), in
high levels for the fourth straight year in net sales and all income
high levels for the fourth straight year in net sales and all income
565.6 billion yen for FYE March 2016 (121 yen/US$). Assumptions of
565.6 billion yen for FYE March 2016 (121 yen/US$). Assumptions of
addition to increased investment in R&D and capital expenditures.
addition to increased investment in R&D and capital expenditures.
categories. Operating profit came to 565.6 billion yen, an increase
categories. Operating profit came to 565.6 billion yen, an increase
an exchange rate of 105 yen/US$ for FYE March 2017 have us
an exchange rate of 105 yen/US$ for FYE March 2017 have us
The new plan demonstrates our management’s resolve to
The new plan demonstrates our management’s resolve to
of 142.5 billion yen year on year. 108.4 billion yen of that amount
of 142.5 billion yen year on year. 108.4 billion yen of that amount
expecting operating profit of 420.0 billion yen for that period,
expecting operating profit of 420.0 billion yen for that period,
implement the investment necessary to achieve sustainable
implement the investment necessary to achieve sustainable
was from advantageous exchange rates; however, I see the result
was from advantageous exchange rates; however, I see the result
producing a projected 3-year total of 1,400 billion yen*. Recalculating
producing a projected 3-year total of 1,400 billion yen*. Recalculating
growth, while also maintaining our industry-leading operating profit
growth, while also maintaining our industry-leading operating profit
as extremely favorable, given that the actual figure excluding gains
as extremely favorable, given that the actual figure excluding gains
using the initially projected exchange rate of 95 yen/US$ yields
using the initially projected exchange rate of 95 yen/US$ yields
margin going forward.
margin going forward.
on foreign exchange was a 34.1 billion yen increase.
on foreign exchange was a 34.1 billion yen increase.
870.0 billion yen, which underperforms the target of 1,000 billion
870.0 billion yen, which underperforms the target of 1,000 billion
In the Company’s “Prominence 2020” mid-term management
In the Company’s “Prominence 2020” mid-term management
yen. However, this amount includes systematically increased
yen. However, this amount includes systematically increased
vision, we are targeting 3-year total net sales of 8,000 billion yen and
vision, we are targeting 3-year total net sales of 8,000 billion yen and
investments in future growth through greater R&D and capital
investments in future growth through greater R&D and capital
operating profit of 1,000 billion yen (assuming an exchange rate of
operating profit of 1,000 billion yen (assuming an exchange rate of
expenditures, and we are confident that our real profitability has
expenditures, and we are confident that our real profitability has
Message from our CFO
Message from our CFO
Expanding investment in future growth, while
Balancing shareholders’ equity and ROE at high levels,
maintaining our industry-leading operating profit margin.
while maintaining an optimal cash position.
Current free cash flows are judged to be at a level sufficient
Current free cash flows are judged to be at a level sufficient
for maintaining the Company’s sustained growth, though we
for maintaining the Company’s sustained growth, though we
would like to adjust our cash position going forward so that we
would like to adjust our cash position going forward so that we
Given that exchange rate gains led the Company to expect significant
Given that exchange rate gains led the Company to expect significant
In tandem with our performance growth, FHI’s capacity for cash flow
In tandem with our performance growth, FHI’s capacity for cash flow
maintain a healthy financial standing, while keeping the balance
maintain a healthy financial standing, while keeping the balance
over-performance in FYE March 2015-2016, we boosted investment
over-performance in FYE March 2015-2016, we boosted investment
generation is steadily increasing. Free cash flows for FYE March 2016
generation is steadily increasing. Free cash flows for FYE March 2016
with ROE in mind.
with ROE in mind.
in R&D expenses above our initial plan. Background factors
in R&D expenses above our initial plan. Background factors
were 358.6 billion yen. This was a marked increase over FYE March
were 358.6 billion yen. This was a marked increase over FYE March
FHI’s fundamental capital policy is to keep a high balance
FHI’s fundamental capital policy is to keep a high balance
prompting this decision included the intensifying R&D competition
prompting this decision included the intensifying R&D competition
2015 (138.8 billion yen), which had special temporary factors including
2015 (138.8 billion yen), which had special temporary factors including
between shareholders’ equity and ROE. ROE for FYE March 2016
between shareholders’ equity and ROE. ROE for FYE March 2016
surrounding environmental features and automated driving.
surrounding environmental features and automated driving.
a cash-out equivalent to a year and half of corporate taxes, and FYE
a cash-out equivalent to a year and half of corporate taxes, and FYE
reached the very high level of 36.9%, though this was due to
reached the very high level of 36.9%, though this was due to
Heading into 2020, major global markets appear set to further
Heading into 2020, major global markets appear set to further
March 2014 (279.1 billion yen), which saw an almost 50 billion yen
March 2014 (279.1 billion yen), which saw an almost 50 billion yen
uncommon circumstances and is forecast to decline with time.
uncommon circumstances and is forecast to decline with time.
strengthen their exhaust and fuel efficiency regulations, as seen
strengthen their exhaust and fuel efficiency regulations, as seen
cash inflow from the sale of Polaris (U.S.) stock and an unrecorded
cash inflow from the sale of Polaris (U.S.) stock and an unrecorded
We see strategic capital costs at approximately 8% and we would
We see strategic capital costs at approximately 8% and we would
by the expanded scope of ZEV (Zero Emission Vehicle) regulations
by the expanded scope of ZEV (Zero Emission Vehicle) regulations
expense of approximately 90 billion yen cash-out for corporate tax,
expense of approximately 90 billion yen cash-out for corporate tax,
like to maintain ROE at roughly twice that for as long as possible.
like to maintain ROE at roughly twice that for as long as possible.
for 2018 in the U.S. (primarily in California). At the same time,
for 2018 in the U.S. (primarily in California). At the same time,
due to net operating loss carryforwards from past terms.
due to net operating loss carryforwards from past terms.
Achieving continuous dividend payments within a
20-40% consolidated payout ratio range linked with
performance results.
The shareholder returns aspect of FHI’s capital policy is to pay a
The shareholder returns aspect of FHI’s capital policy is to pay a
continuous dividend while considering performance-linked
continuous dividend while considering performance-linked
benefits. The dividend each fiscal year is determined based on a
benefits. The dividend each fiscal year is determined based on a
20-40% consolidated payout ratio and takes a variety of conditions
20-40% consolidated payout ratio and takes a variety of conditions
into consideration. Based on our policy of paying a continuous
into consideration. Based on our policy of paying a continuous
dividend, we decided to use nearly the same amount as the
dividend, we decided to use nearly the same amount as the
one-time profit (48.2 billion yen) gained from the Ministry of
one-time profit (48.2 billion yen) gained from the Ministry of
Defense helicopter lawsuit for a share buyback, as opposed to a
Defense helicopter lawsuit for a share buyback, as opposed to a
dividend. We plan to retire all of the shares bought back. Our
dividend. We plan to retire all of the shares bought back. Our
fundamental stance of delivering returns of profit to shareholders
fundamental stance of delivering returns of profit to shareholders
through a dividend is unchanged; however, we would also like to
through a dividend is unchanged; however, we would also like to
consider the approach like the share buyback carried out this year
consider the approach like the share buyback carried out this year
as an additional means for handling one-time profits that occur.
as an additional means for handling one-time profits that occur.
The annual dividend payment for FYE March 2016 was 144
The annual dividend payment for FYE March 2016 was 144
yen per share (72-yen half-year and 72-yen year-end dividends), a
yen per share (72-yen half-year and 72-yen year-end dividends), a
76-yen increase year on year. We forecast a dip in profit for FYE
76-yen increase year on year. We forecast a dip in profit for FYE
March 2017 due to foreign exchange impacts, though we plan to
March 2017 due to foreign exchange impacts, though we plan to
maintain the 144-yen (72-yen half-year and 72-yen year-end)
maintain the 144-yen (72-yen half-year and 72-yen year-end)
dividend per share by raising the payout ratio. While we link our
dividend per share by raising the payout ratio. While we link our
dividend with performance results, we aim to avoid, as much as
dividend with performance results, we aim to avoid, as much as
possible, dividends cuts from profit fluctuations, and that is the
possible, dividends cuts from profit fluctuations, and that is the
reason why we utilize a range for our consolidated payout ratio.
reason why we utilize a range for our consolidated payout ratio.
In working to be “a high-quality company that is not big in size
In working to be “a high-quality company that is not big in size
but has distinctive strength”—a stance we outlined in our
but has distinctive strength”—a stance we outlined in our
mid-term management vision “Prominence 2020”—FHI aims to
mid-term management vision “Prominence 2020”—FHI aims to
achieve sustainable growth, maintain our industry-leading level of
achieve sustainable growth, maintain our industry-leading level of
profitability, increase corporate value, and meet the expectations
profitability, increase corporate value, and meet the expectations
of shareholders.
of shareholders.
Thank you for your understanding and ongoing support for
Thank you for your understanding and ongoing support for
the future.
the future.
fashion. At the same time, we are aware that we still have gains to
fashion. At the same time, we are aware that we still have gains to
Free Cash Flow / Ratio of Shareholders' Equity to Total Assets
ROE
be made in order to catch up with industry frontrunners in terms of
be made in order to catch up with industry frontrunners in terms of
environmental features such as electrification.
environmental features such as electrification.
Years ended March 31
Free Cash Flow
(Billions of yen)
FHI has efficiently produced results with what was a
FHI has efficiently produced results with what was a
400
Ratio of Shareholders' Equity to Total Assets
Years ended March 31
(%)
80
(%)
40
358.6
readers are no doubt aware that development and demonstration
readers are no doubt aware that development and demonstration
of automated driving technologies is being actively implemented
of automated driving technologies is being actively implemented
by the world’s major automobile manufacturers and IT companies.
by the world’s major automobile manufacturers and IT companies.
FHI is proud of our industry-leading EyeSight technology for
FHI is proud of our industry-leading EyeSight technology for
preventing accidents before they occur. We aim to preserve that
preventing accidents before they occur. We aim to preserve that
leading position by evolving our EyeSight technology further as
leading position by evolving our EyeSight technology further as
well as achieve automated driving in quintessentially Subaru
well as achieve automated driving in quintessentially Subaru
comparatively low level of R&D investment. Going forward,
comparatively low level of R&D investment. Going forward,
however, I think it is no surprise that much more robust investment
however, I think it is no surprise that much more robust investment
will be needed to clear the two significant technological hurdles of
will be needed to clear the two significant technological hurdles of
environmental features and automated driving.
environmental features and automated driving.
Furthermore, considering the continued vehicle supply
Furthermore, considering the continued vehicle supply
shortfalls, primarily in North America, larger capital expenditures
shortfalls, primarily in North America, larger capital expenditures
are also indispensable for expanding production capacity. We
are also indispensable for expanding production capacity. We
project production capacity of 400,000 vehicles (which is nearly a
project production capacity of 400,000 vehicles (which is nearly a
two-fold increase) in the U.S. by the end of 2016, and plan for
two-fold increase) in the U.S. by the end of 2016, and plan for
further capital expenditures beyond that in order to meet demand.
further capital expenditures beyond that in order to meet demand.
36.9
30.4
29.3
22.9
279.1
60
30
46.5
51.8
37.7
40.5
40
20
138.8
95.3
20
10
8.9
300
200
100
0
33.3
28.3
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
0
0
(yen)
150
120
90
60
30
0
Dividend per share / Dividend Payout Ratio
Years ended March 31
Dividend per share
Dividend Payout Ratio
144
(%)
30
25.7
20.0
20.3
68
53
18.3
9
9.8
15
2012
2013
2014
2015
2016
20
10
0
17
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 The roots of Fuji Heavy Industries lie in the Nakajima Aircraft
putting it at the forefront of a global trend to switch to front-wheel-
Company as an aircraft manufacturer. Founded in 1917 makes next
drive on compact vehicles.
year our 100th year anniversary. A great number of airplanes were
In Japan, frontal crash safety standards started to be applied in
developed and produced in the days of the Nakajima Aircraft
April, 1994 but if we take a look back 29 years prior to this, Subaru
Company. The uncompromising pursuit of safety performance and
had already been working on frontal crash safety testing voluntarily
rational design that had developed because of the fact that we
on the “Subaru 360” since 1965. Following this, based on a safety
were an airplane manufacturer has been passed down over
concept to protect not only the driver but also the passengers as
generations as the car making DNA of Subaru.
well as pedestrians, crash safety data in various forms such as
The “Subaru 360” is a mini vehicle that was released in 1958
rollovers and rear end collisions has been accumulated as we have
but, regardless of being a mini vehicle, it was the first time anyone
continued with development of unique safety technologies to
had adopted a monocoque body in Japan to realize a revolutionary
where we stand now.
package that fit four adult passengers comfortably while keeping
In this way, here at Subaru, where we have worked on safety
the vehicle compact and lightweight. The “Subaru 1000,” that was
for over half a century, we currently view safety for car making
released in 1966, adopted an all-aluminum horizontally-opposed
from four angles: “Primary Safety,” “Active Safety,” “Pre-Collision
four-cylinder engine and a front-engine front-wheel-drive system,
Safety,” and “Passive Safety.” “Primary Safety,” “Active Safety,” and
“Pre-Collision Safety” are technologies that have the purpose of
avoiding an accident before it happens and “Passive Safety” is
technologies that have the purpose of minimizing damage in the
event of an accident.
In “Primary Safety,” we develop vehicles with evaluation
criteria in designing such as excellent visibility, driving positions that
make driving easy, intuitive interfaces, etc. so that driver fatigue is
reduced, allowing the driver to concentrate on driving with peace
of mind.
“Active Safety” features the low center of gravity design of the
body that takes advantage of the horizontally-opposed engine and
symmetrical AWD that makes sure-footed driving possible in a
wide variety of road surface conditions. Having a low center of
gravity makes it easy for anyone to drive straight with peace of
mind and corner smoothly.
In terms of “Pre-Collision Safety,” the core technology is
Special Feature
Innovativeness of the Subaru Global Platform
that will Serve as the Backbone of
Next Generation Automobile Manufacturing
Subaru has provided “enjoyment and peace of mind” to customers around the world through
“Human Centered Automobile Manufacturing.” The core technology that will greatly evolve
Subaru’s next generation automobile manufacturing is the “Subaru Global Platform.”
SUBARU
GLOBAL
PLATFORM
18
vehicles feel the enjoyment, we have placed importance on the
The EyeSight that has been well received by customers for
“feelings” of customers in the developments. We have improved
safety will also continue to improve safety levels going forward.
“enhanced dynamic feel” of the vehicle so the enjoyment and how
The EyeSight will also react to and stop for bicycles that are
great it feels to drive straight and take turns intuitively could be felt
encountered in intersections, and provide automated driving that
with the senses.
can also cover lane changes on expressways on a mass production
To have the user feel a sense of security the moment he/she
vehicle. Of course, automated driving for Subaru does not mean
steps into the vehicle, sits downs, and closes the door. To have the
unmanned driving; it is automated driving that is centered on the
user feel a solid rumble when turning the engine on and feel that
customer. It will also be fun and safe automated driving.
smoothness as he/she steps on the accelerator pedal and starts to pull
All of the functions described above have been incorporated
away from a stop. The vehicle runs so straight that the customer
on vehicles with the Subaru Global Platform.
forgets about the existence of the steering wheel and when cornering,
It is a platform that polishes up on the world’s highest level of
the vehicle turns exactly in line with the image that the customer has
safety performance, realizes safety performance that anticipates
in mind when a turning maneuver is made on the steering wheel. To
2025 that not only will have high performance but have a
have the car move linearly interlocked to what the customer has in
performance feel of movement that fits the human senses that
mind. This kind of relationship with the vehicle is what we have
can be understood by users the moment they step into the vehicle
prepared in our vehicles so that the enjoyment can be truly felt.
and that point in time that the car takes off. This platform will also
Moreover, to expand extend the enjoyment of customers
be able to accommodate electrification as well as electric vehicles
further from the perspective of making “living life” for our
that will be key for future environment requirement compliance
customers richer, we eliminate or avoid unnecessary packaging,
and furthermore will also be incorporated into automated driving.
pursue and utility, and have developed a vehicle that will be able to
The Subaru Global Platform will be equipped on the next
“EyeSight.” It is a system that recognizes what is in front of the
work in various situations with customers.
generation Impreza that will be released for sale this fall, then it will
vehicle with two cameras that function similarly to human eyes
In addition to the development of new small displacement turbo
be adopted on all independently developed vehicles by Subaru.
to provide safe protection with the car in front, pedestrians, and
engines that realizes significant fuel economy efficiency and hybrids
Designs of cars that express these functionalities are designs
bicycles. Last year, actual market results were released showing
(HV) that many of our current customers still use, we are also
that exude the “enjoyment and peace of mind” of Subaru. Integrated
a 61% reduction in accidents resulting in human injury or death
developing Plug-In Hybrid Electric Vehicles (PHEV) that can also be
under a concept called DYNAMIC×SOLID that comes with a lively
for vehicles equipped with EyeSight. Subaru will continue to
charged at home that is now under development for the US market
and solid feel that has the Subaru touch, all Subaru vehicles will have
evolve “EyeSight” greatly going forward and focus our efforts on
and Electric Vehicles (EV) that aiming for a market launch in 2021.
the unified design to be brought to our customers everywhere.
protecting the lives of Subaru customers around the world.
In terms of “Passive Safety,” even if a crash was to take place,
with the key concept of protecting the integrity of the cabin by
smoothly crushing the front zone of the vehicle in an extremely
short amount of time in mind, we develop a collision system that
can adeptly cope with the actual market. Subaru has continued to
research crash safety performance independently since the days
of the “Subaru 360” and has garnered the highest level of rating in
all safety performance tests performed by third parties in countries
around the world.
Synchronized with the making of cars built with a safety
concept as reliable technologies as the fundamentals of the
vehicle, we
follow
the “Human Centered Automobile
Manufacturing” concept so that the customers that use our
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Special Feature
Innovativeness of the Subaru Global Platform that will Serve
as the Backbone of Next Generation Automobile Manufacturing
The DNA of Subaru that Underlies the Subaru Global Platform
Facilitates “Enjoyment and Peace of Mind”
Naoto Muto
Director of the Board
Corporate Executive Vice President
The roots of Fuji Heavy Industries lie in the Nakajima Aircraft
Company as an aircraft manufacturer. Founded in 1917 makes next
year our 100th year anniversary. A great number of airplanes were
developed and produced in the days of the Nakajima Aircraft
Company. The uncompromising pursuit of safety performance and
rational design that had developed because of the fact that we
were an airplane manufacturer has been passed down over
generations as the car making DNA of Subaru.
The “Subaru 360” is a mini vehicle that was released in 1958
but, regardless of being a mini vehicle, it was the first time anyone
had adopted a monocoque body in Japan to realize a revolutionary
package that fit four adult passengers comfortably while keeping
the vehicle compact and lightweight. The “Subaru 1000,” that was
released in 1966, adopted an all-aluminum horizontally-opposed
four-cylinder engine and a front-engine front-wheel-drive system,
The Roots of Fuji Heavy Industries:
The DNA of an Airplane Manufacturer
Pursuit of
ultimate
performance
Condensed
vehicle package
without waste
Uncompromising
pursuit of safety
in any
environment
19
putting it at the forefront of a global trend to switch to front-wheel-
drive on compact vehicles.
In Japan, frontal crash safety standards started to be applied in
April, 1994 but if we take a look back 29 years prior to this, Subaru
had already been working on frontal crash safety testing voluntarily
on the “Subaru 360” since 1965. Following this, based on a safety
concept to protect not only the driver but also the passengers as
well as pedestrians, crash safety data in various forms such as
rollovers and rear end collisions has been accumulated as we have
continued with development of unique safety technologies to
where we stand now.
In this way, here at Subaru, where we have worked on safety
for over half a century, we currently view safety for car making
from four angles: “Primary Safety,” “Active Safety,” “Pre-Collision
Safety,” and “Passive Safety.” “Primary Safety,” “Active Safety,” and
“Pre-Collision Safety” are technologies that have the purpose of
avoiding an accident before it happens and “Passive Safety” is
technologies that have the purpose of minimizing damage in the
event of an accident.
In “Primary Safety,” we develop vehicles with evaluation
criteria in designing such as excellent visibility, driving positions that
make driving easy, intuitive interfaces, etc. so that driver fatigue is
reduced, allowing the driver to concentrate on driving with peace
of mind.
“Active Safety” features the low center of gravity design of the
body that takes advantage of the horizontally-opposed engine and
symmetrical AWD that makes sure-footed driving possible in a
wide variety of road surface conditions. Having a low center of
gravity makes it easy for anyone to drive straight with peace of
mind and corner smoothly.
In terms of “Pre-Collision Safety,” the core technology is
SUBARU
GLOBAL
PLATFORM
vehicles feel the enjoyment, we have placed importance on the
The EyeSight that has been well received by customers for
“feelings” of customers in the developments. We have improved
safety will also continue to improve safety levels going forward.
“enhanced dynamic feel” of the vehicle so the enjoyment and how
The EyeSight will also react to and stop for bicycles that are
great it feels to drive straight and take turns intuitively could be felt
encountered in intersections, and provide automated driving that
with the senses.
can also cover lane changes on expressways on a mass production
To have the user feel a sense of security the moment he/she
vehicle. Of course, automated driving for Subaru does not mean
steps into the vehicle, sits downs, and closes the door. To have the
unmanned driving; it is automated driving that is centered on the
user feel a solid rumble when turning the engine on and feel that
customer. It will also be fun and safe automated driving.
smoothness as he/she steps on the accelerator pedal and starts to pull
All of the functions described above have been incorporated
away from a stop. The vehicle runs so straight that the customer
on vehicles with the Subaru Global Platform.
forgets about the existence of the steering wheel and when cornering,
It is a platform that polishes up on the world’s highest level of
the vehicle turns exactly in line with the image that the customer has
safety performance, realizes safety performance that anticipates
in mind when a turning maneuver is made on the steering wheel. To
2025 that not only will have high performance but have a
have the car move linearly interlocked to what the customer has in
performance feel of movement that fits the human senses that
mind. This kind of relationship with the vehicle is what we have
can be understood by users the moment they step into the vehicle
prepared in our vehicles so that the enjoyment can be truly felt.
and that point in time that the car takes off. This platform will also
Moreover, to expand extend the enjoyment of customers
be able to accommodate electrification as well as electric vehicles
further from the perspective of making “living life” for our
that will be key for future environment requirement compliance
customers richer, we eliminate or avoid unnecessary packaging,
and furthermore will also be incorporated into automated driving.
pursue and utility, and have developed a vehicle that will be able to
The Subaru Global Platform will be equipped on the next
“EyeSight.” It is a system that recognizes what is in front of the
work in various situations with customers.
generation Impreza that will be released for sale this fall, then it will
vehicle with two cameras that function similarly to human eyes
In addition to the development of new small displacement turbo
be adopted on all independently developed vehicles by Subaru.
to provide safe protection with the car in front, pedestrians, and
engines that realizes significant fuel economy efficiency and hybrids
Designs of cars that express these functionalities are designs
bicycles. Last year, actual market results were released showing
(HV) that many of our current customers still use, we are also
that exude the “enjoyment and peace of mind” of Subaru. Integrated
a 61% reduction in accidents resulting in human injury or death
developing Plug-In Hybrid Electric Vehicles (PHEV) that can also be
under a concept called DYNAMIC×SOLID that comes with a lively
for vehicles equipped with EyeSight. Subaru will continue to
charged at home that is now under development for the US market
and solid feel that has the Subaru touch, all Subaru vehicles will have
evolve “EyeSight” greatly going forward and focus our efforts on
and Electric Vehicles (EV) that aiming for a market launch in 2021.
the unified design to be brought to our customers everywhere.
protecting the lives of Subaru customers around the world.
In terms of “Passive Safety,” even if a crash was to take place,
with the key concept of protecting the integrity of the cabin by
smoothly crushing the front zone of the vehicle in an extremely
short amount of time in mind, we develop a collision system that
can adeptly cope with the actual market. Subaru has continued to
research crash safety performance independently since the days
of the “Subaru 360” and has garnered the highest level of rating in
all safety performance tests performed by third parties in countries
around the world.
Synchronized with the making of cars built with a safety
concept as reliable technologies as the fundamentals of the
vehicle, we
follow
the “Human Centered Automobile
Manufacturing” concept so that the customers that use our
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 The roots of Fuji Heavy Industries lie in the Nakajima Aircraft
putting it at the forefront of a global trend to switch to front-wheel-
Company as an aircraft manufacturer. Founded in 1917 makes next
drive on compact vehicles.
year our 100th year anniversary. A great number of airplanes were
In Japan, frontal crash safety standards started to be applied in
developed and produced in the days of the Nakajima Aircraft
April, 1994 but if we take a look back 29 years prior to this, Subaru
Company. The uncompromising pursuit of safety performance and
had already been working on frontal crash safety testing voluntarily
rational design that had developed because of the fact that we
on the “Subaru 360” since 1965. Following this, based on a safety
were an airplane manufacturer has been passed down over
concept to protect not only the driver but also the passengers as
generations as the car making DNA of Subaru.
well as pedestrians, crash safety data in various forms such as
The “Subaru 360” is a mini vehicle that was released in 1958
rollovers and rear end collisions has been accumulated as we have
but, regardless of being a mini vehicle, it was the first time anyone
continued with development of unique safety technologies to
had adopted a monocoque body in Japan to realize a revolutionary
where we stand now.
package that fit four adult passengers comfortably while keeping
In this way, here at Subaru, where we have worked on safety
the vehicle compact and lightweight. The “Subaru 1000,” that was
for over half a century, we currently view safety for car making
released in 1966, adopted an all-aluminum horizontally-opposed
from four angles: “Primary Safety,” “Active Safety,” “Pre-Collision
four-cylinder engine and a front-engine front-wheel-drive system,
Safety,” and “Passive Safety.” “Primary Safety,” “Active Safety,” and
“Pre-Collision Safety” are technologies that have the purpose of
avoiding an accident before it happens and “Passive Safety” is
technologies that have the purpose of minimizing damage in the
event of an accident.
In “Primary Safety,” we develop vehicles with evaluation
criteria in designing such as excellent visibility, driving positions that
make driving easy, intuitive interfaces, etc. so that driver fatigue is
reduced, allowing the driver to concentrate on driving with peace
of mind.
“Active Safety” features the low center of gravity design of the
body that takes advantage of the horizontally-opposed engine and
symmetrical AWD that makes sure-footed driving possible in a
wide variety of road surface conditions. Having a low center of
gravity makes it easy for anyone to drive straight with peace of
mind and corner smoothly.
In terms of “Pre-Collision Safety,” the core technology is
For example, when a driver is driving a vehicle, following the
operation of the steering wheel, the forces trying to turn the
vehicle is transmitted from the front wheels to the body and there
is normally about a one tenth of a second delay that occurs until the
The “Subaru Global Platform,” that was developed as a far-sighted
vehicle actually starts to change its orientation. Reducing this slight
technology in the year 2025, is a new platform that will be adopted
delay is what leads to smooth and stable vehicle behavior and
on all forthcoming Subaru vehicles that we independently
improvements in steering feel. Here at Subaru, we have developed
developed starting off with the next generation Impreza. A major
our own original sensors, measured suspension inputs in 1/1000
aim of introducing the Subaru Global Platform is to realize
second unit intervals and measured strain in 200 locations on the
significant evolutions in overall performance, that would have been
vehicle body to quantify the movements of each part of the vehicle.
difficult as just an extension of conventional technologies, by
Furthermore, bench testing equipment that reproduces the
executing a complete overhaul of the platform, which is the basic
movement of the suspension on actual roads was developed and
structure of an automobile, and to facilitate “enjoyment and peace
development of vehicle elements has also progressed.
of mind” which is the greatest appeal of Subaru vehicles. To
Taking this kind of fundamental research and elemental
accomplish this, the element that the development team poured all
developments into consideration, Subaru has established three
of their efforts into was simply the pursuit of “enhanced dynamic
factors to pursue “enhanced dynamic feel” which are (1) being able
feel” that resonates with human senses beyond high performance
to drive straight (straight line stability), (2) having no unpleasant
and “safety performance” at the highest levels in the world.
vibration or noise, and (3) pleasant ride comfort. In order to realize
So what is “enhanced dynamic feel?” It is the performance
these factors in the Subaru Global Platform development, the work
feel that a person driving or riding a car feels, such as operation feel
and drive feel while driving, as well as ride comfort. At Subaru, this
“enhanced dynamic feel” is captured as a combination of three
factors [1] performance feel that is felt when operating the steering
wheel and pedals, [2] performance feel that is felt audibly, [3]
performance feel that is felt from the movement of the vehicle and
as has been done in the past we have pursued a high level of
quality that delves into the realm of human sensations such as
“smoothness” or “how great it feels.” Furthermore, in the
development of the Subaru Global Platform we have attempted to
visualize “enhanced dynamic feel” that had been difficult to
capture as physical values till now.
Safety Philosophy and Four Focus Areas
Safe
state
Hazardous
state
Accident
Collision
Spread of
damage
Hazard
avoidance
Reduction of
damage in
an accident
Primary Safety
- Peace-of-mind visibility design
- Easy-to-drive position
- Easy-to-operate interface
Active Safety
- Symmetrical All-Wheel Drive
- Low center of gravity
- Reassuring chassis
Pre-Collision Safety
- EyeSight
(Significant development
with an eye on automated driving)
Passive Safety
- Protection of vehicle passengers
- Protection of pedestrians
“EyeSight.” It is a system that recognizes what is in front of the
vehicle with two cameras that function similarly to human eyes
to provide safe protection with the car in front, pedestrians, and
bicycles. Last year, actual market results were released showing
a 61% reduction in accidents resulting in human injury or death
for vehicles equipped with EyeSight. Subaru will continue to
evolve “EyeSight” greatly going forward and focus our efforts on
protecting the lives of Subaru customers around the world.
In terms of “Passive Safety,” even if a crash was to take place,
with the key concept of protecting the integrity of the cabin by
smoothly crushing the front zone of the vehicle in an extremely
short amount of time in mind, we develop a collision system that
can adeptly cope with the actual market. Subaru has continued to
research crash safety performance independently since the days
of the “Subaru 360” and has garnered the highest level of rating in
all safety performance tests performed by third parties in countries
around the world.
Synchronized with the making of cars built with a safety
concept as reliable technologies as the fundamentals of the
vehicle, we
the “Human Centered Automobile
Manufacturing” concept so that the customers that use our
follow
vehicles feel the enjoyment, we have placed importance on the
“feelings” of customers in the developments. We have improved
“enhanced dynamic feel” of the vehicle so the enjoyment and how
great it feels to drive straight and take turns intuitively could be felt
with the senses.
To have the user feel a sense of security the moment he/she
steps into the vehicle, sits downs, and closes the door. To have the
user feel a solid rumble when turning the engine on and feel that
smoothness as he/she steps on the accelerator pedal and starts to pull
away from a stop. The vehicle runs so straight that the customer
forgets about the existence of the steering wheel and when cornering,
the vehicle turns exactly in line with the image that the customer has
in mind when a turning maneuver is made on the steering wheel. To
have the car move linearly interlocked to what the customer has in
mind. This kind of relationship with the vehicle is what we have
prepared in our vehicles so that the enjoyment can be truly felt.
Moreover, to expand extend the enjoyment of customers
further from the perspective of making “living life” for our
customers richer, we eliminate or avoid unnecessary packaging,
pursue and utility, and have developed a vehicle that will be able to
work in various situations with customers.
In addition to the development of new small displacement turbo
engines that realizes significant fuel economy efficiency and hybrids
(HV) that many of our current customers still use, we are also
developing Plug-In Hybrid Electric Vehicles (PHEV) that can also be
charged at home that is now under development for the US market
and Electric Vehicles (EV) that aiming for a market launch in 2021.
The EyeSight that has been well received by customers for
safety will also continue to improve safety levels going forward.
The EyeSight will also react to and stop for bicycles that are
encountered in intersections, and provide automated driving that
can also cover lane changes on expressways on a mass production
vehicle. Of course, automated driving for Subaru does not mean
unmanned driving; it is automated driving that is centered on the
customer. It will also be fun and safe automated driving.
All of the functions described above have been incorporated
on vehicles with the Subaru Global Platform.
It is a platform that polishes up on the world’s highest level of
safety performance, realizes safety performance that anticipates
2025 that not only will have high performance but have a
performance feel of movement that fits the human senses that
can be understood by users the moment they step into the vehicle
and that point in time that the car takes off. This platform will also
be able to accommodate electrification as well as electric vehicles
that will be key for future environment requirement compliance
and furthermore will also be incorporated into automated driving.
The Subaru Global Platform will be equipped on the next
generation Impreza that will be released for sale this fall, then it will
be adopted on all independently developed vehicles by Subaru.
Designs of cars that express these functionalities are designs
that exude the “enjoyment and peace of mind” of Subaru. Integrated
under a concept called DYNAMIC×SOLID that comes with a lively
and solid feel that has the Subaru touch, all Subaru vehicles will have
the unified design to be brought to our customers everywhere.
Activities to facilitate enjoyment and peace of mind
Platform
Driver Assist Technology
Design
SUBARU GLOBAL PLATFORM
Subaru best ever levels of overall performance evolutions to
facilitate Subaru’s vehicle manufacturing with enjoyment and
peace of mind.
To achieve Zero Traffic Accidents
Next Generation Subaru Design
Uncompromising pursuit of accident avoidance
performance with the “EyeSight” as the base.
Realize an automated driving function that is
centered on the human as a part of this evolution.
Shapes that are meaningful that
incorporate Subaru characteristic
functionality along with a high level
of dynamism and solid feel.
20
was focused on “significant increases of body and chassis rigidity,”
vehicle by 50% compared to present models.
of safety performance. Among the four focus areas based on the
“pursuit of an even lower center of gravity,” and “evolution of the
Through these activities, next generation Subaru vehicles
Subaru safety concept, the new platform brings major benefits
suspension system.”
equipped with the Subaru Global Platform will provide enhanced
especially in “Active Safety” and “Passive Safety.”
For example, comparing the Subaru Global Platform to current
dynamic feel that will surely dominate not only Japanese vehicles
In terms of “Active Safety,” significant improvements to body
the load transmission paths, adoption of high strength material, as
well as improving collision energy absorption by 40% versus
existing vehicles. These improvements further evolved crash
safety performance that had already achieved the highest level of
vehicles, improvements have been made to the front body lateral
but also top grade European vehicles as well.
and chassis rigidity and even lower center of gravity has improved
steering stability on Subaru cars that had already been rated
highly and had taken it up to the next level. In internal tests, the
next generation Impreza danger avoidance speed has exceeded
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
which achieves levels comparable to European sports cars.
ratings in the world. In the future, compliance to various and
For Subaru that has “Human Centered Automobile Manufacturing”
diverse forms of crashes will be required, and we believe that
at its essence, the ultimate goal for automated driving is not “to
collision energy absorption will have to be improved further by
have the car drive itself in place of the human” but it is “to aim for
more than 30% at around 2025. The Subaru Global Platform is
zero traffic accidents” that threaten human life and assets. Based
designed to have the potential to be able to comply with these
on technical concepts such as these, Subaru will evolve driver
improvements by further increasing strength to higher levels,
assist and automated driving toward the realization of “Zero Traffic
current vehicles. The suspension has also advanced significantly by
Another major objective of introducing the Subaru Global Platform is
At the same time, in terms of “Passive Safety,” body strength
expanding adoption of non-ferrous materials, etc.
Accidents” by the introduction of the Subaru Global Platform and
revising the suspension geometry and improving the rigidity of
the further evolution and enhancement of the world’s highest level
was raised by optimization of the frame structure, multiplexing of
If the rigidity and strength of the vehicle is improved
further advances to high performance and high functionality for the
significantly in this way, it would normally increase weight but
driver assist system “EyeSight.”
the Subaru Global Platform effectively utilizes the amount of
Surveys in Japan have revealed a 61% fewer accidents
weight saved due to the rational design, on performance
resulting in injury or death for vehicles equipped with the
improvements and safety improvements, as a lightweight body
“EyeSight Ver. 2” compared to those without it. If the conditions
that is on par with conventional Subaru vehicles has been made a
of the accidents are broken down further, car-to-car accidents
reality. Moreover, in anticipation of the evolution of vehicles up till
dropped 80%, broadside collisions dropped 50% to demonstrate
2025, starting with gasoline engine vehicles, hybrid vehicles
the benefits the system provides. The latest “EyeSight Ver. 3” that
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
is currently launched in the market has improved performance in
that can accommodate various types of power units. The Subaru
areas such as capabilities to detect obstacles, speed range that
Global Platform that makes overall vehicle performance evolution
the brakes actuate, etc. thus we should be able to expect even
possible such as outstanding straight line stability, high level
further reductions in accident occurrences.
danger avoidance performance, and the world’s highest level of
In terms of activities toward driver assist and automated
crash safety performance, will be an important core technology
driving, automated follow-up system in congested express ways
even in terms of realizing automated driving in the future.
will be added in 2017. This is a function that drives the car at 0 km/h
to 65 km/h on the same lane while recognizing the movements of
the vehicle driving ahead and the conditions of curves in the
roadway with the “EyeSight” in traffic jam on expressways.
Furthermore, in 2020, we plan to add a radar and digital map to the
“EyeSight” that uses only stereo camera technology to realize
automated driving on expressway roads including lane changes.
In this way, by practical implementation placing a priority on driver
assist functions targeting situations with a high risk of becoming an
accident, such as during heavy traffic when drivers are susceptible to
losing their concentration, lane changes that demand careful checks
in the rearward direction, etc. through this the capability of Subaru
vehicles to avoid accidents will be improved exponentially. As a result
of this pursuit of safety performance, we hope to make automated
driving with distinctive Subaru value and provide “enjoyment and
peace of mind” that is one step above to users.
rigidity, body torsional rigidity, front suspension rigidity, and rear
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
Moreover, Subaru cars have traditionally had the characteristic “low
center of gravity design” but on the Subaru Global Platform, an
even lower center of gravity was achieved that is 5mm lower than
mounting points.
As a result of all of these advances, next generation vehicles
that adopted the Subaru Global Platform have realized astounding
straight line stability as if gliding solidly anchored to rails. As the
steering responsive is extremely high, this astounding straight line
stability was made possible by the driver being able to rectify
turbulence of the trajectory path due to factors such as slight
bumpiness to the road surface, side winds, etc.
At the same time in terms of countermeasures for noise and
vibration, conventionally there were certain areas of the body and
suspension that resonated to amplify vibrations but on the "Subaru
Global Platform", the natural frequency of the body is raised by
improving body
rigidity, preventing
resonance with
the
suspension. In addition, as concentration of localized strain was
averted on the subframe mounting points, known to be the portion
that is the weak point for stiffness, and the body’s overall torsional
characteristics were evened out for uniformity, then by optimizing
the body frame structure and utilizing structural adhesive, we have
rationally improved the body rigidity without adding weight.
Furthermore, the amount of mass offset on the strut suspension,
which is a source of vibration input, was also reduced 15% versus
conventional levels which also contributed to reduction in noise
and vibration.
In terms of providing a smooth and comfortable drive,
increasing the rigidity of the body frame brought out the intrinsic
shock damping performance capabilities of the suspension that
enabled quick convergence of vibrations generated by factors such
as bumps in the road, etc. By mounting the rear stabilizer directly
onto the body, the new platform reduces the body roll of the
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 The roots of Fuji Heavy Industries lie in the Nakajima Aircraft
The roots of Fuji Heavy Industries lie in the Nakajima Aircraft
putting it at the forefront of a global trend to switch to front-wheel-
putting it at the forefront of a global trend to switch to front-wheel-
Company as an aircraft manufacturer. Founded in 1917 makes next
Company as an aircraft manufacturer. Founded in 1917 makes next
drive on compact vehicles.
drive on compact vehicles.
year our 100th year anniversary. A great number of airplanes were
year our 100th year anniversary. A great number of airplanes were
In Japan, frontal crash safety standards started to be applied in
In Japan, frontal crash safety standards started to be applied in
developed and produced in the days of the Nakajima Aircraft
developed and produced in the days of the Nakajima Aircraft
April, 1994 but if we take a look back 29 years prior to this, Subaru
April, 1994 but if we take a look back 29 years prior to this, Subaru
Company. The uncompromising pursuit of safety performance and
Company. The uncompromising pursuit of safety performance and
had already been working on frontal crash safety testing voluntarily
had already been working on frontal crash safety testing voluntarily
rational design that had developed because of the fact that we
rational design that had developed because of the fact that we
on the “Subaru 360” since 1965. Following this, based on a safety
on the “Subaru 360” since 1965. Following this, based on a safety
were an airplane manufacturer has been passed down over
were an airplane manufacturer has been passed down over
concept to protect not only the driver but also the passengers as
concept to protect not only the driver but also the passengers as
generations as the car making DNA of Subaru.
generations as the car making DNA of Subaru.
well as pedestrians, crash safety data in various forms such as
well as pedestrians, crash safety data in various forms such as
The “Subaru 360” is a mini vehicle that was released in 1958
The “Subaru 360” is a mini vehicle that was released in 1958
rollovers and rear end collisions has been accumulated as we have
rollovers and rear end collisions has been accumulated as we have
but, regardless of being a mini vehicle, it was the first time anyone
but, regardless of being a mini vehicle, it was the first time anyone
continued with development of unique safety technologies to
continued with development of unique safety technologies to
had adopted a monocoque body in Japan to realize a revolutionary
had adopted a monocoque body in Japan to realize a revolutionary
where we stand now.
where we stand now.
package that fit four adult passengers comfortably while keeping
package that fit four adult passengers comfortably while keeping
In this way, here at Subaru, where we have worked on safety
In this way, here at Subaru, where we have worked on safety
the vehicle compact and lightweight. The “Subaru 1000,” that was
the vehicle compact and lightweight. The “Subaru 1000,” that was
for over half a century, we currently view safety for car making
for over half a century, we currently view safety for car making
released in 1966, adopted an all-aluminum horizontally-opposed
released in 1966, adopted an all-aluminum horizontally-opposed
from four angles: “Primary Safety,” “Active Safety,” “Pre-Collision
from four angles: “Primary Safety,” “Active Safety,” “Pre-Collision
four-cylinder engine and a front-engine front-wheel-drive system,
four-cylinder engine and a front-engine front-wheel-drive system,
Safety,” and “Passive Safety.” “Primary Safety,” “Active Safety,” and
Safety,” and “Passive Safety.” “Primary Safety,” “Active Safety,” and
“Pre-Collision Safety” are technologies that have the purpose of
“Pre-Collision Safety” are technologies that have the purpose of
avoiding an accident before it happens and “Passive Safety” is
avoiding an accident before it happens and “Passive Safety” is
technologies that have the purpose of minimizing damage in the
technologies that have the purpose of minimizing damage in the
event of an accident.
event of an accident.
In “Primary Safety,” we develop vehicles with evaluation
In “Primary Safety,” we develop vehicles with evaluation
criteria in designing such as excellent visibility, driving positions that
criteria in designing such as excellent visibility, driving positions that
make driving easy, intuitive interfaces, etc. so that driver fatigue is
make driving easy, intuitive interfaces, etc. so that driver fatigue is
reduced, allowing the driver to concentrate on driving with peace
reduced, allowing the driver to concentrate on driving with peace
of mind.
of mind.
“Active Safety” features the low center of gravity design of the
“Active Safety” features the low center of gravity design of the
body that takes advantage of the horizontally-opposed engine and
body that takes advantage of the horizontally-opposed engine and
symmetrical AWD that makes sure-footed driving possible in a
symmetrical AWD that makes sure-footed driving possible in a
wide variety of road surface conditions. Having a low center of
wide variety of road surface conditions. Having a low center of
gravity makes it easy for anyone to drive straight with peace of
gravity makes it easy for anyone to drive straight with peace of
mind and corner smoothly.
mind and corner smoothly.
In terms of “Pre-Collision Safety,” the core technology is
In terms of “Pre-Collision Safety,” the core technology is
A New Platform that Anticipates the Year 2025 that will Realize
Subaru’s Best Ever Overall Performance Evolutions
Tetsuo Onuki
Corporate Senior Vice President
Chief General Manager of Subaru Engineering Division 1
Do not stop with just raising performance and specs
and pursue “enhanced dynamic feel” that resonates
with human senses.
The “Subaru Global Platform,” that was developed as a far-sighted
The “Subaru Global Platform,” that was developed as a far-sighted
technology in the year 2025, is a new platform that will be adopted
technology in the year 2025, is a new platform that will be adopted
on all forthcoming Subaru vehicles that we independently
on all forthcoming Subaru vehicles that we independently
developed starting off with the next generation Impreza. A major
developed starting off with the next generation Impreza. A major
aim of introducing the Subaru Global Platform is to realize
aim of introducing the Subaru Global Platform is to realize
significant evolutions in overall performance, that would have been
significant evolutions in overall performance, that would have been
difficult as just an extension of conventional technologies, by
difficult as just an extension of conventional technologies, by
executing a complete overhaul of the platform, which is the basic
executing a complete overhaul of the platform, which is the basic
structure of an automobile, and to facilitate “enjoyment and peace
structure of an automobile, and to facilitate “enjoyment and peace
of mind” which is the greatest appeal of Subaru vehicles. To
of mind” which is the greatest appeal of Subaru vehicles. To
accomplish this, the element that the development team poured all
accomplish this, the element that the development team poured all
of their efforts into was simply the pursuit of “enhanced dynamic
of their efforts into was simply the pursuit of “enhanced dynamic
feel” that resonates with human senses beyond high performance
feel” that resonates with human senses beyond high performance
and “safety performance” at the highest levels in the world.
and “safety performance” at the highest levels in the world.
So what is “enhanced dynamic feel?” It is the performance
So what is “enhanced dynamic feel?” It is the performance
feel that a person driving or riding a car feels, such as operation feel
feel that a person driving or riding a car feels, such as operation feel
and drive feel while driving, as well as ride comfort. At Subaru, this
and drive feel while driving, as well as ride comfort. At Subaru, this
“enhanced dynamic feel” is captured as a combination of three
“enhanced dynamic feel” is captured as a combination of three
factors [1] performance feel that is felt when operating the steering
factors [1] performance feel that is felt when operating the steering
wheel and pedals, [2] performance feel that is felt audibly, [3]
wheel and pedals, [2] performance feel that is felt audibly, [3]
performance feel that is felt from the movement of the vehicle and
performance feel that is felt from the movement of the vehicle and
as has been done in the past we have pursued a high level of
as has been done in the past we have pursued a high level of
quality that delves into the realm of human sensations such as
quality that delves into the realm of human sensations such as
“smoothness” or “how great it feels.” Furthermore, in the
“smoothness” or “how great it feels.” Furthermore, in the
development of the Subaru Global Platform we have attempted to
development of the Subaru Global Platform we have attempted to
visualize “enhanced dynamic feel” that had been difficult to
visualize “enhanced dynamic feel” that had been difficult to
capture as physical values till now.
capture as physical values till now.
21
For example, when a driver is driving a vehicle, following the
For example, when a driver is driving a vehicle, following the
operation of the steering wheel, the forces trying to turn the
operation of the steering wheel, the forces trying to turn the
vehicle is transmitted from the front wheels to the body and there
vehicle is transmitted from the front wheels to the body and there
is normally about a one tenth of a second delay that occurs until the
is normally about a one tenth of a second delay that occurs until the
vehicle actually starts to change its orientation. Reducing this slight
vehicle actually starts to change its orientation. Reducing this slight
delay is what leads to smooth and stable vehicle behavior and
delay is what leads to smooth and stable vehicle behavior and
improvements in steering feel. Here at Subaru, we have developed
improvements in steering feel. Here at Subaru, we have developed
our own original sensors, measured suspension inputs in 1/1000
our own original sensors, measured suspension inputs in 1/1000
second unit intervals and measured strain in 200 locations on the
second unit intervals and measured strain in 200 locations on the
vehicle body to quantify the movements of each part of the vehicle.
vehicle body to quantify the movements of each part of the vehicle.
Furthermore, bench testing equipment that reproduces the
Furthermore, bench testing equipment that reproduces the
movement of the suspension on actual roads was developed and
movement of the suspension on actual roads was developed and
development of vehicle elements has also progressed.
development of vehicle elements has also progressed.
Taking this kind of fundamental research and elemental
Taking this kind of fundamental research and elemental
developments into consideration, Subaru has established three
developments into consideration, Subaru has established three
factors to pursue “enhanced dynamic feel” which are (1) being able
factors to pursue “enhanced dynamic feel” which are (1) being able
to drive straight (straight line stability), (2) having no unpleasant
to drive straight (straight line stability), (2) having no unpleasant
vibration or noise, and (3) pleasant ride comfort. In order to realize
vibration or noise, and (3) pleasant ride comfort. In order to realize
these factors in the Subaru Global Platform development, the work
these factors in the Subaru Global Platform development, the work
Factors that make up enhanced dynamic feel
The Enhanced Dynamic Feel
that Subaru strives for
Subaru
Global Platform
(1) Superior straight-line stability
(2) Having no unpleasant vibrations
or noises
(3) Pleasant ride comfort
•Major improvement of body
and chassis rigidity;
•Pursuit of an even lower
center of gravity
•Evolution of the suspension
70 to 100% rigidity increase
versus current vehicles
Special Feature
Innovativeness of the Subaru Global Platform that will Serve
as the Backbone of Next Generation Automobile Manufacturing
Safety Philosophy and Four Focus Areas
Safe
state
Hazardous
state
Accident
Collision
Spread of
damage
Hazard
avoidance
Reduction of
damage in
an accident
Primary Safety
- Peace-of-mind visibility design
- Easy-to-drive position
- Easy-to-operate interface
Active Safety
- Symmetrical All-Wheel Drive
- Low center of gravity
- Reassuring chassis
Pre-Collision Safety
- EyeSight
(Significant development
with an eye on automated driving)
Passive Safety
- Protection of vehicle passengers
- Protection of pedestrians
vehicles feel the enjoyment, we have placed importance on the
vehicles feel the enjoyment, we have placed importance on the
The EyeSight that has been well received by customers for
The EyeSight that has been well received by customers for
“feelings” of customers in the developments. We have improved
“feelings” of customers in the developments. We have improved
safety will also continue to improve safety levels going forward.
safety will also continue to improve safety levels going forward.
“enhanced dynamic feel” of the vehicle so the enjoyment and how
“enhanced dynamic feel” of the vehicle so the enjoyment and how
The EyeSight will also react to and stop for bicycles that are
The EyeSight will also react to and stop for bicycles that are
great it feels to drive straight and take turns intuitively could be felt
great it feels to drive straight and take turns intuitively could be felt
encountered in intersections, and provide automated driving that
encountered in intersections, and provide automated driving that
with the senses.
with the senses.
can also cover lane changes on expressways on a mass production
can also cover lane changes on expressways on a mass production
To have the user feel a sense of security the moment he/she
To have the user feel a sense of security the moment he/she
vehicle. Of course, automated driving for Subaru does not mean
vehicle. Of course, automated driving for Subaru does not mean
steps into the vehicle, sits downs, and closes the door. To have the
steps into the vehicle, sits downs, and closes the door. To have the
unmanned driving; it is automated driving that is centered on the
unmanned driving; it is automated driving that is centered on the
user feel a solid rumble when turning the engine on and feel that
user feel a solid rumble when turning the engine on and feel that
customer. It will also be fun and safe automated driving.
customer. It will also be fun and safe automated driving.
smoothness as he/she steps on the accelerator pedal and starts to pull
smoothness as he/she steps on the accelerator pedal and starts to pull
All of the functions described above have been incorporated
All of the functions described above have been incorporated
away from a stop. The vehicle runs so straight that the customer
away from a stop. The vehicle runs so straight that the customer
on vehicles with the Subaru Global Platform.
on vehicles with the Subaru Global Platform.
forgets about the existence of the steering wheel and when cornering,
forgets about the existence of the steering wheel and when cornering,
It is a platform that polishes up on the world’s highest level of
It is a platform that polishes up on the world’s highest level of
the vehicle turns exactly in line with the image that the customer has
the vehicle turns exactly in line with the image that the customer has
safety performance, realizes safety performance that anticipates
safety performance, realizes safety performance that anticipates
in mind when a turning maneuver is made on the steering wheel. To
in mind when a turning maneuver is made on the steering wheel. To
2025 that not only will have high performance but have a
2025 that not only will have high performance but have a
have the car move linearly interlocked to what the customer has in
have the car move linearly interlocked to what the customer has in
performance feel of movement that fits the human senses that
performance feel of movement that fits the human senses that
mind. This kind of relationship with the vehicle is what we have
mind. This kind of relationship with the vehicle is what we have
can be understood by users the moment they step into the vehicle
can be understood by users the moment they step into the vehicle
prepared in our vehicles so that the enjoyment can be truly felt.
prepared in our vehicles so that the enjoyment can be truly felt.
and that point in time that the car takes off. This platform will also
and that point in time that the car takes off. This platform will also
Moreover, to expand extend the enjoyment of customers
Moreover, to expand extend the enjoyment of customers
be able to accommodate electrification as well as electric vehicles
be able to accommodate electrification as well as electric vehicles
further from the perspective of making “living life” for our
further from the perspective of making “living life” for our
that will be key for future environment requirement compliance
that will be key for future environment requirement compliance
customers richer, we eliminate or avoid unnecessary packaging,
customers richer, we eliminate or avoid unnecessary packaging,
and furthermore will also be incorporated into automated driving.
and furthermore will also be incorporated into automated driving.
pursue and utility, and have developed a vehicle that will be able to
pursue and utility, and have developed a vehicle that will be able to
The Subaru Global Platform will be equipped on the next
The Subaru Global Platform will be equipped on the next
“EyeSight.” It is a system that recognizes what is in front of the
“EyeSight.” It is a system that recognizes what is in front of the
work in various situations with customers.
work in various situations with customers.
generation Impreza that will be released for sale this fall, then it will
generation Impreza that will be released for sale this fall, then it will
vehicle with two cameras that function similarly to human eyes
vehicle with two cameras that function similarly to human eyes
In addition to the development of new small displacement turbo
In addition to the development of new small displacement turbo
be adopted on all independently developed vehicles by Subaru.
be adopted on all independently developed vehicles by Subaru.
to provide safe protection with the car in front, pedestrians, and
to provide safe protection with the car in front, pedestrians, and
engines that realizes significant fuel economy efficiency and hybrids
engines that realizes significant fuel economy efficiency and hybrids
Designs of cars that express these functionalities are designs
Designs of cars that express these functionalities are designs
bicycles. Last year, actual market results were released showing
bicycles. Last year, actual market results were released showing
(HV) that many of our current customers still use, we are also
(HV) that many of our current customers still use, we are also
that exude the “enjoyment and peace of mind” of Subaru. Integrated
that exude the “enjoyment and peace of mind” of Subaru. Integrated
a 61% reduction in accidents resulting in human injury or death
a 61% reduction in accidents resulting in human injury or death
developing Plug-In Hybrid Electric Vehicles (PHEV) that can also be
developing Plug-In Hybrid Electric Vehicles (PHEV) that can also be
under a concept called DYNAMIC×SOLID that comes with a lively
under a concept called DYNAMIC×SOLID that comes with a lively
for vehicles equipped with EyeSight. Subaru will continue to
for vehicles equipped with EyeSight. Subaru will continue to
charged at home that is now under development for the US market
charged at home that is now under development for the US market
and solid feel that has the Subaru touch, all Subaru vehicles will have
and solid feel that has the Subaru touch, all Subaru vehicles will have
evolve “EyeSight” greatly going forward and focus our efforts on
evolve “EyeSight” greatly going forward and focus our efforts on
and Electric Vehicles (EV) that aiming for a market launch in 2021.
and Electric Vehicles (EV) that aiming for a market launch in 2021.
the unified design to be brought to our customers everywhere.
the unified design to be brought to our customers everywhere.
protecting the lives of Subaru customers around the world.
protecting the lives of Subaru customers around the world.
In terms of “Passive Safety,” even if a crash was to take place,
In terms of “Passive Safety,” even if a crash was to take place,
with the key concept of protecting the integrity of the cabin by
with the key concept of protecting the integrity of the cabin by
smoothly crushing the front zone of the vehicle in an extremely
smoothly crushing the front zone of the vehicle in an extremely
short amount of time in mind, we develop a collision system that
short amount of time in mind, we develop a collision system that
can adeptly cope with the actual market. Subaru has continued to
can adeptly cope with the actual market. Subaru has continued to
research crash safety performance independently since the days
research crash safety performance independently since the days
of the “Subaru 360” and has garnered the highest level of rating in
of the “Subaru 360” and has garnered the highest level of rating in
all safety performance tests performed by third parties in countries
all safety performance tests performed by third parties in countries
around the world.
around the world.
Synchronized with the making of cars built with a safety
Synchronized with the making of cars built with a safety
concept as reliable technologies as the fundamentals of the
concept as reliable technologies as the fundamentals of the
vehicle, we
vehicle, we
follow
follow
the “Human Centered Automobile
the “Human Centered Automobile
Manufacturing” concept so that the customers that use our
Manufacturing” concept so that the customers that use our
Activities to facilitate enjoyment and peace of mind
Platform
Driver Assist Technology
Design
SUBARU GLOBAL PLATFORM
Next Generation Subaru Design
To achieve Zero Traffic Accidents
Subaru best ever levels of overall performance evolutions to
Uncompromising pursuit of accident avoidance
Shapes that are meaningful that
facilitate Subaru’s vehicle manufacturing with enjoyment and
performance with the “EyeSight” as the base.
incorporate Subaru characteristic
peace of mind.
Realize an automated driving function that is
functionality along with a high level
centered on the human as a part of this evolution.
of dynamism and solid feel.
was focused on “significant increases of body and chassis rigidity,”
was focused on “significant increases of body and chassis rigidity,”
vehicle by 50% compared to present models.
vehicle by 50% compared to present models.
of safety performance. Among the four focus areas based on the
of safety performance. Among the four focus areas based on the
“pursuit of an even lower center of gravity,” and “evolution of the
“pursuit of an even lower center of gravity,” and “evolution of the
Through these activities, next generation Subaru vehicles
Through these activities, next generation Subaru vehicles
Subaru safety concept, the new platform brings major benefits
Subaru safety concept, the new platform brings major benefits
suspension system.”
suspension system.”
equipped with the Subaru Global Platform will provide enhanced
equipped with the Subaru Global Platform will provide enhanced
especially in “Active Safety” and “Passive Safety.”
especially in “Active Safety” and “Passive Safety.”
For example, comparing the Subaru Global Platform to current
For example, comparing the Subaru Global Platform to current
dynamic feel that will surely dominate not only Japanese vehicles
dynamic feel that will surely dominate not only Japanese vehicles
In terms of “Active Safety,” significant improvements to body
In terms of “Active Safety,” significant improvements to body
the load transmission paths, adoption of high strength material, as
the load transmission paths, adoption of high strength material, as
well as improving collision energy absorption by 40% versus
well as improving collision energy absorption by 40% versus
existing vehicles. These improvements further evolved crash
existing vehicles. These improvements further evolved crash
safety performance that had already achieved the highest level of
safety performance that had already achieved the highest level of
vehicles, improvements have been made to the front body lateral
vehicles, improvements have been made to the front body lateral
but also top grade European vehicles as well.
but also top grade European vehicles as well.
and chassis rigidity and even lower center of gravity has improved
and chassis rigidity and even lower center of gravity has improved
steering stability on Subaru cars that had already been rated
steering stability on Subaru cars that had already been rated
highly and had taken it up to the next level. In internal tests, the
highly and had taken it up to the next level. In internal tests, the
next generation Impreza danger avoidance speed has exceeded
next generation Impreza danger avoidance speed has exceeded
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
which achieves levels comparable to European sports cars.
which achieves levels comparable to European sports cars.
ratings in the world. In the future, compliance to various and
ratings in the world. In the future, compliance to various and
For Subaru that has “Human Centered Automobile Manufacturing”
For Subaru that has “Human Centered Automobile Manufacturing”
diverse forms of crashes will be required, and we believe that
diverse forms of crashes will be required, and we believe that
at its essence, the ultimate goal for automated driving is not “to
at its essence, the ultimate goal for automated driving is not “to
collision energy absorption will have to be improved further by
collision energy absorption will have to be improved further by
have the car drive itself in place of the human” but it is “to aim for
have the car drive itself in place of the human” but it is “to aim for
more than 30% at around 2025. The Subaru Global Platform is
more than 30% at around 2025. The Subaru Global Platform is
zero traffic accidents” that threaten human life and assets. Based
zero traffic accidents” that threaten human life and assets. Based
designed to have the potential to be able to comply with these
designed to have the potential to be able to comply with these
on technical concepts such as these, Subaru will evolve driver
on technical concepts such as these, Subaru will evolve driver
improvements by further increasing strength to higher levels,
improvements by further increasing strength to higher levels,
assist and automated driving toward the realization of “Zero Traffic
assist and automated driving toward the realization of “Zero Traffic
current vehicles. The suspension has also advanced significantly by
current vehicles. The suspension has also advanced significantly by
Another major objective of introducing the Subaru Global Platform is
Another major objective of introducing the Subaru Global Platform is
At the same time, in terms of “Passive Safety,” body strength
At the same time, in terms of “Passive Safety,” body strength
expanding adoption of non-ferrous materials, etc.
expanding adoption of non-ferrous materials, etc.
Accidents” by the introduction of the Subaru Global Platform and
Accidents” by the introduction of the Subaru Global Platform and
revising the suspension geometry and improving the rigidity of
revising the suspension geometry and improving the rigidity of
the further evolution and enhancement of the world’s highest level
the further evolution and enhancement of the world’s highest level
was raised by optimization of the frame structure, multiplexing of
was raised by optimization of the frame structure, multiplexing of
If the rigidity and strength of the vehicle is improved
If the rigidity and strength of the vehicle is improved
further advances to high performance and high functionality for the
further advances to high performance and high functionality for the
significantly in this way, it would normally increase weight but
significantly in this way, it would normally increase weight but
driver assist system “EyeSight.”
driver assist system “EyeSight.”
the Subaru Global Platform effectively utilizes the amount of
the Subaru Global Platform effectively utilizes the amount of
Surveys in Japan have revealed a 61% fewer accidents
Surveys in Japan have revealed a 61% fewer accidents
weight saved due to the rational design, on performance
weight saved due to the rational design, on performance
resulting in injury or death for vehicles equipped with the
resulting in injury or death for vehicles equipped with the
improvements and safety improvements, as a lightweight body
improvements and safety improvements, as a lightweight body
“EyeSight Ver. 2” compared to those without it. If the conditions
“EyeSight Ver. 2” compared to those without it. If the conditions
that is on par with conventional Subaru vehicles has been made a
that is on par with conventional Subaru vehicles has been made a
of the accidents are broken down further, car-to-car accidents
of the accidents are broken down further, car-to-car accidents
reality. Moreover, in anticipation of the evolution of vehicles up till
reality. Moreover, in anticipation of the evolution of vehicles up till
dropped 80%, broadside collisions dropped 50% to demonstrate
dropped 80%, broadside collisions dropped 50% to demonstrate
2025, starting with gasoline engine vehicles, hybrid vehicles
2025, starting with gasoline engine vehicles, hybrid vehicles
the benefits the system provides. The latest “EyeSight Ver. 3” that
the benefits the system provides. The latest “EyeSight Ver. 3” that
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
is currently launched in the market has improved performance in
is currently launched in the market has improved performance in
that can accommodate various types of power units. The Subaru
that can accommodate various types of power units. The Subaru
areas such as capabilities to detect obstacles, speed range that
areas such as capabilities to detect obstacles, speed range that
Global Platform that makes overall vehicle performance evolution
Global Platform that makes overall vehicle performance evolution
the brakes actuate, etc. thus we should be able to expect even
the brakes actuate, etc. thus we should be able to expect even
possible such as outstanding straight line stability, high level
possible such as outstanding straight line stability, high level
further reductions in accident occurrences.
further reductions in accident occurrences.
danger avoidance performance, and the world’s highest level of
danger avoidance performance, and the world’s highest level of
In terms of activities toward driver assist and automated
In terms of activities toward driver assist and automated
crash safety performance, will be an important core technology
crash safety performance, will be an important core technology
driving, automated follow-up system in congested express ways
driving, automated follow-up system in congested express ways
even in terms of realizing automated driving in the future.
even in terms of realizing automated driving in the future.
will be added in 2017. This is a function that drives the car at 0 km/h
will be added in 2017. This is a function that drives the car at 0 km/h
to 65 km/h on the same lane while recognizing the movements of
to 65 km/h on the same lane while recognizing the movements of
the vehicle driving ahead and the conditions of curves in the
the vehicle driving ahead and the conditions of curves in the
roadway with the “EyeSight” in traffic jam on expressways.
roadway with the “EyeSight” in traffic jam on expressways.
Furthermore, in 2020, we plan to add a radar and digital map to the
Furthermore, in 2020, we plan to add a radar and digital map to the
“EyeSight” that uses only stereo camera technology to realize
“EyeSight” that uses only stereo camera technology to realize
automated driving on expressway roads including lane changes.
automated driving on expressway roads including lane changes.
In this way, by practical implementation placing a priority on driver
In this way, by practical implementation placing a priority on driver
assist functions targeting situations with a high risk of becoming an
assist functions targeting situations with a high risk of becoming an
accident, such as during heavy traffic when drivers are susceptible to
accident, such as during heavy traffic when drivers are susceptible to
losing their concentration, lane changes that demand careful checks
losing their concentration, lane changes that demand careful checks
in the rearward direction, etc. through this the capability of Subaru
in the rearward direction, etc. through this the capability of Subaru
vehicles to avoid accidents will be improved exponentially. As a result
vehicles to avoid accidents will be improved exponentially. As a result
of this pursuit of safety performance, we hope to make automated
of this pursuit of safety performance, we hope to make automated
driving with distinctive Subaru value and provide “enjoyment and
driving with distinctive Subaru value and provide “enjoyment and
peace of mind” that is one step above to users.
peace of mind” that is one step above to users.
rigidity, body torsional rigidity, front suspension rigidity, and rear
rigidity, body torsional rigidity, front suspension rigidity, and rear
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
Moreover, Subaru cars have traditionally had the characteristic “low
Moreover, Subaru cars have traditionally had the characteristic “low
center of gravity design” but on the Subaru Global Platform, an
center of gravity design” but on the Subaru Global Platform, an
even lower center of gravity was achieved that is 5mm lower than
even lower center of gravity was achieved that is 5mm lower than
mounting points.
mounting points.
As a result of all of these advances, next generation vehicles
As a result of all of these advances, next generation vehicles
that adopted the Subaru Global Platform have realized astounding
that adopted the Subaru Global Platform have realized astounding
straight line stability as if gliding solidly anchored to rails. As the
straight line stability as if gliding solidly anchored to rails. As the
steering responsive is extremely high, this astounding straight line
steering responsive is extremely high, this astounding straight line
stability was made possible by the driver being able to rectify
stability was made possible by the driver being able to rectify
turbulence of the trajectory path due to factors such as slight
turbulence of the trajectory path due to factors such as slight
bumpiness to the road surface, side winds, etc.
bumpiness to the road surface, side winds, etc.
At the same time in terms of countermeasures for noise and
At the same time in terms of countermeasures for noise and
vibration, conventionally there were certain areas of the body and
vibration, conventionally there were certain areas of the body and
suspension that resonated to amplify vibrations but on the "Subaru
suspension that resonated to amplify vibrations but on the "Subaru
Global Platform", the natural frequency of the body is raised by
Global Platform", the natural frequency of the body is raised by
improving body
improving body
rigidity, preventing
rigidity, preventing
resonance with
resonance with
the
the
suspension. In addition, as concentration of localized strain was
suspension. In addition, as concentration of localized strain was
averted on the subframe mounting points, known to be the portion
averted on the subframe mounting points, known to be the portion
that is the weak point for stiffness, and the body’s overall torsional
that is the weak point for stiffness, and the body’s overall torsional
characteristics were evened out for uniformity, then by optimizing
characteristics were evened out for uniformity, then by optimizing
the body frame structure and utilizing structural adhesive, we have
the body frame structure and utilizing structural adhesive, we have
rationally improved the body rigidity without adding weight.
rationally improved the body rigidity without adding weight.
Furthermore, the amount of mass offset on the strut suspension,
Furthermore, the amount of mass offset on the strut suspension,
which is a source of vibration input, was also reduced 15% versus
which is a source of vibration input, was also reduced 15% versus
conventional levels which also contributed to reduction in noise
conventional levels which also contributed to reduction in noise
and vibration.
and vibration.
In terms of providing a smooth and comfortable drive,
In terms of providing a smooth and comfortable drive,
increasing the rigidity of the body frame brought out the intrinsic
increasing the rigidity of the body frame brought out the intrinsic
shock damping performance capabilities of the suspension that
shock damping performance capabilities of the suspension that
enabled quick convergence of vibrations generated by factors such
enabled quick convergence of vibrations generated by factors such
as bumps in the road, etc. By mounting the rear stabilizer directly
as bumps in the road, etc. By mounting the rear stabilizer directly
onto the body, the new platform reduces the body roll of the
onto the body, the new platform reduces the body roll of the
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 For example, when a driver is driving a vehicle, following the
operation of the steering wheel, the forces trying to turn the
vehicle is transmitted from the front wheels to the body and there
is normally about a one tenth of a second delay that occurs until the
The “Subaru Global Platform,” that was developed as a far-sighted
vehicle actually starts to change its orientation. Reducing this slight
technology in the year 2025, is a new platform that will be adopted
delay is what leads to smooth and stable vehicle behavior and
on all forthcoming Subaru vehicles that we independently
improvements in steering feel. Here at Subaru, we have developed
developed starting off with the next generation Impreza. A major
our own original sensors, measured suspension inputs in 1/1000
aim of introducing the Subaru Global Platform is to realize
second unit intervals and measured strain in 200 locations on the
significant evolutions in overall performance, that would have been
vehicle body to quantify the movements of each part of the vehicle.
difficult as just an extension of conventional technologies, by
Furthermore, bench testing equipment that reproduces the
executing a complete overhaul of the platform, which is the basic
movement of the suspension on actual roads was developed and
structure of an automobile, and to facilitate “enjoyment and peace
development of vehicle elements has also progressed.
of mind” which is the greatest appeal of Subaru vehicles. To
Taking this kind of fundamental research and elemental
accomplish this, the element that the development team poured all
developments into consideration, Subaru has established three
of their efforts into was simply the pursuit of “enhanced dynamic
factors to pursue “enhanced dynamic feel” which are (1) being able
feel” that resonates with human senses beyond high performance
to drive straight (straight line stability), (2) having no unpleasant
and “safety performance” at the highest levels in the world.
vibration or noise, and (3) pleasant ride comfort. In order to realize
So what is “enhanced dynamic feel?” It is the performance
these factors in the Subaru Global Platform development, the work
feel that a person driving or riding a car feels, such as operation feel
and drive feel while driving, as well as ride comfort. At Subaru, this
“enhanced dynamic feel” is captured as a combination of three
factors [1] performance feel that is felt when operating the steering
wheel and pedals, [2] performance feel that is felt audibly, [3]
performance feel that is felt from the movement of the vehicle and
as has been done in the past we have pursued a high level of
quality that delves into the realm of human sensations such as
“smoothness” or “how great it feels.” Furthermore, in the
development of the Subaru Global Platform we have attempted to
visualize “enhanced dynamic feel” that had been difficult to
capture as physical values till now.
the load transmission paths, adoption of high strength material, as
well as improving collision energy absorption by 40% versus
existing vehicles. These improvements further evolved crash
safety performance that had already achieved the highest level of
ratings in the world. In the future, compliance to various and
For Subaru that has “Human Centered Automobile Manufacturing”
diverse forms of crashes will be required, and we believe that
at its essence, the ultimate goal for automated driving is not “to
collision energy absorption will have to be improved further by
have the car drive itself in place of the human” but it is “to aim for
more than 30% at around 2025. The Subaru Global Platform is
zero traffic accidents” that threaten human life and assets. Based
designed to have the potential to be able to comply with these
on technical concepts such as these, Subaru will evolve driver
improvements by further increasing strength to higher levels,
assist and automated driving toward the realization of “Zero Traffic
expanding adoption of non-ferrous materials, etc.
Accidents” by the introduction of the Subaru Global Platform and
If the rigidity and strength of the vehicle is improved
further advances to high performance and high functionality for the
significantly in this way, it would normally increase weight but
driver assist system “EyeSight.”
the Subaru Global Platform effectively utilizes the amount of
Surveys in Japan have revealed a 61% fewer accidents
weight saved due to the rational design, on performance
resulting in injury or death for vehicles equipped with the
improvements and safety improvements, as a lightweight body
“EyeSight Ver. 2” compared to those without it. If the conditions
that is on par with conventional Subaru vehicles has been made a
of the accidents are broken down further, car-to-car accidents
reality. Moreover, in anticipation of the evolution of vehicles up till
dropped 80%, broadside collisions dropped 50% to demonstrate
2025, starting with gasoline engine vehicles, hybrid vehicles
the benefits the system provides. The latest “EyeSight Ver. 3” that
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
is currently launched in the market has improved performance in
that can accommodate various types of power units. The Subaru
areas such as capabilities to detect obstacles, speed range that
Global Platform that makes overall vehicle performance evolution
the brakes actuate, etc. thus we should be able to expect even
danger avoidance performance, and the world’s highest level of
In terms of activities toward driver assist and automated
crash safety performance, will be an important core technology
driving, automated follow-up system in congested express ways
even in terms of realizing automated driving in the future.
will be added in 2017. This is a function that drives the car at 0 km/h
to 65 km/h on the same lane while recognizing the movements of
the vehicle driving ahead and the conditions of curves in the
roadway with the “EyeSight” in traffic jam on expressways.
Furthermore, in 2020, we plan to add a radar and digital map to the
“EyeSight” that uses only stereo camera technology to realize
automated driving on expressway roads including lane changes.
In this way, by practical implementation placing a priority on driver
assist functions targeting situations with a high risk of becoming an
accident, such as during heavy traffic when drivers are susceptible to
losing their concentration, lane changes that demand careful checks
in the rearward direction, etc. through this the capability of Subaru
vehicles to avoid accidents will be improved exponentially. As a result
of this pursuit of safety performance, we hope to make automated
driving with distinctive Subaru value and provide “enjoyment and
peace of mind” that is one step above to users.
was focused on “significant increases of body and chassis rigidity,”
“pursuit of an even lower center of gravity,” and “evolution of the
suspension system.”
For example, comparing the Subaru Global Platform to current
vehicles, improvements have been made to the front body lateral
rigidity, body torsional rigidity, front suspension rigidity, and rear
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
Moreover, Subaru cars have traditionally had the characteristic “low
center of gravity design” but on the Subaru Global Platform, an
even lower center of gravity was achieved that is 5mm lower than
current vehicles. The suspension has also advanced significantly by
revising the suspension geometry and improving the rigidity of
mounting points.
As a result of all of these advances, next generation vehicles
that adopted the Subaru Global Platform have realized astounding
straight line stability as if gliding solidly anchored to rails. As the
steering responsive is extremely high, this astounding straight line
stability was made possible by the driver being able to rectify
turbulence of the trajectory path due to factors such as slight
bumpiness to the road surface, side winds, etc.
resonance with
rigidity, preventing
At the same time in terms of countermeasures for noise and
vibration, conventionally there were certain areas of the body and
suspension that resonated to amplify vibrations but on the "Subaru
Global Platform", the natural frequency of the body is raised by
improving body
the
suspension. In addition, as concentration of localized strain was
averted on the subframe mounting points, known to be the portion
that is the weak point for stiffness, and the body’s overall torsional
characteristics were evened out for uniformity, then by optimizing
the body frame structure and utilizing structural adhesive, we have
rationally improved the body rigidity without adding weight.
Furthermore, the amount of mass offset on the strut suspension,
which is a source of vibration input, was also reduced 15% versus
conventional levels which also contributed to reduction in noise
and vibration.
vehicle by 50% compared to present models.
Through these activities, next generation Subaru vehicles
equipped with the Subaru Global Platform will provide enhanced
dynamic feel that will surely dominate not only Japanese vehicles
but also top grade European vehicles as well.
Pursuing Far-sighted Safety Technology that
Anticipates Ten Years in the Future Based On Subaru’s
Unique Safety Concept.
of safety performance. Among the four focus areas based on the
Subaru safety concept, the new platform brings major benefits
especially in “Active Safety” and “Passive Safety.”
In terms of “Active Safety,” significant improvements to body
and chassis rigidity and even lower center of gravity has improved
steering stability on Subaru cars that had already been rated
highly and had taken it up to the next level. In internal tests, the
next generation Impreza danger avoidance speed has exceeded
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
which achieves levels comparable to European sports cars.
Another major objective of introducing the Subaru Global Platform is
the further evolution and enhancement of the world’s highest level
At the same time, in terms of “Passive Safety,” body strength
was raised by optimization of the frame structure, multiplexing of
Active Safety
Realized even lower center of gravity and further improved steering stability
A center of gravity 50 mm lower than other OEM models
in the same class
On the Subaru global platform, the center of gravity height is 5 mm reduced
than current levels
SUV
Passenger cars
Sport cars
)
m
m
(
i
t
h
g
e
h
y
t
i
v
a
r
g
f
o
r
e
t
n
e
C
Passive safety
Other brand average
Subaru vehicle
average
Power unit
-10mm
Current vehicles
Vehicles
in development
Minimum ground clearance (mm)
Hip
-10mm
Heel
-20mm
Hip
-10mm
Propeller shaft/
rear differential
-10mm
)
m
m
(
i
t
h
g
e
h
y
t
i
v
a
r
g
f
o
r
e
t
n
e
C
5mm reduction
possible such as outstanding straight line stability, high level
further reductions in accident occurrences.
Average of
other C segment
brands
Current
vehicles
Vehicles in
development
Major awards all over the world
Body strength improvement for passive safety
In terms of providing a smooth and comfortable drive,
increasing the rigidity of the body frame brought out the intrinsic
shock damping performance capabilities of the suspension that
enabled quick convergence of vibrations generated by factors such
as bumps in the road, etc. By mounting the rear stabilizer directly
onto the body, the new platform reduces the body roll of the
EuroNCAP
(EU)
ANCAP
(Australia)
IIHS
(USA)
USNCAP
(USA)
JNCAP
(Japan)
)
J
K
(
n
o
i
t
p
r
o
s
b
a
y
g
r
e
n
e
n
o
i
s
i
l
l
o
C
22
Body strength compared
to current vehicles
40% increase
Anticipate to cover out
to the year 2025 by
further increasing
strength, expanding
adoption of non-ferrous
materials, etc.
2015
2025
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
For example, when a driver is driving a vehicle, following the
For example, when a driver is driving a vehicle, following the
operation of the steering wheel, the forces trying to turn the
operation of the steering wheel, the forces trying to turn the
vehicle is transmitted from the front wheels to the body and there
vehicle is transmitted from the front wheels to the body and there
is normally about a one tenth of a second delay that occurs until the
is normally about a one tenth of a second delay that occurs until the
The “Subaru Global Platform,” that was developed as a far-sighted
The “Subaru Global Platform,” that was developed as a far-sighted
vehicle actually starts to change its orientation. Reducing this slight
vehicle actually starts to change its orientation. Reducing this slight
technology in the year 2025, is a new platform that will be adopted
technology in the year 2025, is a new platform that will be adopted
delay is what leads to smooth and stable vehicle behavior and
delay is what leads to smooth and stable vehicle behavior and
on all forthcoming Subaru vehicles that we independently
on all forthcoming Subaru vehicles that we independently
improvements in steering feel. Here at Subaru, we have developed
improvements in steering feel. Here at Subaru, we have developed
developed starting off with the next generation Impreza. A major
developed starting off with the next generation Impreza. A major
our own original sensors, measured suspension inputs in 1/1000
our own original sensors, measured suspension inputs in 1/1000
aim of introducing the Subaru Global Platform is to realize
aim of introducing the Subaru Global Platform is to realize
second unit intervals and measured strain in 200 locations on the
second unit intervals and measured strain in 200 locations on the
significant evolutions in overall performance, that would have been
significant evolutions in overall performance, that would have been
vehicle body to quantify the movements of each part of the vehicle.
vehicle body to quantify the movements of each part of the vehicle.
difficult as just an extension of conventional technologies, by
difficult as just an extension of conventional technologies, by
Furthermore, bench testing equipment that reproduces the
Furthermore, bench testing equipment that reproduces the
executing a complete overhaul of the platform, which is the basic
executing a complete overhaul of the platform, which is the basic
movement of the suspension on actual roads was developed and
movement of the suspension on actual roads was developed and
structure of an automobile, and to facilitate “enjoyment and peace
structure of an automobile, and to facilitate “enjoyment and peace
development of vehicle elements has also progressed.
development of vehicle elements has also progressed.
of mind” which is the greatest appeal of Subaru vehicles. To
of mind” which is the greatest appeal of Subaru vehicles. To
Taking this kind of fundamental research and elemental
Taking this kind of fundamental research and elemental
accomplish this, the element that the development team poured all
accomplish this, the element that the development team poured all
developments into consideration, Subaru has established three
developments into consideration, Subaru has established three
of their efforts into was simply the pursuit of “enhanced dynamic
of their efforts into was simply the pursuit of “enhanced dynamic
factors to pursue “enhanced dynamic feel” which are (1) being able
factors to pursue “enhanced dynamic feel” which are (1) being able
feel” that resonates with human senses beyond high performance
feel” that resonates with human senses beyond high performance
to drive straight (straight line stability), (2) having no unpleasant
to drive straight (straight line stability), (2) having no unpleasant
and “safety performance” at the highest levels in the world.
and “safety performance” at the highest levels in the world.
vibration or noise, and (3) pleasant ride comfort. In order to realize
vibration or noise, and (3) pleasant ride comfort. In order to realize
So what is “enhanced dynamic feel?” It is the performance
So what is “enhanced dynamic feel?” It is the performance
these factors in the Subaru Global Platform development, the work
these factors in the Subaru Global Platform development, the work
feel that a person driving or riding a car feels, such as operation feel
feel that a person driving or riding a car feels, such as operation feel
and drive feel while driving, as well as ride comfort. At Subaru, this
and drive feel while driving, as well as ride comfort. At Subaru, this
“enhanced dynamic feel” is captured as a combination of three
“enhanced dynamic feel” is captured as a combination of three
factors [1] performance feel that is felt when operating the steering
factors [1] performance feel that is felt when operating the steering
wheel and pedals, [2] performance feel that is felt audibly, [3]
wheel and pedals, [2] performance feel that is felt audibly, [3]
performance feel that is felt from the movement of the vehicle and
performance feel that is felt from the movement of the vehicle and
as has been done in the past we have pursued a high level of
as has been done in the past we have pursued a high level of
quality that delves into the realm of human sensations such as
quality that delves into the realm of human sensations such as
“smoothness” or “how great it feels.” Furthermore, in the
“smoothness” or “how great it feels.” Furthermore, in the
development of the Subaru Global Platform we have attempted to
development of the Subaru Global Platform we have attempted to
visualize “enhanced dynamic feel” that had been difficult to
visualize “enhanced dynamic feel” that had been difficult to
capture as physical values till now.
capture as physical values till now.
was focused on “significant increases of body and chassis rigidity,”
was focused on “significant increases of body and chassis rigidity,”
vehicle by 50% compared to present models.
vehicle by 50% compared to present models.
of safety performance. Among the four focus areas based on the
of safety performance. Among the four focus areas based on the
“pursuit of an even lower center of gravity,” and “evolution of the
“pursuit of an even lower center of gravity,” and “evolution of the
Through these activities, next generation Subaru vehicles
Through these activities, next generation Subaru vehicles
Subaru safety concept, the new platform brings major benefits
Subaru safety concept, the new platform brings major benefits
suspension system.”
suspension system.”
equipped with the Subaru Global Platform will provide enhanced
equipped with the Subaru Global Platform will provide enhanced
especially in “Active Safety” and “Passive Safety.”
especially in “Active Safety” and “Passive Safety.”
For example, comparing the Subaru Global Platform to current
For example, comparing the Subaru Global Platform to current
dynamic feel that will surely dominate not only Japanese vehicles
dynamic feel that will surely dominate not only Japanese vehicles
In terms of “Active Safety,” significant improvements to body
In terms of “Active Safety,” significant improvements to body
vehicles, improvements have been made to the front body lateral
vehicles, improvements have been made to the front body lateral
but also top grade European vehicles as well.
but also top grade European vehicles as well.
rigidity, body torsional rigidity, front suspension rigidity, and rear
rigidity, body torsional rigidity, front suspension rigidity, and rear
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
sub-frame rigidity, by 90%, 70%, 70%, and 100%, respectively.
Moreover, Subaru cars have traditionally had the characteristic “low
Moreover, Subaru cars have traditionally had the characteristic “low
center of gravity design” but on the Subaru Global Platform, an
center of gravity design” but on the Subaru Global Platform, an
even lower center of gravity was achieved that is 5mm lower than
even lower center of gravity was achieved that is 5mm lower than
Pursuing Far-sighted Safety Technology that
Anticipates Ten Years in the Future Based On Subaru’s
Unique Safety Concept.
and chassis rigidity and even lower center of gravity has improved
and chassis rigidity and even lower center of gravity has improved
steering stability on Subaru cars that had already been rated
steering stability on Subaru cars that had already been rated
highly and had taken it up to the next level. In internal tests, the
highly and had taken it up to the next level. In internal tests, the
next generation Impreza danger avoidance speed has exceeded
next generation Impreza danger avoidance speed has exceeded
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
the 84.5 km/h on the existing vehicle considerably at 92.5 km/h
which achieves levels comparable to European sports cars.
which achieves levels comparable to European sports cars.
current vehicles. The suspension has also advanced significantly by
current vehicles. The suspension has also advanced significantly by
Another major objective of introducing the Subaru Global Platform is
Another major objective of introducing the Subaru Global Platform is
At the same time, in terms of “Passive Safety,” body strength
At the same time, in terms of “Passive Safety,” body strength
revising the suspension geometry and improving the rigidity of
revising the suspension geometry and improving the rigidity of
the further evolution and enhancement of the world’s highest level
the further evolution and enhancement of the world’s highest level
was raised by optimization of the frame structure, multiplexing of
was raised by optimization of the frame structure, multiplexing of
suspension that resonated to amplify vibrations but on the "Subaru
suspension that resonated to amplify vibrations but on the "Subaru
Passenger cars
5mm reduction
mounting points.
mounting points.
As a result of all of these advances, next generation vehicles
As a result of all of these advances, next generation vehicles
that adopted the Subaru Global Platform have realized astounding
that adopted the Subaru Global Platform have realized astounding
straight line stability as if gliding solidly anchored to rails. As the
straight line stability as if gliding solidly anchored to rails. As the
steering responsive is extremely high, this astounding straight line
steering responsive is extremely high, this astounding straight line
stability was made possible by the driver being able to rectify
stability was made possible by the driver being able to rectify
turbulence of the trajectory path due to factors such as slight
turbulence of the trajectory path due to factors such as slight
bumpiness to the road surface, side winds, etc.
bumpiness to the road surface, side winds, etc.
At the same time in terms of countermeasures for noise and
At the same time in terms of countermeasures for noise and
vibration, conventionally there were certain areas of the body and
vibration, conventionally there were certain areas of the body and
Global Platform", the natural frequency of the body is raised by
Global Platform", the natural frequency of the body is raised by
improving body
improving body
rigidity, preventing
rigidity, preventing
resonance with
resonance with
the
the
suspension. In addition, as concentration of localized strain was
suspension. In addition, as concentration of localized strain was
averted on the subframe mounting points, known to be the portion
averted on the subframe mounting points, known to be the portion
that is the weak point for stiffness, and the body’s overall torsional
that is the weak point for stiffness, and the body’s overall torsional
characteristics were evened out for uniformity, then by optimizing
characteristics were evened out for uniformity, then by optimizing
the body frame structure and utilizing structural adhesive, we have
the body frame structure and utilizing structural adhesive, we have
rationally improved the body rigidity without adding weight.
rationally improved the body rigidity without adding weight.
Furthermore, the amount of mass offset on the strut suspension,
Furthermore, the amount of mass offset on the strut suspension,
which is a source of vibration input, was also reduced 15% versus
which is a source of vibration input, was also reduced 15% versus
conventional levels which also contributed to reduction in noise
conventional levels which also contributed to reduction in noise
and vibration.
and vibration.
In terms of providing a smooth and comfortable drive,
In terms of providing a smooth and comfortable drive,
increasing the rigidity of the body frame brought out the intrinsic
increasing the rigidity of the body frame brought out the intrinsic
shock damping performance capabilities of the suspension that
shock damping performance capabilities of the suspension that
enabled quick convergence of vibrations generated by factors such
enabled quick convergence of vibrations generated by factors such
as bumps in the road, etc. By mounting the rear stabilizer directly
as bumps in the road, etc. By mounting the rear stabilizer directly
onto the body, the new platform reduces the body roll of the
onto the body, the new platform reduces the body roll of the
Active Safety
in the same class
SUV
)
m
m
(
t
h
g
i
e
h
y
t
i
v
a
r
g
f
o
r
e
t
n
e
C
Sport cars
EuroNCAP
(EU)
ANCAP
(Australia)
Realized even lower center of gravity and further improved steering stability
A center of gravity 50 mm lower than other OEM models
On the Subaru global platform, the center of gravity height is 5 mm reduced
than current levels
Other brand average
Subaru vehicle
average
Power unit
-10mm
Current vehicles
Vehicles
in development
Hip
-10mm
Heel
-20mm
Hip
-10mm
Propeller shaft/
rear differential
-10mm
)
m
m
(
t
h
g
i
e
h
y
t
i
v
a
r
g
f
o
r
e
t
n
e
C
Minimum ground clearance (mm)
Passive safety
Major awards all over the world
Body strength improvement for passive safety
Average of
other C segment
Current
vehicles
Vehicles in
development
brands
IIHS
(USA)
USNCAP
(USA)
JNCAP
(Japan)
)
J
K
(
n
o
i
t
p
r
o
s
b
a
y
g
r
e
n
e
n
o
i
s
i
l
l
o
C
Anticipate to cover out
to the year 2025 by
further increasing
strength, expanding
adoption of non-ferrous
materials, etc.
Body strength compared
to current vehicles
40% increase
2015
2025
the load transmission paths, adoption of high strength material, as
the load transmission paths, adoption of high strength material, as
well as improving collision energy absorption by 40% versus
well as improving collision energy absorption by 40% versus
existing vehicles. These improvements further evolved crash
existing vehicles. These improvements further evolved crash
safety performance that had already achieved the highest level of
safety performance that had already achieved the highest level of
ratings in the world. In the future, compliance to various and
ratings in the world. In the future, compliance to various and
diverse forms of crashes will be required, and we believe that
diverse forms of crashes will be required, and we believe that
collision energy absorption will have to be improved further by
collision energy absorption will have to be improved further by
more than 30% at around 2025. The Subaru Global Platform is
more than 30% at around 2025. The Subaru Global Platform is
designed to have the potential to be able to comply with these
designed to have the potential to be able to comply with these
improvements by further increasing strength to higher levels,
improvements by further increasing strength to higher levels,
expanding adoption of non-ferrous materials, etc.
expanding adoption of non-ferrous materials, etc.
If the rigidity and strength of the vehicle is improved
If the rigidity and strength of the vehicle is improved
significantly in this way, it would normally increase weight but
significantly in this way, it would normally increase weight but
the Subaru Global Platform effectively utilizes the amount of
the Subaru Global Platform effectively utilizes the amount of
weight saved due to the rational design, on performance
weight saved due to the rational design, on performance
improvements and safety improvements, as a lightweight body
improvements and safety improvements, as a lightweight body
that is on par with conventional Subaru vehicles has been made a
that is on par with conventional Subaru vehicles has been made a
reality. Moreover, in anticipation of the evolution of vehicles up till
reality. Moreover, in anticipation of the evolution of vehicles up till
2025, starting with gasoline engine vehicles, hybrid vehicles
2025, starting with gasoline engine vehicles, hybrid vehicles
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
(HEV/PHEV) to electric vehicles (EV), it is designed as a platform
that can accommodate various types of power units. The Subaru
that can accommodate various types of power units. The Subaru
Global Platform that makes overall vehicle performance evolution
Global Platform that makes overall vehicle performance evolution
possible such as outstanding straight line stability, high level
possible such as outstanding straight line stability, high level
danger avoidance performance, and the world’s highest level of
danger avoidance performance, and the world’s highest level of
crash safety performance, will be an important core technology
crash safety performance, will be an important core technology
even in terms of realizing automated driving in the future.
even in terms of realizing automated driving in the future.
Platform that anticipates out to 2025
Pursuing Human Centered Automated Driving
Functions Toward Making “Zero Traffic Accidents”
a Reality.
For Subaru that has “Human Centered Automobile Manufacturing”
For Subaru that has “Human Centered Automobile Manufacturing”
at its essence, the ultimate goal for automated driving is not “to
at its essence, the ultimate goal for automated driving is not “to
have the car drive itself in place of the human” but it is “to aim for
have the car drive itself in place of the human” but it is “to aim for
zero traffic accidents” that threaten human life and assets. Based
zero traffic accidents” that threaten human life and assets. Based
on technical concepts such as these, Subaru will evolve driver
on technical concepts such as these, Subaru will evolve driver
assist and automated driving toward the realization of “Zero Traffic
assist and automated driving toward the realization of “Zero Traffic
Accidents” by the introduction of the Subaru Global Platform and
Accidents” by the introduction of the Subaru Global Platform and
further advances to high performance and high functionality for the
further advances to high performance and high functionality for the
driver assist system “EyeSight.”
driver assist system “EyeSight.”
Surveys in Japan have revealed a 61% fewer accidents
Surveys in Japan have revealed a 61% fewer accidents
resulting in injury or death for vehicles equipped with the
resulting in injury or death for vehicles equipped with the
“EyeSight Ver. 2” compared to those without it. If the conditions
“EyeSight Ver. 2” compared to those without it. If the conditions
of the accidents are broken down further, car-to-car accidents
of the accidents are broken down further, car-to-car accidents
dropped 80%, broadside collisions dropped 50% to demonstrate
dropped 80%, broadside collisions dropped 50% to demonstrate
the benefits the system provides. The latest “EyeSight Ver. 3” that
the benefits the system provides. The latest “EyeSight Ver. 3” that
is currently launched in the market has improved performance in
is currently launched in the market has improved performance in
areas such as capabilities to detect obstacles, speed range that
areas such as capabilities to detect obstacles, speed range that
the brakes actuate, etc. thus we should be able to expect even
the brakes actuate, etc. thus we should be able to expect even
further reductions in accident occurrences.
further reductions in accident occurrences.
In terms of activities toward driver assist and automated
In terms of activities toward driver assist and automated
driving, automated follow-up system in congested express ways
driving, automated follow-up system in congested express ways
will be added in 2017. This is a function that drives the car at 0 km/h
will be added in 2017. This is a function that drives the car at 0 km/h
to 65 km/h on the same lane while recognizing the movements of
to 65 km/h on the same lane while recognizing the movements of
the vehicle driving ahead and the conditions of curves in the
the vehicle driving ahead and the conditions of curves in the
roadway with the “EyeSight” in traffic jam on expressways.
roadway with the “EyeSight” in traffic jam on expressways.
Furthermore, in 2020, we plan to add a radar and digital map to the
Furthermore, in 2020, we plan to add a radar and digital map to the
“EyeSight” that uses only stereo camera technology to realize
“EyeSight” that uses only stereo camera technology to realize
automated driving on expressway roads including lane changes.
automated driving on expressway roads including lane changes.
In this way, by practical implementation placing a priority on driver
In this way, by practical implementation placing a priority on driver
assist functions targeting situations with a high risk of becoming an
assist functions targeting situations with a high risk of becoming an
accident, such as during heavy traffic when drivers are susceptible to
accident, such as during heavy traffic when drivers are susceptible to
losing their concentration, lane changes that demand careful checks
losing their concentration, lane changes that demand careful checks
in the rearward direction, etc. through this the capability of Subaru
in the rearward direction, etc. through this the capability of Subaru
vehicles to avoid accidents will be improved exponentially. As a result
vehicles to avoid accidents will be improved exponentially. As a result
of this pursuit of safety performance, we hope to make automated
of this pursuit of safety performance, we hope to make automated
driving with distinctive Subaru value and provide “enjoyment and
driving with distinctive Subaru value and provide “enjoyment and
peace of mind” that is one step above to users.
peace of mind” that is one step above to users.
23
Evolution of the EyeSight
2017
Automated follow-up on
congested expressways
2020
Automated driving including
lane changes on expressways
EyeSight Accident Reduction Data*1
61% reduction in accident rate
Comparison of rate of accidents
resulting in injury or death with
and without EyeSight (Ver.2)
No. per 10,000 vehicles (over 4 years)
Between people and vehicles
200
154.1
10
61%
down
60.7
52%
down
36%
down
58%
down
0
Without
EyeSight
With
EyeSight
0
Rear/
front
While
crossing road
Other
Between vehicles*2
60
51%
down
83%
down
34%
down
41%
down
48%
down
0
Rear-end
collision
Intersection
collision
Turning
left
Turning
right
Other
*1 Independent calculations from data on accidents that took place over the four years from
2011 – 2014 among vehicles sold between 2010 and 2013 in which installation of EyeSight
(Ver. 2) is possible based on Institute for Traffic Accident Research and Data Analysis
(ITARDA) data. There were 2,234 accidents.
Calculates the number of accidents resulting in injury or death per 10,000 vehicles with and
without EyeSight (over four years). Of the target vehicles, there were 246,139 with EyeSight
(Ver. 2) and 48,085 without it.
*2 Placed top in frequency
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Special Feature
Innovativeness of the Subaru Global Platform that will Serve
as the Backbone of Next Generation Automobile Manufacturing
New Subaru Design that Puts “Enjoyment and Peace of Mind”
Into the Physical Form of a Vehicle
Mamoru Ishii
General Manager, Subaru Design Department
a Subaru car in a single glance.
and is the structure of framework that determines the profile of the
The latest design philosophy that embodies this new Subaru
vehicle. The second factor is “solid mass.” This could also be
design is DYNAMIC×SOLID. The “solidness full of sense of
referred to as volume or volume feel, and develops the way the
security” and “sturdiness to protect passengers,” that had been
muscles are built to give an impression of trust and toughness that
carefully developed into designs conventionally by Subaru is
the vehicle possesses. The third factor is “surface structure.”
expressed by SOLID and throbbing Dynamic for next generation
Starting with Subaru’s unique hexagon grille through this
and active lifestyle, etc. is expressed by the keyword DYNAMIC.
three-dimensional expression, this is what gives the impression of
At Subaru, this design philosophy of DYNAMIC×SOLID is
car’s individual facial expression and character.
incorporated into specific three-dimensional forms from the
The next generation Impreza will be the first mass production
following three factors. The first and most important is the
vehicle to fully adopt this DYNAMIC×SOLID design. Please look
“stance.” This could also be called the proportions of the vehicle
forward with high expectations for future Subaru designs.
Pursuing “Lifestyle Design” to make life richer, and
“Long Life Design” that people will want to use for a
long time.
genuine beauty of the vehicle that came about naturally. Reflecting
the mentality of this kind of Subaru car making is what we believe
will lead to “Long life design”.
At Subaru, for the mid-term management vision “Prominence
2020,” six activities have been established to polish up the brand.
One of the major items of these activities is positioned in the realm
of design. In order for Subaru to be a prominent presence for
customers, we have reconfirmed goals that design should be
aiming for and developed a renewed Subaru design strategy. The
new Subaru design will aim for “lifestyle design” to make the lives
of customers richer and “long life design” that customers will want
to use for a long time.
At Subaru, cars will obviously be designed to comfortably fit
the customer’s lifestyle but on top of that, to take that next step,
and actively promote the design a new lifestyle that will make the
life of customers richer. This is “Lifestyle design.”
Of course, the car will become a partner in the rich life of the
customer, thus it must be equipped with functional performance
that can be used daily without stress but at the same time be
designed in a way that customers will feel an affinity to want to
use the car for a long time. For example, at Subaru, in order to
achieve superior visibility performance, sure, effective field of view
angle was secured but an interior design was executed that went
as far as taking into account controlling light glare and reflections in
the glass. On top of this, instead of following the latest trends
haphazardly, the priority was placed on design that pursued
24
Design Philosophy of DYNAMIC×SOLID that Expresses
“Enjoyment and Peace of Mind” from the Perspective
of Design.
In pursuing our new design direction, we have also worked to
interpret from a design perspective the value of “Enjoyment and
Peace of Mind” that Subaru offers to customers and put it into the
form of vehicles. As a result of analyzing “Enjoyment and Peace of
Mind” based on this concept, we reacknowledged three
meanings that should be expressed as a common theme
throughout the new Subaru design and decided to evolve each
area accordingly.
The first meaning is “functional value” in terms of “fine
visibility,” “comfortable interior space,” “load capacity” and “run
through capability,” that had been a priority since the founding of
Subaru. In addition to these factors, in recent years “Aerodynamic
performance,” have also become important factors. The second
meaning is “manufacturing spirit” in terms of “rational design
concepts” and a “Challenging spirit” that have been passed down
over generations since the founding of Subaru as our DNA to want
to create new value. Then the third meaning is “emotional value” in
terms of communicating the sophisticated “shape” borne out of
necessity represented by the distinct front face that is identified as
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Special Feature
Innovativeness of the Subaru Global Platform that will Serve
as the Backbone of Next Generation Automobile Manufacturing
New Subaru Design that Puts “Enjoyment and Peace of Mind”
Into the Physical Form of a Vehicle
Mamoru Ishii
General Manager, Subaru Design Department
a Subaru car in a single glance.
a Subaru car in a single glance.
The latest design philosophy that embodies this new Subaru
The latest design philosophy that embodies this new Subaru
design is DYNAMIC×SOLID. The “solidness full of sense of
design is DYNAMIC×SOLID. The “solidness full of sense of
security” and “sturdiness to protect passengers,” that had been
security” and “sturdiness to protect passengers,” that had been
carefully developed into designs conventionally by Subaru is
carefully developed into designs conventionally by Subaru is
expressed by SOLID and throbbing Dynamic for next generation
expressed by SOLID and throbbing Dynamic for next generation
and active lifestyle, etc. is expressed by the keyword DYNAMIC.
and active lifestyle, etc. is expressed by the keyword DYNAMIC.
At Subaru, this design philosophy of DYNAMIC×SOLID is
At Subaru, this design philosophy of DYNAMIC×SOLID is
incorporated into specific three-dimensional forms from the
incorporated into specific three-dimensional forms from the
following three factors. The first and most important is the
following three factors. The first and most important is the
“stance.” This could also be called the proportions of the vehicle
“stance.” This could also be called the proportions of the vehicle
and is the structure of framework that determines the profile of the
and is the structure of framework that determines the profile of the
vehicle. The second factor is “solid mass.” This could also be
vehicle. The second factor is “solid mass.” This could also be
referred to as volume or volume feel, and develops the way the
referred to as volume or volume feel, and develops the way the
muscles are built to give an impression of trust and toughness that
muscles are built to give an impression of trust and toughness that
the vehicle possesses. The third factor is “surface structure.”
the vehicle possesses. The third factor is “surface structure.”
Starting with Subaru’s unique hexagon grille through this
Starting with Subaru’s unique hexagon grille through this
three-dimensional expression, this is what gives the impression of
three-dimensional expression, this is what gives the impression of
car’s individual facial expression and character.
car’s individual facial expression and character.
The next generation Impreza will be the first mass production
The next generation Impreza will be the first mass production
vehicle to fully adopt this DYNAMIC×SOLID design. Please look
vehicle to fully adopt this DYNAMIC×SOLID design. Please look
forward with high expectations for future Subaru designs.
forward with high expectations for future Subaru designs.
Pursuing “Lifestyle Design” to make life richer, and
“Long Life Design” that people will want to use for a
genuine beauty of the vehicle that came about naturally. Reflecting
genuine beauty of the vehicle that came about naturally. Reflecting
the mentality of this kind of Subaru car making is what we believe
the mentality of this kind of Subaru car making is what we believe
long time.
will lead to “Long life design”.
will lead to “Long life design”.
At Subaru, for the mid-term management vision “Prominence
At Subaru, for the mid-term management vision “Prominence
2020,” six activities have been established to polish up the brand.
2020,” six activities have been established to polish up the brand.
One of the major items of these activities is positioned in the realm
One of the major items of these activities is positioned in the realm
of design. In order for Subaru to be a prominent presence for
of design. In order for Subaru to be a prominent presence for
customers, we have reconfirmed goals that design should be
customers, we have reconfirmed goals that design should be
aiming for and developed a renewed Subaru design strategy. The
aiming for and developed a renewed Subaru design strategy. The
new Subaru design will aim for “lifestyle design” to make the lives
new Subaru design will aim for “lifestyle design” to make the lives
of customers richer and “long life design” that customers will want
of customers richer and “long life design” that customers will want
to use for a long time.
to use for a long time.
At Subaru, cars will obviously be designed to comfortably fit
At Subaru, cars will obviously be designed to comfortably fit
the customer’s lifestyle but on top of that, to take that next step,
the customer’s lifestyle but on top of that, to take that next step,
life of customers richer. This is “Lifestyle design.”
life of customers richer. This is “Lifestyle design.”
Of course, the car will become a partner in the rich life of the
Of course, the car will become a partner in the rich life of the
customer, thus it must be equipped with functional performance
customer, thus it must be equipped with functional performance
that can be used daily without stress but at the same time be
that can be used daily without stress but at the same time be
designed in a way that customers will feel an affinity to want to
designed in a way that customers will feel an affinity to want to
use the car for a long time. For example, at Subaru, in order to
use the car for a long time. For example, at Subaru, in order to
achieve superior visibility performance, sure, effective field of view
achieve superior visibility performance, sure, effective field of view
angle was secured but an interior design was executed that went
angle was secured but an interior design was executed that went
as far as taking into account controlling light glare and reflections in
as far as taking into account controlling light glare and reflections in
the glass. On top of this, instead of following the latest trends
the glass. On top of this, instead of following the latest trends
haphazardly, the priority was placed on design that pursued
haphazardly, the priority was placed on design that pursued
Design Philosophy of DYNAMIC×SOLID that Expresses
“Enjoyment and Peace of Mind” from the Perspective
of Design.
In pursuing our new design direction, we have also worked to
In pursuing our new design direction, we have also worked to
interpret from a design perspective the value of “Enjoyment and
interpret from a design perspective the value of “Enjoyment and
Peace of Mind” that Subaru offers to customers and put it into the
Peace of Mind” that Subaru offers to customers and put it into the
form of vehicles. As a result of analyzing “Enjoyment and Peace of
form of vehicles. As a result of analyzing “Enjoyment and Peace of
Mind” based on this concept, we reacknowledged three
Mind” based on this concept, we reacknowledged three
meanings that should be expressed as a common theme
meanings that should be expressed as a common theme
throughout the new Subaru design and decided to evolve each
throughout the new Subaru design and decided to evolve each
The first meaning is “functional value” in terms of “fine
The first meaning is “functional value” in terms of “fine
visibility,” “comfortable interior space,” “load capacity” and “run
visibility,” “comfortable interior space,” “load capacity” and “run
through capability,” that had been a priority since the founding of
through capability,” that had been a priority since the founding of
Subaru. In addition to these factors, in recent years “Aerodynamic
Subaru. In addition to these factors, in recent years “Aerodynamic
performance,” have also become important factors. The second
performance,” have also become important factors. The second
meaning is “manufacturing spirit” in terms of “rational design
meaning is “manufacturing spirit” in terms of “rational design
concepts” and a “Challenging spirit” that have been passed down
concepts” and a “Challenging spirit” that have been passed down
over generations since the founding of Subaru as our DNA to want
over generations since the founding of Subaru as our DNA to want
to create new value. Then the third meaning is “emotional value” in
to create new value. Then the third meaning is “emotional value” in
terms of communicating the sophisticated “shape” borne out of
terms of communicating the sophisticated “shape” borne out of
necessity represented by the distinct front face that is identified as
necessity represented by the distinct front face that is identified as
and actively promote the design a new lifestyle that will make the
and actively promote the design a new lifestyle that will make the
area accordingly.
area accordingly.
25
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Corporate Governance
Our Basic Approach to Corporate Governance
Company Organizational Bodies
FHI works on the enhancement of corporate governance as one of
the top priorities of management in order to gain the satisfaction and
trust of all of our stakeholders by achieving sustainable growth and
improving our corporate value in the medium and long term aiming
to be “A Compelling Company with Strong Market Presence” based
on the “Customers Come First” principle under the corporate
philosophy outlined on the right.
Corporate Philosophy
1. We strive to create advanced technology on an ongoing basis and provide
consumers with distinctive products with the highest level of quality and
customer satisfaction.
2. We aim to continuously promote harmony between people, society, and the
environment while contributing to the prosperity of society.
3. We look to the future with a global perspective and aim to foster a vibrant,
progressive company.
(Established in November 1994)
FHI has adopted a Board of Corporate Auditors system, and the
Board of Directors and the Board of Corporate Auditors perform
decision making, and oversight and auditing for the execution of
important business operations. The Board of Directors
is
composed of eight directors, two of whom are highly independent
outside directors to further strengthen governance. The Board of
Corporate Auditors is composed of four corporate auditors, two of
whom are outside corporate auditors to provide objective
oversight of management.
With regard to the system for the execution of business
operations, important issues that require consultation with the
Board of Directors are thoroughly discussed at the Executive
Management Board Meeting, which deliberates on company-wide
management strategy and the execution of key business
operations. In addition to employing an executive officer system,
FHI has introduced an in-house company system for the Aerospace
System of Corporate Governance
General Meeting of Shareholders
Election and
dismissal
Election and dismissal
Election and dismissal
Board of Corporate Auditors: 4
Reporting
Corporate auditors: 2
Outside corporate
auditors: 2
Reporting
Auditing
Information
exchange with
outside officers
Board of Directors: 8
Directors: 6
Outside directors: 2
Decision making
Submission
and reporting
Collaboration
Executive Nomination Meeting
Executive Compensation Meeting
Executive Nomination Meeting and Executive Compensation Meeting composition
Representative director, director in charge of Secretarial Office, outside directors
s
r
o
t
i
d
u
A
g
n
i
t
n
u
o
c
c
A
Collaboration
Internal Audit Department
(Audit Department)
Reporting
Reporting
President
Executive Management
Board Meeting
CSR Committee
Reporting
Reporting
Auditing
Instructions and oversight
Shared Corporate Operations
Departments at HQ
Subaru Automobiles Division
Executive Meeting
Aerospace Company
Executive Meeting
Industrial Products Company
Executive Meeting
Group companies
Election and dismissal
Submission and reporting of
important matters
Policy instructions
Approval of plans, etc.
Plan proposal reports, etc.
i
s
t
n
e
d
s
e
r
P
e
c
V
e
t
a
r
o
p
r
o
C
i
Auditing
CSR Committee
Quality Improvement Committee
Central Safety and Health Committee
Environmental Committee
Compliance Committee
Social Contribution Committee
Corporate Governance Planning Committee
etc.
26
d
n
a
g
n
i
k
a
m
n
o
i
s
i
c
e
D
s
n
o
i
t
c
n
u
f
t
h
g
i
s
r
e
v
o
n
o
i
t
c
n
u
f
n
o
i
t
u
c
e
x
e
s
n
o
i
t
a
r
e
p
o
s
s
e
n
i
s
u
B
and Industrial Products business divisions with the Automotive
Business at its core with the aim of clarifying responsibility and
speeding up execution of business operations.
Development of Internal Control System
FHI resolved its basic policy on the development of a system to
ensure that the execution of the duties of the directors complies
with laws and regulations and the Articles of Incorporation as well
as the other systems stipulated by ordinance of Japan’s Ministry of
Justice as necessary to ensure the proper operation of a stock
company at a meeting of the Board of Directors in May 2006.
Status of Development of Risk Management System
At FHI, the Corporate Planning Department, which plays a central role
in the common functions of each business, and other company-wide
shared corporate operations departments maintain close links with
each department and company to enhance risk management.
In addition, the Audit Department performs planned audits of
each department and Group company.
important compliance
FHI has also created and operates a system and organization to
ensure compliance, which is the foundation of risk management, in
order to assist with the development of the internal control system.
First, we have established the Compliance Committee which
deliberates, discusses, determines, exchanges information, and
liaises on
the
implementation of company-wide compliance. In addition, we
have assigned a compliance officer and compliance staff for each
department and company to organize a system that meticulously
implements compliance at each workplace. We also systematically
provide education and training for officers and employees on a
routine basis as well as raising awareness about compliance
through such means as in-house publications as necessary.
to promote
issues
Furthermore, in order to promote the implementation of
compliance in the FHI Group, we conduct education and training
and provide information through in-house publications for Group
companies in addition to raising the effectiveness of these
activities through the participation of Group companies in the FHI
internal reporting system (Compliance Hotline.)
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Our Basic Approach to Corporate Governance
Company Organizational Bodies
Status of Internal Audits and Auditing by Corporate Auditors
Executive Compensation
and Industrial Products business divisions with the Automotive
Business at its core with the aim of clarifying responsibility and
Corporate Governance
FHI works on the enhancement of corporate governance as one of
FHI has adopted a Board of Corporate Auditors system, and the
speeding up execution of business operations.
the top priorities of management in order to gain the satisfaction and
Board of Directors and the Board of Corporate Auditors perform
trust of all of our stakeholders by achieving sustainable growth and
decision making, and oversight and auditing for the execution of
improving our corporate value in the medium and long term aiming
important business operations. The Board of Directors
is
Development of Internal Control System
to be “A Compelling Company with Strong Market Presence” based
composed of eight directors, two of whom are highly independent
FHI resolved its basic policy on the development of a system to
on the “Customers Come First” principle under the corporate
outside directors to further strengthen governance. The Board of
ensure that the execution of the duties of the directors complies
philosophy outlined on the right.
Corporate Auditors is composed of four corporate auditors, two of
with laws and regulations and the Articles of Incorporation as well
Corporate Philosophy
1. We strive to create advanced technology on an ongoing basis and provide
consumers with distinctive products with the highest level of quality and
customer satisfaction.
2. We aim to continuously promote harmony between people, society, and the
environment while contributing to the prosperity of society.
progressive company.
whom are outside corporate auditors to provide objective
as the other systems stipulated by ordinance of Japan’s Ministry of
oversight of management.
Justice as necessary to ensure the proper operation of a stock
With regard to the system for the execution of business
company at a meeting of the Board of Directors in May 2006.
operations, important issues that require consultation with the
Board of Directors are thoroughly discussed at the Executive
Management Board Meeting, which deliberates on company-wide
Status of Development of Risk Management System
3. We look to the future with a global perspective and aim to foster a vibrant,
management strategy and the execution of key business
At FHI, the Corporate Planning Department, which plays a central role
(Established in November 1994)
operations. In addition to employing an executive officer system,
in the common functions of each business, and other company-wide
FHI has introduced an in-house company system for the Aerospace
shared corporate operations departments maintain close links with
System of Corporate Governance
General Meeting of Shareholders
Election and
dismissal
Election and dismissal
Election and dismissal
Board of Corporate Auditors: 4
Board of Directors: 8
Reporting
Corporate auditors: 2
Directors: 6
Outside corporate
auditors: 2
Outside directors: 2
Reporting
Decision making
Submission
and reporting
Auditing
Information
exchange with
outside officers
Collaboration
Internal Audit Department
(Audit Department)
Collaboration
Reporting
Reporting
President
Executive Management
Board Meeting
Auditing
Instructions and oversight
CSR Committee
Reporting
Reporting
Election and dismissal
s
r
o
t
i
d
u
A
g
n
i
t
n
u
o
c
c
A
Shared Corporate Operations
Departments at HQ
Subaru Automobiles Division
Executive Meeting
Submission and reporting of
important matters
Auditing
Aerospace Company
Executive Meeting
Industrial Products Company
Executive Meeting
Group companies
Policy instructions
Approval of plans, etc.
Plan proposal reports, etc.
s
t
n
e
d
i
s
e
r
P
e
c
i
V
e
t
a
r
o
p
r
o
C
Executive Nomination Meeting
Executive Compensation Meeting
Executive Nomination Meeting and Executive Compensation Meeting composition
Representative director, director in charge of Secretarial Office, outside directors
CSR Committee
Quality Improvement Committee
Central Safety and Health Committee
Environmental Committee
Compliance Committee
Social Contribution Committee
each department and company to enhance risk management.
In addition, the Audit Department performs planned audits of
each department and Group company.
FHI has also created and operates a system and organization to
ensure compliance, which is the foundation of risk management, in
order to assist with the development of the internal control system.
First, we have established the Compliance Committee which
deliberates, discusses, determines, exchanges information, and
liaises on
important compliance
issues
to promote
the
implementation of company-wide compliance. In addition, we
have assigned a compliance officer and compliance staff for each
department and company to organize a system that meticulously
implements compliance at each workplace. We also systematically
provide education and training for officers and employees on a
routine basis as well as raising awareness about compliance
through such means as in-house publications as necessary.
Furthermore, in order to promote the implementation of
compliance in the FHI Group, we conduct education and training
and provide information through in-house publications for Group
companies in addition to raising the effectiveness of these
d
n
a
g
n
i
k
a
m
n
o
i
s
i
c
e
D
s
n
o
i
t
c
n
u
f
t
h
g
i
s
r
e
v
o
n
o
i
t
c
n
u
f
n
o
i
t
u
c
e
x
e
s
n
o
i
t
a
r
e
p
o
s
s
e
n
i
s
u
B
Corporate Governance Planning Committee
activities through the participation of Group companies in the FHI
etc.
internal reporting system (Compliance Hotline.)
FHI’s standing corporate auditors (including the standing outside
corporate auditors), attend meetings of the Board of Directors and
other important meetings, visit work sites, investigate subsidiaries,
hear opinions from the internal audit department, and audit the
execution of duties by the directors and others based on the audit
policy and audit plan established by the Board of Corporate
Auditors. The non-standing outside corporate auditors attend
meetings of the Board of Directors and other important meetings,
hear opinions from the internal audit department and the standing
corporate auditors, and audit the execution of duties by the
directors and others based on the audit policy and audit plan
established by the Board of Corporate Auditors.
FHI has established the Audit Department as an internal auditing
organization to implement planned audits of the execution of business
operations in each in-house department as well as Group companies
inside and outside Japan. At the beginning of the fiscal year, the
department coordinates its internal audit plan for the fiscal year with
the Board of Corporate Auditors’ policy in advance. The Audit
Department reports the results of all internal audits to the corporate
auditors and reports on the status of internal audit activities and
exchanges opinions with them on a monthly basis to achieve
collaboration. The Audit Department also endeavors to strengthen the
auditing function in conjunction with audits by the Accounting Auditor.
By a resolution passed at the June 2016 General Meeting of
Shareholders, the total amount of annual compensation for directors
was set within 1.2 billion yen (including 200 million yen for outside
directors), while the total amount for corporate auditors was set
within 100 million yen by a resolution passed at the June 2006
General Meeting of Shareholders. Furthermore, by decision of the
Board of Directors, the basic compensation for directors is to include
a fixed amount (determined based on the director’s rank, with
additional considerations including the business environment, etc.)
and a performance-based amount (determined based on the fiscal
year’s consolidated ordinary profit, with additional considerations
including contribution to personnel development, the business
environment, etc.). Compensation amounts for the fiscal year under
review are shown below. Outside directors do not receive
performance-based compensation.
Classification
Number
Directors
(excluding outside directors)
Corporate auditors (excluding
outside corporate auditors)
Outside executive officers
7
3
5
Total compensation (millions of yen)
Basic compensation
Fixed amount
Performance-
based amount
234
282
516
27
62
−
−
27
62
Evaluation of Internal Control System for Financial Reporting
Total
15
322
282
604
An evaluation of the internal control system related to financial
reporting in connection with the internal control reporting system
based on Japan’s Financial Instruments and Exchange Act is
conducted using the final date of the fiscal year of the consolidated
financial statements as the reference date. The evaluation conforms
to the standards for evaluation of internal control related to financial
reporting that are generally accepted to be fair and reasonable.
The President & Chief Executive Officer (CEO) and the Chief
Financial Officer (CFO) evaluated the status of the development of
the internal control system related to financial reporting as of
March 31, 2016 and affirmed that it has been established properly
and functions effectively and issued an internal control report
audited by the Accounting Auditors to that effect.
*The above table includes one director and two auditors who resigned before the last day of the fiscal year
under review. At the end of the fiscal year under review, there were 8 directors (including 2 outside
directors) and 4 auditors (including 3 outside auditors).
Complying with the Corporate Governance Code
FHI’s policies call for compliance with the provisions of the Tokyo
Stock Exchange’s Corporate Governance Code. Cognizant of these
provisions, FHI formulated Corporate Governance Guidelines on
November 5, 2015. These Guidelines, disclosed on our website, are
intended to clarify our fundamental approach to corporate
governance, in addition to our framework and management policies.
FHI’s corporate governance pages:
https://fhi.co.jp/english/csr/mecenat/governance.html
https://fhi.co.jp/english/envi/csr/csr/governance/governance.html
27
Analysis and Evaluation of the
Board of Directors’ Effectiveness
Following the Corporate Governance Guidelines, we implemented
analysis and evaluation of our Board of Directors’ effectiveness in
FY 2016.
Analysis and Evaluation Method
• Implementation period: March 2016
• Respondents: Directors and corporate auditors
(12 in total, including outside directors)
• Overview: We carried out self-evaluations using a questionnaire that
utilized expertise from a third-party organization.
An overview of the analysis results is as follows.
- The Board of Directors has an appropriate size and sufficient
diversity for debate. The number, content, and amount of
deliberation on proposals brought forth based on the Board of
Directors’ Proposal Criteria are appropriate and the Board’s
debate is open and unencumbered.
- Board of Directors members understand the specialized
expertise of each member, respect fellow members, and strive to
understand, rather than exclude, opinions and values that do not
agree with their own.
- The support framework for outside executive officers as well as
external communication may need further improvement.
From the above, the effectiveness of FHI’s Board of Directors was
evaluated positively for FY 2016. In terms of both its decision-making
and oversight of business execution, the Board as a whole fulfills the
roles and responsibilities set out in the Corporate Governance Code.
On the other hand, there were also constructive opinions
expressing expectations for enhanced provision of information and
explanations from the Company to outside executive officers, in
addition to improved IR activity reports and more active strategic
debate. Consequently, we have decided to digest the results of this
survey and strive to continually improve corporate value, while
boosting our support of outside executive officers to a new level. This
will include more promptly distributing material used for proposals
taken up by the Board of Directors, enhancing pre-briefings for
outside executive officers, working to share information and provide
feedback on IR activities to a greater extent than we have to date,
and increasing opportunities for Board members (including outside
executive officers) to exchange opinions and information on FHI’s
business strategies and management challenges.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Board Directors / Executive Officers
28
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Board Directors / Executive Officers
Directors of the Board
Yasuyuki Yoshinaga
1
Representative Director of the Board
President & CEO
April 1977 Joined the Company
April 2005 Corporate Vice President, Senior General Manager of Strategy Development Division,
and General Manager of Corporate Planning Department
June 2006 Corporate Vice President and Chief General Manager of Strategy Development Division
April 2007 Corporate Vice President, Chief General Manager of Subaru Japan Sales & Marketing
Division, and General Manager of Sales Promotion Department
June 2007 Corporate Senior Vice President and Chief General Manager of Subaru Japan Sales &
Marketing Division
June 2009 Director of the Board and Corporate Executive Vice President
June 2011 Representative Director of the Board, President and CEO
2
Jun Kondo
Representative Director of the Board
Deputy President
April 1976 Joined the Company
June 2003 Corporate Vice President, Chief General Manager of Subaru Manufacturing Division,
and Chief General Manager of Gunma Plant
May 2004 Corporate Vice President, Chief General Manager of Subaru Cost Planning &
Management Division, and General Manager of Cost Planning Department
June 2004 Corporate Senior Vice President and Chief General Manager of Subaru Cost Planning &
Management Division
June 2006 Corporate Senior Vice President, Chief General Manager of Subaru Cost Planning &
Management Division, and Senior General Manager of Subaru Purchasing Division
April 2007 Corporate Senior Vice President, Chief General Manager of Strategy Development
Division, and Chief General Manager of Subaru Cost Planning & Management Division
June 2008 Director of the Board and Corporate Executive Vice President
June 2011 Representative Director of the Board and Deputy President
3
Naoto Muto
Director of the Board
Corporate Executive Vice President
April 1977 Joined the Company
April 2005 Corporate Vice President, Senior General Manager of Subaru Product & Portfolio Planning
Division, and General Manager of Subaru Product & Portfolio Planning Division
June 2006 Corporate Vice President and Chief General Manager of Subaru Product & Portfolio
Planning Division
June 2007 Corporate Senior Vice President and Chief General Manager of Subaru Product &
Portfolio Planning Division
April 2009 Corporate Senior Vice President and Chief General Manager of Subaru Purchasing Division
June 2010 Corporate Executive Vice President and Chief General Manager of Subaru
Purchasing Division
June 2011 Director of the Board and Corporate Executive Vice President
4
Mitsuru Takahashi
Director of the Board
Corporate Executive Vice President
April 1978 Joined the Company
June 2006 Corporate Vice President and General Manager of Finance & Accounting Department
April 2009 Corporate Senior Vice President, CFO, and General Manager of Finance & Accounting
Department
April 2010 Corporate Senior Vice President, CFO, General Manager of Finance & Accounting
Department, and President of Eco Technologies Company
June 2010 Corporate Executive Vice President, CFO, General Manager of Finance & Accounting
Department, and. President of Eco Technologies Company
April 2011 Corporate Executive Vice President, CFO, and President of Eco Technologies Company
June 2012 Director of the Board, Corporate Executive Vice President, CFO, and President
Executive Officers
Outside Executive Officers
The Company has appointed Yoshinori
Komamura and Shigehiro Aoyama to the
position of outside director. Possessing
considerable experience as executives and
a high degree of expertise in the area of
CSR, we are confident that Mr. Komamura
and Mr. Aoyama will offer sound advice to
the Board of Directors and other bodies
and ensure the independent monitoring of
the Company’s management.
Outside corporate auditors are deemed
to have sufficient ability to appropriately
carry out their professional duties. Shinichi
Mita possesses experience and knowledge
related to management from being an
executive in the manufacturing industry. In
particular, he has broad knowledge of
corporate accounting and finance. Yasuyuki
Abe possesses experience and knowledge
related to management from being an
executive of a general trading company and
has a wealth of experience and broad
knowledge as a corporate manager.
FHI appoints outside directors and
outside corporate auditors based on
criteria for the independence of its
outside executive officers.
5
Takeshi Tachimori
Director of the Board
Corporate Executive Vice President
April 1977 Joined the Company
June 2006 Corporate Vice President and Senior General Manager of Subaru Product & Portfolio
Planning Division
April 2009 Corporate Vice President, Chief General Manager of Subaru Product & Portfolio
Planning Division, and President of Subaru Tecnica International Inc.
April 2010 Corporate Senior Vice President and Chief General Manager of Subaru Product &
Portfolio Planning Division
April 2011 Corporate Senior Vice President and Chairman, President & CEO of Subaru of America, Inc.
June 2011 Corporate Senior Vice President; Chairman, President & CEO of Subaru of America,
Inc.; and Chief General Manager of Subaru Overseas Sales & Marketing Division 1
April 2013 Corporate Executive Vice President, Chairman & CEO of Subaru of America, Inc., and
Chief General Manager of Subaru Overseas Sales & Marketing Division 1
June 2013 Director of the Board and Corporate Executive Vice President
6
Masahiro Kasai
Director of the Board
Corporate Executive Vice President
April 1978 Joined the Company
June 2007 Corporate Vice President and President & CEO of Subaru of Indiana Automotive, Inc.
April 2009 Corporate Vice President, Chief General Manager of Subaru Manufacturing Division,
and Chief General Manager of Gunma Plant
April 2010 Corporate Senior Vice President, Chief General Manager of Subaru Manufacturing
Division, and Chief General Manager of Gunma Plant
April 2014 Corporate Executive Vice President and Chief General Manager of Subaru
Purchasing Division
June 2015 Director of the Board and Corporate Executive Vice President
Yoshinori Komamura
Outside Director
June 2015 Outside Director
7
Shigehiro Aoyama
Outside Director
June 2016 Outside Director
8
7
5
3
1
6
2
8
4
29
Corporate Executive Vice President
Hisashi Nagano
Nobuhiko Murakami
Tomomi Nakamura
Kazuo Hosoya
Masaki Okawara
Corporate Senior Vice President
Yasuo Kosakai
Yasunobu Nogai
Satoshi Maeda
Toshiaki Okada
Tetsuo Onuki
Yoichi Katou
Katsuyuki Mizuma
Corporate Vice President
Masami Iida
Hiromi Tsutsumi
Shoichiro Tozuka
Toshiaki Tamegai
Hiroki Kurihara
Masayuki Uchida
Takuji Dai
Fumiaki Hayata
Atsushi Osaki
Tatsuro Kobayashi
Auditors
Standing Corporate Auditor
Akira Mabuchi
Shuzo Haimoto
Corporate Auditor
Shinichi Mita
Yasuyuki Abe
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Consolidated Ten-Year Financial Summary
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES Years ended March 31
(Millions of yen)
(Thousands of U.S. dollars1)
Consolidated Automobile Sales by Region (Number of units)
Consolidated Automobile Sales (Number of units)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2016
For the year:
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Income (loss) before income taxes and minority interests
Net income (loss) attributable to owners of parent
Comprehensive income
At year-end:
Net assets
Shareholders’ equity
Total assets
Ratio of shareholders’ equity to total assets (%)
Per share: (in yen and U.S. dollars)
Net income (loss):
Basic
Diluted
Net assets
Other information:
Depreciation/amortization
Capital expenditures (addition to fixed assets)
Research and development expenses
Number of shares issued (thousands of shares)2
Number of shareholders2
Number of employees2
Parent only
Consolidated
¥
1,494,817
1,142,674
352,143
304,237
47,906
45,589
31,899
—
¥
1,572,346
1,217,662
354,684
309,004
45,680
31,906
18,481
—
¥
1,445,790
1,164,564
281,226
287,029
(5,803)
(21,517)
(69,933)
—
¥
1,428,690
1,152,763
275,927
248,577
27,350
(443)
(16,450)
(13,416)
¥
1,580,563
1,241,427
339,136
255,001
84,135
63,214
50,326
34,900
¥
1,517,105
1,222,419
294,686
250,727
43,959
52,879
38,453
44,474
¥
1,912,968
1,501,809
411,159
290,748
120,411
93,082
119,588
152,009
¥
2,408,129
1,728,271
679,858
353,369
326,489
328,865
206,616
210,757
¥
2,877,913
2,017,490
860,423
437,378
423,045
392,206
261,873
309,271
¥
3,232,258
2,187,136
1,045,122
479,533
565,589
619,003
436,654
405,703
¥
495,703
494,004
1,316,041
37.5%
¥
494,423
493,397
1,296,388
38.1%
¥
394,719
393,946
1,165,431
33.8%
¥
381,893
380,587
1,231,367
30.9%
¥
413,963
412,661
1,188,324
34.7%
¥
451,607
450,302
1,352,532
33.3%
¥
596,813
595,365
1,577,454
37.7%
¥
770,071
765,544
1,888,363
40.5%
¥
1,030,719
1,022,417
2,199,714
46.5%
¥
1,349,411
1,343,732
2,592,410
51.8%
¥
¥
44.46
44.44
687.81
81,454
126,329
50,709
782,865
42,920
11,752
25,598
¥
¥
25.73
25.73
687.02
87,164
118,869
52,020
782,865
44,484
11,909
26,404
¥
¥
(91.97)
—
505.59
74,036
95,153
42,831
782,865
40,839
12,137
27,659
¥
¥
(21.11)
—
488.58
65,785
89,077
37,175
782,865
39,223
12,483
27,586
¥
¥
64.56
—
528.88
56,062
67,378
42,907
782,865
34,240
12,429
27,296
¥
¥
49.27
—
576.97
58,611
67,035
48,115
782,865
33,139
12,359
27,123
¥
¥
153.23
—
762.87
61,544
94,986
49,141
782,865
28,890
12,717
27,509
¥
¥
264.76
—
980.98
61,486
98,537
60,092
782,865
51,386
13,034
28,545
¥
¥
335.57
—
1,310.15
71,821
135,346
83,535
782,865
70,942
13,883
29,774
¥
¥
559.54
—
1,721.90
72,938
168,338
102,373
782,865
79,594
14,234
31,151
$
28,682,740
19,408,430
9,274,310
4,255,329
5,018,981
5,492,972
3,874,825
3,600,169
$11,974,541
11,924,146
23,004,792
$
$
4.97
—
15.28
647,245
1,493,815
908,448
United States
Canada
Russia
Europe
Australia
Japan
China
1,000,000
Others
957,865
910,695
825,098
724,466
639,862
0
2012
2013
2014
2015
2016
Overseas units by region:
Consolidated Automobile Sales by Model (Number of units)
Impreza
Tribeca
Others
Forester
Exiga
Minicars
Levorg
SUBARU BRZ
957,865
910,695
Overseas total
Overseas units by model:
825,098
724,466
639,862
Domestic units:
Legacy
Impreza
Forester
Levorg
WRX
Exiga
OEM
Others
SUBARU BRZ
Passenger cars
Minicars
Domestic total
U.S.
Canada
Russia
Europe
Australia
China
Others
Legacy
Impreza
Forester
Levorg
WRX
Tribeca
OEM
Others
SUBARU BRZ
Overseas total
Grand total
2012
22,812
29,122
13,803
0
0
8,020
249
5,844
303
80,153
92,189
172,342
280,356
28,239
15,860
39,075
36,928
48,323
18,739
467,520
210,194
90,149
157,833
0
0
5,702
38
3,372
232
467,520
639,862
2013
24,207
53,250
18,044
0
0
7,392
6,711
2,778
368
112,750
50,372
163,122
357,569
32,644
14,719
46,382
38,120
50,185
21,725
561,344
207,460
190,864
147,679
0
0
4,243
10,100
591
407
561,344
724,466
2014
18,961
61,071
36,572
0
0
3,853
3,380
1,857
453
126,147
55,454
181,601
441,799
36,013
15,314
31,756
39,515
44,807
34,293
643,497
182,712
210,828
231,173
0
0
2,561
15,822
256
145
643,497
825,098
2015
13,845
39,462
21,103
40,559
7,514
1,937
1,890
1,127
439
127,876
34,876
162,752
527,630
42,439
11,559
35,730
38,889
53,821
37,875
747,943
235,791
196,403
269,649
0
37,982
64
7,914
135
5
747,943
910,695
2016
11,358
39,794
22,044
23,555
6,956
4,498
1,995
884
502
111,586
33,702
145,288
582,674
47,579
5,723
41,778
44,611
44,388
45,824
812,577
286,979
217,272
250,072
7,713
43,120
34
7,387
0
0
812,577
957,865
800,000
600,000
400,000
200,000
Legacy
WRX
OEM
1,000,000
800,000
600,000
400,000
200,000
1. U.S. dollar figures have been translated from yen, for convenience only, at the rate of ¥112.69 to US$1.00, the approximate rate of exchange at March 31, 2016.
2. As of March 31
30
0
2012
2013
2014
2015
2016
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Five-Year Automobile Sales Years ended March 31
(Millions of yen)
(Thousands of U.S. dollars1)
Consolidated Automobile Sales by Region (Number of units)
Consolidated Automobile Sales (Number of units)
Japan
China
United States
Others
1,000,000
Canada
Russia
Europe
Australia
957,865
910,695
825,098
724,466
639,862
800,000
600,000
400,000
200,000
0
2012
2013
2014
2015
2016
Consolidated Automobile Sales by Model (Number of units)
Impreza
Tribeca
Others
Forester
Exiga
Minicars
Levorg
SUBARU BRZ
957,865
910,695
825,098
724,466
639,862
Legacy
WRX
OEM
1,000,000
800,000
600,000
400,000
200,000
1. U.S. dollar figures have been translated from yen, for convenience only, at the rate of ¥112.69 to US$1.00, the approximate rate of exchange at March 31, 2016.
0
2012
2013
2014
2015
2016
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2016
For the year:
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Income (loss) before income taxes and minority interests
Net income (loss) attributable to owners of parent
Comprehensive income
¥
1,494,817
¥
1,572,346
¥
1,445,790
¥
1,428,690
¥
1,580,563
¥
1,517,105
¥
1,912,968
¥
2,408,129
¥
2,877,913
¥
3,232,258
$
28,682,740
1,142,674
1,217,662
1,164,564
1,152,763
1,241,427
1,222,419
1,501,809
1,728,271
2,017,490
352,143
304,237
47,906
45,589
31,899
—
354,684
309,004
45,680
31,906
18,481
—
281,226
287,029
(5,803)
(21,517)
(69,933)
—
275,927
248,577
27,350
(443)
(16,450)
(13,416)
339,136
255,001
84,135
63,214
50,326
34,900
294,686
250,727
43,959
52,879
38,453
44,474
411,159
290,748
120,411
93,082
119,588
152,009
679,858
353,369
326,489
328,865
206,616
210,757
860,423
437,378
423,045
392,206
261,873
309,271
2,187,136
1,045,122
479,533
565,589
619,003
436,654
405,703
19,408,430
9,274,310
4,255,329
5,018,981
5,492,972
3,874,825
3,600,169
At year-end:
Net assets
Shareholders’ equity
Total assets
¥
495,703
¥
494,423
¥
394,719
¥
381,893
¥
413,963
¥
451,607
¥
596,813
¥
770,071
¥
1,030,719
¥
1,349,411
$11,974,541
Ratio of shareholders’ equity to total assets (%)
37.5%
38.1%
33.8%
30.9%
34.7%
33.3%
37.7%
40.5%
494,004
493,397
393,946
380,587
412,661
450,302
595,365
765,544
1,316,041
1,296,388
1,165,431
1,231,367
1,188,324
1,352,532
1,577,454
1,888,363
1,022,417
2,199,714
46.5%
1,343,732
2,592,410
51.8%
11,924,146
23,004,792
Per share: (in yen and U.S. dollars)
Net income (loss):
Basic
Diluted
Net assets
Other information:
Depreciation/amortization
Capital expenditures (addition to fixed assets)
Research and development expenses
Number of shares issued (thousands of shares)2
Number of shareholders2
Number of employees2
Parent only
Consolidated
2. As of March 31
¥
¥
¥
(91.97)
¥
(21.11)
¥
64.56
¥
49.27
¥
153.23
¥
264.76
¥
335.57
¥
559.54
$
—
505.59
—
488.58
—
528.88
—
576.97
—
762.87
—
—
—
980.98
1,310.15
1,721.90
44.46
44.44
687.81
25.73
25.73
687.02
¥
81,454
¥
87,164
¥
¥
¥
¥
¥
¥
¥
71,821
¥
72,938
$
647,245
126,329
50,709
782,865
42,920
11,752
25,598
118,869
52,020
782,865
44,484
11,909
26,404
74,036
95,153
42,831
782,865
40,839
12,137
27,659
65,785
89,077
37,175
782,865
39,223
12,483
27,586
56,062
67,378
42,907
782,865
34,240
12,429
27,296
58,611
67,035
48,115
782,865
33,139
12,359
27,123
61,544
94,986
49,141
782,865
28,890
12,717
27,509
61,486
98,537
60,092
782,865
51,386
13,034
28,545
135,346
83,535
782,865
70,942
13,883
29,774
168,338
102,373
782,865
79,594
14,234
31,151
4.97
—
15.28
1,493,815
908,448
Domestic units:
Legacy
Impreza
Forester
Levorg
WRX
Exiga
SUBARU BRZ
OEM
Others
Passenger cars
Minicars
Domestic total
Overseas units by region:
U.S.
Canada
Russia
Europe
Australia
China
Others
Overseas total
Overseas units by model:
Legacy
Impreza
Forester
Levorg
WRX
Tribeca
SUBARU BRZ
OEM
Others
Overseas total
Grand total
31
2012
22,812
29,122
13,803
0
0
8,020
249
5,844
303
80,153
92,189
172,342
280,356
28,239
15,860
39,075
36,928
48,323
18,739
467,520
210,194
90,149
157,833
0
0
5,702
38
3,372
232
467,520
639,862
2013
24,207
53,250
18,044
0
0
7,392
6,711
2,778
368
112,750
50,372
163,122
357,569
32,644
14,719
46,382
38,120
50,185
21,725
561,344
207,460
190,864
147,679
0
0
4,243
10,100
591
407
561,344
724,466
2014
18,961
61,071
36,572
0
0
3,853
3,380
1,857
453
126,147
55,454
181,601
441,799
36,013
15,314
31,756
39,515
44,807
34,293
643,497
182,712
210,828
231,173
0
0
2,561
15,822
256
145
643,497
825,098
2015
13,845
39,462
21,103
40,559
7,514
1,937
1,890
1,127
439
127,876
34,876
162,752
527,630
42,439
11,559
35,730
38,889
53,821
37,875
747,943
235,791
196,403
269,649
0
37,982
64
7,914
135
5
747,943
910,695
2016
11,358
39,794
22,044
23,555
6,956
4,498
1,995
884
502
111,586
33,702
145,288
582,674
47,579
5,723
41,778
44,611
44,388
45,824
812,577
286,979
217,272
250,072
7,713
43,120
34
7,387
0
0
812,577
957,865
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Five-Year Automobile Sales Years ended March 31
Non-consolidated Automobile Sales (Number of units)
Non-consolidated Domestic Automobile Sales by Model (Number of units)
Years ended March 31
Domestic units:
Legacy
Impreza
Forester
Levorg
WRX
Exiga
SUBARU BRZ
OEM
Passenger cars
Minicars
Domestic total
Export units:
Legacy
Impreza
Forester
Levorg
WRX
Tribeca
Exiga
SUBARU BRZ
OEM
Export total
U.S. retail sales1
Legacy
Impreza
Forester
WRX
Tribeca
SUBARU BRZ
U.S. total
CKD overseas
(SIA portion)
SIA production units
Legacy
Tribeca
2012
23,968
30,566
13,990
0
0
8,477
585
5,993
83,579
96,457
180,036
48,304
100,350
162,199
0
0
331
232
211
3,372
314,999
146,806
41,196
76,196
0
2,791
0
266,989
175,256
175,256
164,968
5,661
2013
25,424
54,306
18,951
0
0
7,845
6,850
2,953
116,329
50,381
166,710
30,559
198,232
142,745
0
0
222
407
11,542
316
384,023
164,680
89,195
76,347
0
2,075
4,144
336,441
185,757
183,729
177,471
3,713
2014
19,272
62,519
37,124
0
0
3,869
3,334
1,944
128,062
57,779
185,841
22,817
206,022
247,362
0
7,644
0
145
15,118
86
499,194
160,340
130,567
123,591
0
1,598
8,587
424,683
165,554
159,266
161,204
2,307
1. U.S. Retail Sales are the aggregate figures for the calendar year from January through December.
2015
14,734
40,277
21,569
41,832
7,991
2,016
1,941
1,224
131,584
35,563
167,147
34,344
199,770
265,072
0
37,865
0
5
8,418
135
545,609
191,060
128,952
159,953
25,492
732
7,504
513,693
222,513
218,565
206,681
0
32
2016
11,665
41,137
22,631
24,014
7,181
4,797
2,070
904
114,399
35,642
150,041
50,353
218,866
249,202
7,880
43,177
0
0
7,005
0
576,483
212,741
155,712
175,192
33,734
0
5,296
582,675
242,424
237,060
235,979
0
Impreza
SUBARU BRZ
180,036
Forester
OEM
185,841
Levorg
Minicars
WRX
166,710
167,147
150,041
Legacy
Exiga
200,000
150,000
100,000
50,000
0
2012
2013
2014
2015
2016
Non-consolidated Automobile Export Units by Model (Number of units)
Years ended March 31
Impreza
Tribeca
CKD Overseas
Forester
Exiga
Levorg
SUBARU BRZ
576,483
545,609
499,194
384,023
314,999
Legacy
WRX
OEM
600,000
450,000
300,000
150,000
175,256
185,757
165,554
222,513
242,424
0
2012
2013
2014
2015
2016
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Non-consolidated Automobile Sales (Number of units)
Non-consolidated Domestic Automobile Sales by Model (Number of units)
Domestic units:
Legacy
Impreza
Forester
Levorg
WRX
Exiga
SUBARU BRZ
OEM
Passenger cars
Minicars
Domestic total
Export units:
Legacy
Impreza
Forester
Levorg
WRX
Tribeca
Exiga
SUBARU BRZ
OEM
Export total
U.S. retail sales1
Legacy
Impreza
Forester
WRX
Tribeca
SUBARU BRZ
U.S. total
CKD overseas
(SIA portion)
SIA production units
Legacy
Tribeca
2012
23,968
30,566
13,990
0
0
8,477
585
5,993
83,579
96,457
180,036
48,304
100,350
162,199
0
0
331
232
211
3,372
314,999
146,806
41,196
76,196
2,791
0
0
266,989
175,256
175,256
164,968
5,661
2013
25,424
54,306
18,951
0
0
7,845
6,850
2,953
116,329
50,381
166,710
30,559
198,232
142,745
0
0
222
407
11,542
316
384,023
164,680
89,195
76,347
0
2,075
4,144
336,441
185,757
183,729
177,471
3,713
2014
19,272
62,519
37,124
0
0
3,869
3,334
1,944
128,062
57,779
185,841
22,817
206,022
247,362
7,644
0
0
145
15,118
86
499,194
160,340
130,567
123,591
0
1,598
8,587
424,683
165,554
159,266
161,204
2,307
2015
14,734
40,277
21,569
41,832
7,991
2,016
1,941
1,224
131,584
35,563
167,147
34,344
199,770
265,072
37,865
0
0
5
8,418
135
545,609
191,060
128,952
159,953
25,492
732
7,504
513,693
222,513
218,565
206,681
0
2016
11,665
41,137
22,631
24,014
7,181
4,797
2,070
904
114,399
35,642
150,041
50,353
218,866
249,202
7,880
43,177
0
0
0
7,005
576,483
212,741
155,712
175,192
33,734
0
5,296
582,675
242,424
237,060
235,979
0
Years ended March 31
Legacy
Exiga
200,000
180,036
Impreza
SUBARU BRZ
Forester
OEM
185,841
Levorg
Minicars
WRX
166,710
167,147
150,041
150,000
100,000
50,000
Legacy
WRX
OEM
600,000
450,000
300,000
0
2012
2013
2014
2015
2016
Non-consolidated Automobile Export Units by Model (Number of units)
Years ended March 31
Impreza
Tribeca
CKD Overseas
Forester
Exiga
Levorg
SUBARU BRZ
576,483
545,609
499,194
384,023
314,999
150,000
175,256
185,757
165,554
222,513
242,424
1. U.S. Retail Sales are the aggregate figures for the calendar year from January through December.
0
2012
2013
2014
2015
2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
The Fuji Heavy Industries Ltd. Group
The Fuji Heavy Industries Ltd. Group (“the Group”) is
engaged in activities conducted under four business
divisions: Automobiles (which accounts for over 90%
of consolidated net sales), Aerospace, Industrial
Products, and Other.
On a consolidated settlement of accounts basis,
FHI (“the Company”) and 77 subsidiaries, as well as
2 equity-method affiliated companies, were included
in the scope of the Group’s consolidation as of March
31, 2016, the end of the fiscal year under review (April
1, 2015 – March 31, 2016 (“the fiscal year”)).
Overview
Business Environment
During the period, the domestic economy in Japan
continued to slowly recover, and, although weakness
was seen in the growth of emerging markets, there
was evidence of slight recovery in the global economy
as a whole, focused mainly on developed nations.
At the same time, the trend of economic conditions
has become more opaque from the impact of the
yen continuing to strengthen—while the dollar has
weakened—from January of this year, and from
fluctuations in capital markets.
In our mid-term management vision, “Prominence
2020,” the Group has announced its goal to be “a
high-quality company that is not big in size but has
distinctive strength” in 2020. In working to achieve
this goal, we have been focusing on two initiatives:
“enhancing the Subaru brand” with the aim of value-
added management, and “building a strong business
structure” that increases our resilience to changes
in the business environment and helps to ensure
sustained growth. In the fiscal year under review,
despite not introducing any new models, strong sales
continued in many markets, especially in the U.S., our
most important market. We were able to generate
steady results, including posting historic highs for
Subaru unit sales.
Performance Review
In light of the above factors, the Group recorded
increases in income and profit, as well as our highest
historical levels of consolidated net sales and all income
categories for the fourth consecutive fiscal year.
Net sales amounted to 3,232.3 billion yen, up
354.3 billion yen (12.3%) year on year, owing to
such factors as higher unit sales for automobiles and
impacts from favorable exchange rates.
Accompanying the increase in net sales was
strong income, with operating income 33.7% higher
year on year and fiscal year net income attributable to
owners of parent up 66.7% year on year.
Cost of Sales, Expenses and Operating Income
Operating Income
Operating income came to 565.6 billion yen, an
increase of 142.5 billion yen, or 33.7%, year on year.
Our operating margin, at 17.5% (up 2.8 points year
on year), stands at a high level within the automotive
industry.
Foreign exchange gains of 108.4 billion yen due
to exchange rates moving in the direction of a weaker
yen were a strong supporting factor. However, we
were able to cover a 57.8 billion yen increase in
33
Net Sales (Billions of yen)
Years ended March 31
4,000
3,000
2,000
1,000
0
3,232.3
2,877.9
2,408.1
1,913.0
1,517.1
2012
2013
2014
2015
2016
Operating Income (Loss) &
Net income (loss) attributable to owners of parent
(Billions of yen)
Years ended March 31
Operating Income (Loss)
Net income (loss) attributable to owners of parent
600
450
300
150
0
565.6
423.0
436.7
326.5
206.6
261.9
120.4
119.6
44.0
38.5
2012
2013
2014
2015
2016
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
various overhead costs and R&D expenses with profit
excluding the boost from exchange rates, including
an improved sales mix that added 58.8 billion yen and
cost reductions that added 33.1 billion yen. As a result,
we were able to grow income.
Income before Income Taxes and Minority
Interests, and Net Income
Income before income taxes and minority interests
rose 226.8 billion yen, or 57.8%, compared with the
previous fiscal year, to 619.0 billion yen. This included
a one-time profit of 48.2 billion yen gained from the
lawsuit to recover initial investments related to the
AH-64D helicopter for the Ministry of Defense.
Fiscal year net income attributable to owners of
parent after total income taxes, plus net gain (loss)
for the fiscal year attributable to non-controlling
shareholders, rose 174.8 billion yen, or 66.7%,
compared with the previous fiscal year, to 436.7
billion yen.
Segment Information
Automobiles Division
Net sales for this division stood at 3,039.4 billion yen,
an increase of 340.5 billion yen, or 12.6%, year on
year. Segment income also increased 142.7 billion
yen, or 35.6%, year on year to 543.6 billion yen.
Consolidated global unit sales inside and outside
Japan reached a new high for the fourth year in a
row, growing 47,000 units (5.2%) year on year to
958,000 units.
Domestic Market
Automobile demand lagged in the domestic market.
Passenger vehicle unit sales for the fiscal year under
review were on a par with the previous fiscal year,
while mini car unit sales decreased 16.6% year on year.
In this environment, the Group’s unit sales in
Japan dipped 17,000 units year on year (10.7%) to
145,000 units. Despite strong unit sales of some
models, including the Impreza, Forester, and Crossover
7, there were lower unit sales for the one-year post-
launch Levorg and Legacy. Passenger vehicle unit sales
fell by 16,000 units, or 12.7%, year on year, to 112,000
units. Additionally, mini car unit sales, with the Stella
showing sluggish sales a year after its launch date, fell
1,000 units (3.4%) year on year to 34,000 units.
Overseas Market
Overseas unit sales amounted to 813,000 units,
an increase of 65,000 units, or 8.6%, year on year.
Outback maintained strong results throughout the
fiscal year, while Crosstrek (called Subaru XV outside
North America) continued to sell well in North America.
Furthermore, increased unit sales were contributed
by Levorg, which started shipping in Europe from the
second half of the fiscal year.
By region, units sold in North America increased
60,000 units, or 10.6%, year on year to 630,000 units.
In Europe and Russia, sales volume was relatively
unchanged at 48,000 units. China saw a decrease of
9,000 units, or 17.5%, to 44,000 units, while unit sales
in Australia increased 6.000 units, or 14.7%, to 45,000
units, with other regions up 8,000 units, or 21.0%, to
46,000 units. Sales in North America posted a record
high for the seventh fiscal year in a row.
34
Analysis of Increases and Decreases in Operating Income
(Consolidated, Three-Year YoY Comparison) (Billions of yen)
70.3
12.4
103.7
326.5
-66.6
-23.2
423.0
Operating income
FYE March 2014
Gain on currency
exchange
108.4
423.0
Improvement of
mixture and others
sales volume &
58.8
Cost reduction
SG&A expenses
and others
33.1
R&D expenses
Operating income
FYE March 2015
565.6
-39.0
-18.8
Cost reduction
SG&A expenses
and others
R&D expenses
Operating income
FYE March 2016
Gain on currency
exchange
99.9
Improvement of
mixture and others
sales volume &
32.0
Operating income
FYE March 2015
565.6
-168.6
420.0
-91.3
-17.6
Operating income
FYE March 2016
Improvement of
mixture and others
sales volume &
Cost reduction
Gain on currency
exchange
SG&A expenses
and others
R&D expenses
Operating income
FYE March 2017
(plan)*
*Figures in projections for FYE March 2017 were announced May 12, 2016, then revised August 3, 2016.
For details, please see the Company website (http://www.fhi.co.jp/english/ir/index.html).
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
Aerospace Division
Net sales for this division stood at 152.8 billion yen,
an increase of 10.0 billion yen, or 7.0%, year on year.
Segment income decreased 0.7 billion yen, or 3.8%,
year on year to 18.2 billion yen.
Lower sales of the T-5 training aircraft and aerial
simulation targets to the Ministry of Defense led net
sales to trail that of the previous fiscal year, while sales
to the commercial sector increased over the previous
fiscal year thanks to net sales-boosting factors such
as the exchange rate and a surge in production of the
Boeing 777, among others.
Industrial Products Division
Net sales for this division came to 32.6 billion yen,
an increase of 3.5 billion yen, or 12.2%, year on year.
Segment income decreased 0.7 billion yen, or 89.5%,
year on year to 0.1 billion yen.
Although sales grew for leisure-related engines
in North America, an expense of 0.9 billion to handle
functional
issues with these products weighed
income down.
Other Division
Net sales for this division stood at 7.5 billion yen,
an increase of 0.4 billion yen, or 5.2%, year on year.
Segment income also increased 1.0 billion yen, or
53.6%, year on year to 2.9 billion yen.
with the previous fiscal year-end.
Of this total, current assets stood at 1,784.1
billion yen, up 310.8 billion yen, while total property,
plant and equipment rose 81.9 billion yen to 808.3
billion yen, both compared to the previous fiscal
year-end. Current assets rose due to increases in
funds in hand plus securities by 334.6 billion yen,
which includes cash and deposits, while property,
Net Sales by Segment (Billions of yen)
Years ended March 31
Operating Income by Segment (Billions of yen)
Years ended March 31
Automobiles
Aerospace
Industrial Products
Other
Automobiles
Aerospace
Industrial Products
Other
Corporate and Elimination
4,000
3,000
2,000
1,000
3,232.3
2,877.9
2,408.1
1,913.0
1,517.1
565.6
423.0
326.5
600
450
300
150
120.4
44.0
0
2012
2013
2014
2015
2016
0
2012
2013
2014
2015
2016
Net Sales by Segment (Billions of yen)
Operating Income by Segment (Billions of yen)
2012
2013
2014
2015
2016
Automobiles
1,389.1
1,779.0
2,246.6
2,699.0
3,039.4
80.3
33.6
14.2
89.1
30.1
14.7
124.4
142.8
152.8
29.8
7.3
29.0
7.1
32.6
7.5
1,517.1
1,913.0
2,408.1
2,877.9
3,232.3
Total
35
Automobiles
Aerospace
Industrial Products
Other
Corporate and Elimination
2012
39.4
2.9
0.5
1.0
0.2
44.0
2013
111.0
6.8
0.6
1.6
0.4
120.4
2014
309.0
14.1
0.6
2.1
0.6
326.5
2015
400.9
18.9
0.8
1.9
0.6
423.0
2016
543.6
18.2
0.1
2.9
0.8
565.6
Liquidity and Financing
Financial Position
Total assets as of March 31, 2016 stood at 2,592.4
billion yen, an increase of 392.7 billion yen compared
Aerospace
Industrial Products
Other
Total
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
plant and equipment rose due to an increase of 57.9
billion yen in noncurrent assets.
Total liabilities were up 74.0 billion yen year on
year, to 1,243.0 billion yen. The main factors behind
this increase were a 25.9 billion yen rise in accounts
payable with accounts payable-trade and electronically
recorded monetary obligations, and a rise in income
taxes payable of 45.3 billion yen.
Note that the fiscal year-end balance of interest-
bearing debt decreased 41.2 billion yen to 170.0
billion yen. The debt/equity ratio (interest-bearing
debt over shareholders’ equity) remained at a safe
level of 0.13.
Net assets totaled 1,349.4 billion yen, up 318.7
billion yen compared with the end of the previous
fiscal year. This was primarily due to an increase
in retained earnings of 351.6 billion yen, reflecting
the recording of net income in the fiscal year under
review. The increase in retained earnings boosted
the shareholders’ equity ratio to 51.8%, a 5.3-point
increase year on year.
Cash Flows
In the fiscal year under review, net cash provided by
operating activities was 614.3 billion yen, compared
with 311.5 billion yen in the previous fiscal year. Income
before income taxes and minority interests stood at
619.0 billion yen, received liability compensation at
48.2 billion yen, and total income taxes paid at 144.4
billion yen.
Net cash used in investing activities was 255.7
billion yen in the fiscal year under review compared
with 172.8 billion yen used in the previous fiscal year.
Expenditures (net) due to acquisition of noncurrent
assets were 125.8 billion yen, while expenditures
(net) due to acquisition of investment securities were
21.8 billion yen.
As a result, free cash flow amounted to 358.6
billion yen, compared to 138.8 billion yen provided in
the previous fiscal year.
Net cash used in financing activities totaled 126.2
billion yen in FYE March 2016, compared with 110.5
billion yen in the preceding fiscal year. Expenditures
(net) for the repayment of long-term borrowings were
33.0 billion yen and 84.9 billion yen was spent for
dividend payments.
Accounting for the aforementioned activities
and the effect of translation adjustments, cash and
cash equivalents as of the end of the fiscal year under
review stood at 829.5 billion yen.
Research and Development Expenses
During the fiscal year under review, R&D expenses
increased 18.9 billion yen, or 22.6%, year on year to
102.4 billion yen. Of that amount, 99.3 billion yen was
related to the Automobiles Division.
Our vehicle R&D was dedicated to advancing
product development to exceed customer expectations
for “enjoyment and peace of mind” through our "six
initiatives to enhance the Subaru brand." Additionally,
in our “eight initiatives for building a strong business
structure,” we strived to reduce costs and train our
human resources in order to strengthen our capacity
for innovation.
Our next-generation platform, called the “Subaru
Global Platform,” which we unveiled in March
36
Total Assets, Shareholders’ Equity & Ratio of Shareholders’ Equity
to Total Assets
Years ended March 31
Total Assets
Ratio of Shareholders’ Equity to Total Assets
Shareholders’ Equity
(Billions of yen)
3,000
2,000
1,000
2,592.4
2,199.7
51.8%
1,888.4
1,577.5
1,352.5
40.5%
37.7%
33.3%
46.5%
1,030.7
1,349.4
770.1
596.8
451.6
(%)
75.0
50.0
25.0
0
2012
2013
2014
2015
2016
0
Interest-Bearing Debt Balance & D/E Ratio (Billions of yen)
Years ended March 31
Interest-Bearing Debt Balance
(Billions of yen)
400
341.0
0.76
307.2
D/E Ratio
(Times)
1.00
300
200
100
0
269.7
0.75
0.52
211.2
170.0
0.50
0.35
0.21
0.25
0.13
2012
2013
2014
2015
2016
0
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
2016, is fundamental Subaru technology for unifying
development of all of our models under a single
platform design. Starting with the new Impreza model
launching in 2016, we will gradually incorporate the
platform in all new models that we bring to market.
With regard to safety, we are pushing the evolution
of driving support systems,
including EyeSight,
striving to create Automated follow-up on congrested
expressways in 2017 and Automated driving included
lane changes on expressways in 2020.
In terms of environmental initiatives, our product
development includes a new downsizing turbo engine,
as well as plug-in hybrid and electric vehicles to
comply with ZEV (Zero Emission Vehicle) regulations*
in California, U.S.A.
Furthermore, we are proceeding with the
development of a three row crossover planned for
launch in North America in 2018.
In order to further accelerate this development of
future products, we plan to boost R&D spending by
17.6 billion yen, or 17.2%, over the fiscal year under
review, to 120.0 billion yen in FYE March 2017.
*Regulations requiring automobile makers to have zero emission vehicles comprise a
certain proportion of their number of vehicles sold.
Capital Expenditures and Depreciation
Capital expenditures rose 25.0 billion yen, or 22.6%,
compared with the previous fiscal year, to 135.7
billion yen. The main expenditure was investing in
facilities related to production, R&D, and sales in the
Automobiles Division.
In this Division, 48.5 billion yen was spent primarily
on building out production capacity accompanying the
increase in vehicle sales, building production facilities
for new models, building R&D facilities, and expanding
and enhancing our sales network. In addition, 51.7
billion yen was spent at Subaru of Indiana Automotive,
Inc. (SIA), our production base in the U.S., primarily on
production facilities for production capacity expansion.
Depreciation increased 0.2 billion yen, or 0.3%,
year on year, to 65.0 billion yen.
For FYE March 2017, capital expenditures are
projected to increase by 24.3 billion yen, or 17.9%,
year on year, to 160 billion yen and depreciation is
scheduled to rise 15 billion yen, or 23.1%, year on
year, to 80 billion yen.
Basic Policy Regarding the Distribution of Profits
FHI views the interest of shareholders as a critical
task for management. Based on maintaining continual
dividend payments, we apply a results-linked approach
that takes into consideration such factors as earnings,
investment plans, and operating conditions. The
dividend each fiscal year is determined based on a
20-40% consolidated dividend payout ratio and takes
a variety of conditions into consideration.
In light of these conditions, FHI distributed a total
dividend of 144 yen per share in the fiscal year under
review, a 76-yen increase over the previous fiscal year.
Retained earnings are allocated toward bolstering our
financial position and investing in future growth and
progress, including strengthening our production and
sales frameworks and funding R&D so that we can
continue to create compelling products. In FYE March
2017, we plan to follow our current trend and pay a
dividend of 144 yen per share (72-yen half-year and
37
Cash Flows from Operating Activities & Cash Flows from
Investing Activities (Billions of yen)
Years ended March 31
Cash Flows from Operating Activities
Cash Flows from Investing Activities
700
350
0
313.0
311.5
166.7
-71.4
-33.9
-172.8
54.9
-26.6
-350
2012
2013
2014
2015
Free Cash Flow (Billions of yen)
Years ended March 31
614.3
-255.7
2016
358.6
279.1
138.8
95.3
28.3
2012
2013
2014
2015
2016
400
300
200
100
0
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
Research and Development Expenses (Billions of yen)
Years ended March 31
120
90
60
30
0
102.4
83.5
60.1
48.1
49.1
2012
2013
2014
2015
2016
Capital Expenditures, Depreciation Expenses (Billions of yen)
Years ended March 31
Capital Expenditures
Depreciation Expenses
150
120
90
60
30
0
135.7
110.7
70.2
68.5
64.8
65.0
54.3
53.7
55.9
54.9
2012
2013
2014
2015
2016
year-end dividends).
Additionally, the Board of Directors approved
a 15-million share (or 48.0 billion yen) maximum
common share buyback aimed at boosting capital
efficiency and value for shareholders. We plan to
retire all of the shares bought back. The buyback
period lasts until September 30, 2016.
Outlook
Outlook for Our Mid-term Management Vision
The Group has been striving to become, by the year
2020, the type of company outlined in our mid-term
management vision “Prominence 2020,” which
we announced in 2014. This ideal that we hope to
achieve, and the direction of initiatives towards it,
remain unchanged.
Now two years after formulating this vision,
however, our progress and our operating environment
have exceeded our initial estimates and continue to
change. Accordingly, we have revised and updated
our unit sales and production plans in order to further
accelerate our initiatives for “enhancing the Subaru
brand.”
First, with regard to unit sales, we made an
upward revision to our 2020 consolidated global sales
unit forecast. After our review of markets, including
the on-going sales strength in the North American
market and the continued challenges of the Japanese
market, we now expect unit sales to top 1,200
thousand units, as opposed to the original target north
of 1,100 thousand units.
Along with revising unit sales upward, we
re-assessed production plans and raised output targets
38
from “1,050 thousand units in FY 2021” to “1,040
thousand units at the end of 2016 and 1,130 thousand
units in FY 2019.”* This will facilitate early steps to
relieve continuing supply shortfalls in the U.S.
At the same time, we formulated a new Three-
Year Profit Plan for FYE March 2017–FYE March
2019. We assumed an exchange rate of 100 yen/US$,
targeting 3-year total net sales of 9,800 billion yen,
operating income of 1,100 billion yen, R&D expenses
of 360.0 billion yen, and capital expenditures of 470.0
billion yen. While expanding investment for growth,
we aim to establish a highly profitable business model
that maintains a profit margin at the 11% level, even
with an exchange rate of 100 yen/US$.
*Production capacity at normal operation levels. Output at full operation, including over-
time and weekend production, would be 1,276 thousand units.
Results for FYE March 2017
As for consolidated unit sales for FYE March 2017,
we forecast an increase in units sold in the continually
favorable North American market, adding 92,000 units
(9.6%) year on year, to reach 1,050 thousand units
and exceed for the first time one million Subarus sold.
For consolidated performance, we forecast lower
income and profit based on an expected stronger yen
at average annual exchange rates of 105 yen/US$
(previously 121 yen/US$) and 120 yen/€1 (previously
133 yen/€1).
For net sales, we forecast a decline to 3,170.0
billion yen, down 62.3 billion yen (1.9%) from the
fiscal year under review, representing a decrease of
338.1 billion yen on currency exchange, despite a
270.1 billion yen improvement in sales mix resulting
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
from increasing unit sales and other factors.
For operating income, despite income gains
from improved sales mix and cost reductions, we
expect a decrease of 145.6 billion yen, or 25.7%, year
on year to 420.0 billion yen, due to 168.6 billion yen
from currency fluctuations and 108.9 billion yen from
expected increases in R&D and SG&A expenses.
We also forecast 293.0 billion yen, down 143.7 billion
yen (32.9%) year on year, in fiscal year net income
attributable to owners of parent.
Forecast for Consolidated Results (Billions of yen)
Years ended March 31
2016
2017 (plan)
Change
Net sales
Japan
Overseas
Operating income
Ordinary Income
Income before income taxes and minority interest
Net income attributable to owners of parent
Exchange rate (in yen)
¥/$
¥/€
3,232.3
3,170.0
605.4
610.3
2,626.9
2,559.7
-62.3
4.9
-67.2
-145.6
-157.0
-206.0
-143.7
420.0
420.0
413.0
293.0
105
120
-16
-13
565.6
577.0
619.0
436.7
121
133
*Figures in projections for FYE March 2017 were announced May 12, 2016, then revised August 3, 2016.
For details, please see the Company website (http://www.fhi.co.jp/english/ir/index.html).
Forecast for Global Automobile Sales (Thousand units)
Years ended March 31
Japan:
Passenger cars
Minicars
Subtotal
Overseas:
United States
Canada
Russia
Europe
Australia
China
Other
Subtotal
Total
2016
2017 (plan)
Change
111.6
33.7
145.3
119.0
37.3
156.3
582.7
643.1
47.6
5.7
41.8
44.6
44.4
45.8
52.6
9.6
40.1
48.2
48.5
51.2
812.6
957.9
893.4
1,049.70
7.5
3.6
11.0
60.4
5.0
3.9
-1.7
3.6
4.1
5.4
80.8
91.8
39
Business Risks
Operational and other risks that could significantly
influence the decisions of investors and impact the
Company’s financial status are set out below.
Based on information available to the Group as of
the end of the consolidated fiscal year under review, the
enumerated risks include forward-looking statements,
but do not encompass every possible risk posed to
the Group. As such, there are other risk factors which
could influence investors and their decisions.
(1) Economic Trends
Economic trends in countries and regions that comprise
important markets for the Group could potentially
impact the Group’s business performance. In Japan and
North America, key markets for the Group, economic
recession, decreasing demand or increasing price
competition could undermine the sales and profitability
of the Group’s products and services.
(2) Currency Exchange Rate Fluctuations
The Group’s ratio of overseas net sales stood
at 81.3%. The Group’s consolidated
financial
statements, which are presented in Japanese yen,
are affected by translation of overseas net sales,
operating income and assets from local currencies,
particularly U.S. dollars, into yen. Accordingly, in the
event that discrepancies arise between projected
exchange rates in full-year forecasts and actual
rates at the time of account settlement, the Group’s
business performance and financial position may
be adversely affected when the yen appreciates or
positively affected when the yen depreciates.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Management’s Discussion and Analysis of Results of Operations and Financial Position
The Company uses forward exchange rate
contracts and other circumstance-appropriate risk
hedges to minimize the Group’s sensitivity to such
currency exchange risks. However, the effect of
severe fluctuations in currency exchange rates at
the end of the fiscal year could result in a loss on
valuation of derivatives and have a major impact on
non-operating expenses.
(3) Dependence on Certain Businesses
The Group is mainly comprised of the Automobiles,
Industrial Products
and Aerospace business
segments. However, the Automobiles business
segment accounts for the overwhelming majority
of the Group’s business operations. Accordingly, in
the event that automobile-related demand, market
conditions, price competition with other automakers,
or other factors exceed projected levels, the entire
Group’s overall business performance and financial
position could be significantly affected.
(4) Changes in Market Appraisal
The Group develops, manufactures and releases new
products based on appropriate timing and pricing
in line with product planning that reflects market
demand and customer needs. Such actions are the
most important factors in maintaining stable increases
in Group business performance. In the event that
market appraisals of new model vehicles and other
new products do not meet sales plan expectations
or that the obsolescence rate of current products
exceeds forecasts, the Group’s business performance
and financial position could be significantly affected.
(5) Dependence on Specific Suppliers, Raw
Materials, and Components
The Group procures raw materials, components and
other items from numerous suppliers. However,
there are cases in which the Group relies on certain
items and/or a limited number of suppliers. Due to
tightening supply and demand or other factors, the
inability to procure supplies in a manner that ensures
stable costs, delivery dates and quality could seriously
impact the Group’s business performance and
financial position.
(8) Retirement Benefits and Retirement Benefit
Obligations
The Group’s employee retirement benefit costs and
obligations are calculated based on the following
assumptions: retirement benefit obligation discount
rates and the expected long-term rate of return on
pension assets, both of which are established based
on mathematical calculations. However, in the event
that actual performance differs from the assumptions,
the Group’s business performance and financial
position could be affected over the long term.
(6) Protection of Intellectual Property
The Group works to protect its intellectual property
through the use of patents, designs, and trademarks
in such areas as technologies and expertise that
ensure product differentiation. However, the Group
could experience a decrease in sales or the need
for litigation procedures in cases where a third party
makes unauthorized use of the Group’s intellectual
property to manufacture similar products, as well as
in specific regions where intellectual property right
protection is limited. Such factors could impact the
Group’s profitability.
(7) Product Defects
The Group places the highest priority on the safety of the
products it develops, manufactures and sells. However,
completely avoiding defects and recalls, etc. regarding
all products and services is impossible. The substantial
cost, damage to our brand image, etc. associated with
a major recall could significantly affect the Group’s
business performance and financial position.
40
(9) Environmental and Other Legal Regulations
The Group is subject to various domestic and overseas
legal regulations in relation to such areas as exhaust
emissions, energy conservation, noise, recycling,
the level of pollutants emitted from manufacturing
facilities, and safety of automobiles and other
products. The Group’s business performance and
financial position could be affected by an increase in
costs due to future regulatory changes.
(10) The Impact of Natural Disasters, War, Terror,
Strikes and Other Events
The occurrence of natural disasters such as major
earthquakes, typhoons, etc., and diseases, wars,
terrorist attacks or other events, could impede
the Group’s business activities as well as delay
or suspend raw material/component purchases,
production, product sales/transport, and the provision
of services. The Group’s business performance and
financial position could be affected in the event that
such delays or suspensions are prolonged.
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016
Corporate Data
(as of March 31, 2016)
Stock Information
(as of March 31, 2016)
Company Name
Fuji Heavy Industries Ltd.
Established
July 15, 1953
Paid-in Capital
¥153,795 million
Number of Employees
14,234 (consolidated: 31,151)
Website Address
http://www.fhi.co.jp/english/ir/
Head Office
Ebisu Subaru Bldg., 1-20-8, Ebisu, Shibuya-ku, Tokyo 150-8554, Japan
Phone & Fax: +81-3-6447-8000
Investor Relations Office
Ebisu Subaru Bldg., 1-20-8, Ebisu, Shibuya-ku, Tokyo 150-8554, Japan
Phone: +81-3-6447-8878 Fax: +81-3-6447-8107
Domestic Manufacturing Divisions
Gunma Manufacturing Division (Automobiles Division)
Utsunomiya Manufacturing Division (Aerospace Division)
Saitama Manufacturing Division (Industrial Products Division)
Common Stock Authorized
1,500,000,000 shares
Common Stock Issued
782,865,873 shares
Number of Shareholders
85,200
Stock Exchange Listing
Tokyo Stock Exchange
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku, Tokyo
103-0028, Japan
Major Shareholders
Name
Toyota Motor Corporation
The Master Trust Bank of Japan, Ltd.
(Trust account)
Japan Trustee Services Bank, Ltd.
(Trust account)
Mizuho Bank, Ltd.
Suzuki Motor Corporation
Sompo Japan Nipponkoa Insurance Inc.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
FHI's Client Stock Ownership
MIZUHO SECURITIES ASIA
LIMITED-CLIENT A/C 69250601
Nippon Life Insurance Company
Number of Shares Held
(in thousands)
Percentage of
Total Shares
129,000
16.48
44,889
42,809
16,078
13,690
12,157
10,295
10,069
9,902
9,513
5.73
5.47
2.05
1.75
1.55
1.32
1.29
1.26
1.22
Principal Consolidated Subsidiaries and Affiliates
Quarterly Common Stock Price Range (Tokyo Stock Exchange) (Yen)
Company Name
Percentage
of
Voting Rights
Japan
Fuji Machinery Co., Ltd.
Ichitan Co., Ltd.
Kiryu Industrial Co., Ltd.
100.0%
100.0%
100.0%
Main Business Activities
Manufacture and sales of automobile parts and industrial product parts
Manufacture and sales of forged automobile / industrial product parts
Manufacture of Subaru specially equipped automobiles and distribution of Subaru automobile parts
Subaru Tecnica International Inc.
100.0%
Management of SUBARU Motorsport Activities, Development and manufacture of competition
parts, tuning parts and accessories for SUBARU cars
Subaru Kohsan Co., Ltd.
Subaru Finance Co., Ltd.
Yusoki Kogyo K.K.
TOKYO SUBARU INC.
Overseas
Subaru of America, Inc.
Fuji Heavy Industries U.S.A., Inc.
Subaru of Indiana Automotive, Inc.
Subaru Canada, Inc.
Subaru Europe N.V./S.A.
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Leasing of real estate, shopping mall management and travel agency operations
Lease & credit facilities provider for Subaru automobiles, financing for FHI subsidized companies,
lease for various facility equipment, rolling stock & FHI made garbage trucks and sales of insurance
Manufacture and sales for aircraft parts
Distribution, sales and services of Subaru automobiles (including 32 other dealerships)
Distribution and sales of Subaru automobiles and parts
Engineering research of Subaru automobiles in North America Market
Manufacture of Subaru automobiles and contracted manufacture of Toyota automobiles
Distribution and sales of Subaru automobiles and parts
Distribution, sales and marketing of Subaru automobiles and parts
6,000
5,000
4,000
3,000
2,000
1,000
0
1Q 2Q 3Q 4Q
2012
1Q 2Q 3Q 4Q
2013
1Q 2Q 3Q 4Q
2014
1Q 2Q 3Q 4Q
2015
1Q 2Q 3Q 4Q
2016
High
Low
697
402
1,609
545
3,015
1,330
4,617
2,380
5,223
3,411
41
FUJI HEAVY INDUSTRIES LTD.ANNUAL REPORT 2016 Fuji Heavy Industries Ltd.
Ebisu Subaru Bldg., 1-20-8, Ebisu, Shibuya-ku, Tokyo 150-8554
Phone: +81-3-6447-8000
Fax: +81-3-6447-8184
http://www.fhi.co.jp/english/ir/
Consolidated Balance Sheets
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
As of March 31, 2016 and 2015
112.69
ASSETS
Current assets:
Cash and deposits (Note 4 and 5)
Notes and accounts receivable-trade (Note 5)
Lease investment assets (Note 5 and 17)
Short-term investment securities (Notes 4, 5 and 6)
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets (Note 12)
Short-term loans receivable (Note 5)
Other current assets
Allowance for doubtful accounts
Total assets
Property, plant and equipment (Notes 7 and 9)
Accumulated depreciation
Accumulated impairment loss
Total property, plant and equipment
Investments and other assets:
Intangible assets
Investment securities (Note 5 and 6)
Investments in non-consolidated subsidiaries and affiliated companies
Net defined benefit assets(Note 11)
Deferred tax assets (Note 12)
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total assets
LIABILITIES AND NET ASSETS
Current liabilities:
Notes and accounts payable-trade (Note 5)
Electronically recorded obligations-operating (Note 5)
Short-term loans payable (Note 5 and 7)
Current portion of long-term debts (Note 5 and 7)
Accrued expenses (Note 5)
Provision for bonuses
Provision for product warranties
Accrued income taxes (Note 5 and 12)
Other current liabilities (Note 5, 7 and 12)
Total current liabilities
Long-term liabilities:
Long-term debts (Note 5 and 7)
Net defined benefit liability(Note 11)
Deferred tax liabilities (Note 12)
Other long-term liabilities (Note 7)
Total long-term liabilities
Contingent liabilities (Note 19)
Net assets: (Note 13)
Shareholders' equity:
Capital stock
Authorized— 1,500,000,000 shares
782,865,873 shares
Issued —
Capital surplus
Retained earnings
Less－treasury stock, at cost,
2016—
2015—
Total shareholders’ equity
2,487,843 shares
2,483,395 shares
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Remeasurements of other postretirement benefits
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these balance sheets.
Millions of yen
2016
2015
Thousands of
U.S. dollars
(Note 1)
2016
¥507,553
140,319
21,532
500,572
192,705
50,666
34,996
90,893
151,973
93,509
(625)
1,784,093
1,485,530
(886,905)
(25,992)
572,633
20,989
106,987
5,415
1,774
16,339
87,607
(3,427)
235,684
¥2,592,410
¥228,821
164,540
24,098
444,737
203,347
52,734
39,569
78,789
157,070
80,796
(1,233)
1,473,268
$4,503,976
1,245,177
191,073
4,442,027
1,710,045
449,605
310,551
806,576
1,348,593
829,790
(5,546)
15,831,866
1,423,977
(882,752)
(26,528)
514,697
13,182,447
(7,870,308)
(230,650)
5,081,489
16,850
104,157
10,678
3,659
13,113
96,371
(33,079)
211,749
186,254
949,392
48,052
15,742
144,991
777,416
(30,411)
2,091,437
¥2,199,714 $23,004,792
Millions of yen
2016
2015
Thousands of
U.S. dollars
(Note 1)
2016
¥326,625
91,476
33,252
43,692
132,759
23,554
51,251
100,272
156,614
959,495
93,030
18,586
18,769
153,119
283,504
¥317,801
74,420
41,443
44,329
126,007
21,668
49,708
54,987
142,693
873,056
$2,898,438
811,749
295,075
387,719
1,178,090
209,016
454,796
889,804
1,389,777
8,514,464
125,420
17,963
13,996
138,560
295,939
825,539
164,930
166,554
1,358,763
2,515,787
153,795
160,071
1,049,016
(1,402)
153,795
160,071
697,414
(1,382)
1,364,762
1,420,454
9,308,865
(12,441)
1,361,480
1,009,898
12,081,640
11,344
(13,415)
(12,808)
(2,869)
17,986
10,025
(11,616)
(3,876)
100,666
(119,043)
(113,657)
(25,459)
(17,748)
5,679
1,349,411
12,519
8,302
1,030,719
(157,494)
50,395
11,974,541
¥2,592,410
¥2,199,714
$23,004,792
Consolidated Statements of Income
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2016 and 2015
Net sales (Note 2)
Cost of sales (Note 14)
Gross profit
Selling, general and administrative expenses (Note 2 and 15)
Operating income (loss)
Other income (expenses):
Interest and dividend income
Interest expenses
Equity in earnings of affiliates
Foreign exchange gains (losses)
Gain (loss) on valuation of derivatives
Gain (loss) on sales and retirement of noncurrent assets
Gain (loss) on sales of investment securities (Note 6)
Loss on valuation of investment securities (Note 6)
Loss on reduction of non-current assets
Reversal of allowance for doubtful accounts
Depreciation
Impairment loss (Note 9)
State subsidy
Other, net
Income before income taxes
Income taxes (Note 12):
Current
Deferred
Net income
Net income (loss) attributable to non-controlling Interests
Net income attributable to owners of the parent
Per share data (Note 2) :
Net income (loss)
—Basic
—Diluted *
Net assets
Cash dividends (Note 13)
The accompanying notes are an integral part of these statements.
112.69
Millions of yen
2015
¥2,877,913
2,017,490
860,423
437,378
423,045
Thousands of
U.S. dollars
(Note 1)
2016
$28,682,740
19,408,430
9,274,310
4,255,329
5,018,981
4,127
(2,903)
499
(24,277)
(2,003)
(3,305)
953
-
-
-
(985)
(38)
-
(2,907)
(30,839)
392,206
133,256
(6,199)
127,057
265,149
3,276
¥261,873
46,056
(22,176)
6,558
(18,245)
87,701
(40,199)
21,564
-
-
-
(8,705)
(98)
26,613
169,891
473,991
5,492,972
1,696,406
(75,641)
1,620,765
3,872,207
(2,618)
$3,874,825
2016
¥3,232,258
2,187,136
1,045,122
479,533
565,589
5,190
(2,499)
739
(2,056)
9,883
(4,530)
2,430
(5,387)
(1,660)
30,152
(981)
(11)
2,999
19,145
53,414
619,003
191,168
(8,524)
182,644
436,359
(295)
¥436,654
Yen
U.S. dollars
¥559.54
-
1,721.90
144.00
¥335.57
-
1,310.15
68.00
$4.97
-
15.28
1.28
*For the year ended March 31, 2016 and 2015 diluted information is not presented because potentially dilutive securities do not exist.
Consolidated Statements of Comprehensive Income
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2016 and 2015
Net Income
Other comprehensive income (Note 3)
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Remeasurements of other postretirement benefits of foreign consolidated subsidiaries
Share of other comprehensive income (loss) of associates accounted for using equity m
Total other comprehensive income
Comprehensive income
Comprehensive income (loss) attributable to:
Owners of the parent
Non-controlling interests
2016
¥436,359
(6,642)
(23,777)
(1,192)
1,007
(52)
(30,656)
Millions of yen
2015
¥265,149
7,357
37,321
2,270
(2,957)
131
44,122
Thousands of
U.S. dollars
(Note 1)
2016
$3,872,207
(58,940)
(210,995)
(10,578)
8,936
(461)
(272,038)
405,703
309,271
3,600,169
406,387
(684)
305,229
4,042
3,606,238
(6,070)
Consolidated Statements of Changes in Net Assets
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
As of March 31, 2016 and 2015
112.69
Shareholders' equity
Capital stock
Balance at the beginning of current period
Balance at the end of current period
Capital surplus
Balance at the beginning of current period
Changes of items during the period
Disposal of treasury stock
Total changes of items during the period
Balance at the end of current period
Retained earnings
Balance at the beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during the period
Dividends from surplus
Net income attributable to owners of the parent
Disposal of treasury stock
Other
Total changes of items during the period
Balance at the end of current period
Treasury stock
Balance at the beginning of current period
Changes of items during the period
Purchase of treasury stock
Disposal of treasury stock
Other
Total changes of items during the period
Balance at the end of current period
Total shareholders' equity
Balance at the beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during the period
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Other
Total changes of items during the period
Balance at the end of current period
Millions of yen
Thousands of
U.S. dollars
(Note 1)
2016
2015
2016
¥153,795
153,795
¥153,795
153,795
$1,364,762
1,364,762
160,071
160,071
1,420,454
0
0
160,071
697,414
-
697,414
(85,105)
436,654
(1)
54
351,602
1,049,016
(1,382)
(20)
0
-
(20)
(1,402)
1,009,898
-
1,009,898
(85,105)
436,654
(20)
(1)
54
351,582
¥1,361,480
0
0
160,071
483,910
1,385
485,295
(49,970)
261,873
-
216
212,119
697,414
(1,395)
(22)
-
35
13
(1,382)
796,381
1,385
797,766
(49,970)
261,873
(22)
-
251
212,132
¥1,009,898
0
0
1,420,454
6,188,783
-
6,188,783
(755,213)
3,874,825
-
479
3,120,082
9,308,865
(12,264)
(177)
0
-
(177)
(12,441)
8,961,736
-
8,961,736
(755,213)
3,874,825
(177)
(9)
479
3,119,904
$12,081,640
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Foreign currency translation adjustment
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Remeasurements of defined benefit plans
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Remeasurements of other postretirement benefits
of foreign consolidated subsidiaries
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Total accumulated other comprehensive income
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Non-controlling interests
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during the period
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Other
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
The accompanying notes are an integral part of these statements.
Millions of yen
Thousands of
U.S. dollars
(Note 1)
2016
2015
2016
¥17,986
¥10,629
$159,606
(6,642)
(6,642)
11,344
10,025
(23,440)
(23,440)
(13,415)
7,357
7,357
17,986
(58,940)
(58,940)
100,666
(26,661)
88,961
36,686
36,686
10,025
(208,004)
(208,004)
(119,043)
(11,616)
(13,886)
(103,079)
(1,192)
(1,192)
(12,808)
(3,876)
1,007
1,007
(2,869)
12,519
(30,267)
(30,267)
(17,748)
8,302
(2,623)
(2,623)
5,679
1,030,719
-
1,030,719
(85,105)
436,654
(20)
(1)
54
(32,890)
318,692
¥1,349,411
2,270
2,270
(11,616)
(10,578)
(10,578)
(113,657)
(919)
(34,395)
(2,957)
(2,957)
(3,876)
8,936
8,936
(25,459)
(30,837)
111,092
43,356
43,356
12,519
4,527
3,775
3,775
8,302
770,071
1,385
771,456
(49,970)
261,873
(22)
-
251
47,131
259,263
¥1,030,719
(268,586)
(268,586)
(157,494)
73,671
(23,276)
(23,276)
50,395
9,146,499
-
9,146,499
(755,213)
3,874,825
(177)
(9)
479
(291,863)
2,828,042
$11,974,541
Consolidated Statements of Cash Flows
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
As of March 31, 2016 and 2015
Net cash provided by (used in) operating activities
Income (loss) before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Loss (gain) on sales and retirement of noncurrent assets
Loss (gain) on sales and valuation of investment securities
Decrease (increase) in operating loans receivable
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other extraordinary income
Other, net
Sub total
Interest and dividends income received
Interest expenses paid
Proceeds from compensation for damage
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net decrease (increase) in time deposits
Purchase of short-term investment securities
Proceeds from sales of short-term investment securities
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivable
Collection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Cash and cash equivalents at end of period
The accompanying notes are an integral part of these statements.
112.69
Millions of yen
Thousands of
U.S. dollars
(Note 1)
2016
2015
2016
¥619,003
72,938
(30,260)
(5,190)
2,499
4,530
2,957
(6,540)
22,791
(1,342)
30,082
(19,656)
15,538
707,350
5,668
(2,528)
48,184
(144,418)
614,256
(101,631)
(48,845)
47,032
(126,732)
975
(47,005)
25,240
(106,117)
108,636
(7,229)
(255,676)
(7,822)
11,760
(44,797)
-
(84,938)
(393)
(126,190)
(14,887)
217,503
¥392,206
71,821
(146)
(4,127)
2,903
3,305
(953)
(23,112)
19,283
(27,180)
38,223
(833)
31,753
503,143
4,361
(2,839)
0
(193,122)
311,543
(11,944)
(43,424)
17,905
(115,173)
1,540
(47,031)
26,364
(104,891)
108,065
(4,191)
(172,780)
(18,811)
6,190
(42,858)
(4,060)
(49,887)
(1,120)
(110,546)
25,998
54,215
$5,492,972
647,245
(268,524)
(46,056)
22,176
40,199
26,240
(58,035)
202,245
(11,909)
266,945
(174,425)
137,883
6,276,954
50,297
(22,433)
427,580
(1,281,551)
5,450,847
(901,864)
(433,446)
417,357
(1,124,607)
8,652
(417,118)
223,977
(941,672)
964,025
(64,149)
(2,268,844)
(69,412)
104,357
(397,524)
-
(753,731)
(3,487)
(1,119,798)
(132,106)
1,930,100
612,085
557,870
5,431,582
(127)
¥829,461
-
¥612,085
(1,127)
$7,360,556
Notes to Consolidated Financial Statements
FUJI HEAVY INDUSTRIES LTD. AND CONSOLIDATED SUBSIDIARIES
1. Basis of Presentation of the Financial Statements
The accompanying consolidated financial statements of Fuji Heavy Industries Ltd. (the "Company") have
been prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Law
and its related accounting regulations, and in conformity with accounting principles generally accepted in
Japan ("Japanese GAAP"), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements have been restructured and translated into English
from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministry of Finance, as required by the Financial
Instruments and Exchange Law. Certain supplementary information included in the statutory
Japanese-language consolidated financial statements, but not considered necessary for fair presentation, is
not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars in the accompanying consolidated financial
statements are included solely for the convenience of readers outside Japan, using the prevailing exchange
rate at March 31, 2016, which was ¥112.69 to U.S.$1. The convenience translation should not be construed
as a representation that the Japanese yen amounts have been, could have been, or could in the future be
converted into U.S. dollars at this or any other rate of exchange.
2. Summary of Significant Accounting Policies
[1] The Scope of Consolidation and Application of the Equity Method
The accompanying consolidated financial statements include the accounts of the Company and its majority
owned subsidiaries. All significant intercompany transactions and balances have been eliminated in
consolidation. The fiscal year-end of consolidated subsidiaries is the same as that of the parent company,
except for 4 consolidated foreign subsidiaries in fiscal year 2016 and 5 consolidated foreign subsidiaries in
fiscal year 2015, respectively, the fiscal year-end of those subsidiaries is December 31. The operating
results of those subsidiaries that have different fiscal year-end are consolidated by using the financial
statements as of each subsidiary’s respective fiscal year-end, the necessary adjustments being made
in consolidation if there are any significant transactions between January 1 and March 31.
The consolidated financial statements include the accounts of the Company and 77 subsidiaries in fiscal
year 2016 and 77 subsidiaries in fiscal year 2015, respectively.
In addition, 1 non-consolidated subsidiary and 1 affiliated company were accounted for by the equity
method in fiscal 2016; 1 non-consolidated subsidiary and 1 affiliated company were accounted for by the
equity method in fiscal 2015, respectively.
Investments in insignificant non-consolidated subsidiary and affiliated companies not accounted for by the
equity method are carried at cost.
The difference between the cost and the underlying net equity of investments in subsidiaries and affiliated
companies is allocated to identifiable assets based on their fair value at the date of acquisition. The
unallocated residual value of the excess of the cost over the fair value of the underlying net assets is
recognized as goodwill and amortized over a period of five years on a straight-line basis.
All assets and liabilities of subsidiaries, which include not only the Company’s interest in the subsidiaries but
also the non-controlling interest portion, are valued based on their fair value at the time the Company first
consolidates the subsidiary.
[2] Short-Term Investment Securities and Investment Securities
Under the Japanese accounting standards for financial instruments, available-for-sale securities for which fair
1
values are available are stated at their fair value as of the balance sheet dates with unrealized holding gains
and losses included as a separate component of net assets until realized, while securities for which fair values
are not readily available are stated at cost, as determined by the moving-average method, after taking into
consideration devaluation, if any, for permanent impairment. Held-to-maturity debt securities are stated using
the amortized cost method.
[3] Inventories
Inventories for regular sales are stated at cost, determined mainly by the moving-average cost method. (Book
value on the balance sheet is measured based on the lower of cost or market value.)
[4] Property, Plant and Equipment (Excluding Leased Assets)
Property, plant and equipment are stated at cost. Significant renewals and additions are capitalized; ordinary
maintenance, ordinary repairs, minor renewals and minor improvements are charged to the consolidated
statements of income as incurred.
Depreciation of the property, plant and equipment of the Company and its consolidated domestic
subsidiaries is principally calculated by the declining-balance method, except for those buildings (excluding
building improvements) acquired on or after April 1, 1998, for which the straight-line method is applied.
Depreciation of the property, plant and equipment of consolidated foreign subsidiaries is calculated by the
straight-line method over the estimated useful lives of the assets.
Estimated useful lives for depreciable assets are as follows:
Buildings and structures: 7–50 years
Machinery, equipment and vehicles: 2–20years
[5] Intangible Assets (Excluding Leased Assets)
Computer software used internally by the Company and its consolidated subsidiaries is amortized by the
straight-line method over the relevant economic useful lives of 3 or 5 years.
[6] Leased Assets
For leased assets under finance lease transactions in which the ownership is transferred to the lessee:
The leased assets are depreciated by the same method as used for other property, plant and equipment.
For leased assets under finance lease transactions in which the ownership is not transferred to the lessee:
The leased assets are depreciated by the straight-line method over the leased period and the residual value is
zero.
[7] Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided based on the amount calculated from the historical ratio of bad
debt for ordinary receivables, and estimated amounts of uncollectible accounts for specific overdue
receivables.
[8] Provision for Bonuses
Employees' bonuses are recognized as expenses for the period in which those are incurred.
[9] Provision for Product Warranties
The Company and its consolidated subsidiaries provide for accrued warranty claims on products sold based
on their past experiences of warranty services and estimated future warranty costs, which are included in
"Accrued expenses" in the accompanying consolidated balance sheets.
[10] Provision for Loss on Construction Contracts
2
The provision for losses on uncompleted construction of contracts in the Aerospace segment is provided
when substantial losses on the contracts are anticipated at the fiscal year-end for the next fiscal year and
beyond and such losses can be reasonably estimated.
[11] Accounting method for Retirement Benefits
Net defined benefit liability (assets) for employees is provided based on the estimated amounts of projected
pension and severance obligation and the fair value of plan assets at the end of the fiscal year. In determining
retirement benefit obligations, the straight-line basis is used for attributing expected benefit to periods.
Unrecognized prior service cost is being amortized on the straight-line method over a period (10-19 years)
that is shorter than the average remaining service period of the eligible employees. Unrecognized net
actuarial gain or loss is amortized from the following fiscal year on the straight-line method over a period
(primarily 16 years for fiscal years 2016 and 2015) that is shorter than the average remaining service period of
the eligible employees.
Directors and statutory auditors of the Company and its consolidated domestic subsidiaries are entitled to
receive a lump-sum payment at the time of severance or retirement, subject to shareholder approval. The
liabilities for such benefits, which are determined based on the Company’s and its consolidated subsidiaries’
internal rules, are included in "Other long-term liabilities" in the accompanying consolidated balance sheets.
[12] Translation of Foreign Currency-Denominated Accounts
Under the Japanese accounting standards for foreign currency translation, monetary assets and liabilities
denominated in foreign currencies are translated into Japanese yen at the exchange rates prevailing at each
balance sheet date with the resulting gain or loss included currently in the statement of income.
The assets and liabilities of foreign subsidiaries and affiliated companies are translated into Japanese yen at
the exchange rates in effect at the balance sheet dates of the foreign subsidiaries and affiliated companies,
except for common stock and capital surplus, which are translated at historical rates. Revenue and expense
accounts are translated at the average exchange rates during the respective years. The resulting foreign
currency translation adjustments are included in "Foreign currency translation adjustments" and
"Non-controlling interest" in the net assets section of the accompanying consolidated balance sheets.
[13] Revenue Recognition
The percentage-of-completion method is applied to revenue from construction contracts of Aerospace
division productions where certain elements are determinable with certainty at the end of fiscal year. (The
percentage of completion is estimated using the proportion-of-cost method). The completed-contract method
is applied to other works.
[14] Accounting for Lease Transactions
Sales and corresponding cost of sales under finance lease transactions conducted by certain domestic
consolidated subsidiaries are recognized on the effective date of each lease contract.
[15] Derivative Financial Instruments and Hedge Accounting
The Japanese accounting standards for financial instruments require that the Company and its consolidated
domestic subsidiaries state derivative financial instruments at their fair value and recognize changes in the fair
value as a gain or loss, unless such derivative financial instruments are used for hedging purposes.
For interest rate swap contracts used as a hedge that meet certain hedging criteria, the net amount to be
paid or received under the interest rate swap contract is added to or deducted from the interest on the assets
or liabilities for which the swap contract is executed.
Derivative financial instruments qualifying as a hedge, along with the underlying transactions, assets and
liabilities are as follows:
3
Financial Instrument
Interest swaps
Transactions, assets and liabilities
Borrowings
The risk exposures to movements in interest rates are hedged according to the Company’s and its
consolidated subsidiaries’ risk management policy. An evaluation of hedge effectiveness is not considered
necessary as the terms and notional amounts of these hedging instruments are the same as those of the
underlying transactions, assets and liabilities, and therefore they are presumed to be highly effective in
offsetting the effect of movements in interest rates at their inception as well as during their terms.
[16] Goodwill
Goodwill is principally amortized by the straight-line method over 5 years.
[17] Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and have negligible risk of changes in value due to their
short maturities.
[18] Income Taxes
The provision for income taxes is computed based on the pretax income for financial reporting purposes.
Deferred tax assets and liabilities are recognized for expected future tax consequences of temporary
differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A
valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit
will not be realized.
[19] Research and Development Expenses
Research and development costs are expensed as incurred and amounted to ¥102,373 million (US$ 908,448
thousand) and ¥83,535 million for fiscal years 2016 and 2015, respectively.
[20] Net Income per Share
Basic net income per share (EPS) is computed based on the average number of shares of common stock
outstanding during each year. Diluted EPS assumes the potential dilution that occurs if all the convertible
securities are converted or other contracts to issue common stock are exercised to the extent that they are
not anti-dilutive.
[21] Reclassification
Certain reclassifications have been made in the consolidated financial statements for the year ended March
31, 2015 to conform to the presentation for the year ended March 31, 2016.”
[22] Changes in Accounting Policy
The Accounting Standard for Business Combinations (ASBJ Statement No.21, September 13, 2013) and
Consolidated Financial Statements (ASBJ Statement No.22, September 13, 2013) and Business Divestitures
(ASBJ Statement No.7, September 13, 2013) were applied from the period of the first quarter of fiscal year
2016.
The presentation method of net income was changed and the reference to "minority interests" was changed
to "non-controlling interests". To conform to these changes in presentation, the quarterly consolidated
financial statements and consolidated financial statements in the previous fiscal year have been reclassified.
[23] Changes in Presentation
(Consolidated Statements of Income)
4
Consolidated Statements of Income for the fiscal year ended March 31,2016 include the following
reclassification.
"Real estate rent" which was presented as a separate account in the prior fiscal year, has been included in
“Other” in the current fiscal year due to its decreased financial materiality. To reflect this change, ¥532 million
of “real estate rent” separately stated under “Other income(expense)” in the prior fiscal year has been
reclassified into “Other” in the consolidated statements of income for the prior fiscal year provided herein.
5
3. Other comprehensive income
Amounts reclassified to net income (loss) in fiscal 2016 and 2015, which were recognized in other
comprehensive income in the current or previous periods and tax effects for each component of other
comprehensive income were as follows:
Millions of yen
2016
2015
Thousands of
U.S. dollars
2016
Valuation difference on available-for-sale
securities
Increase(decrease) during the year
Reclassification adjustments
Sub-total, before tax
Tax (expense) or benefit
Sub-total, net of tax
Foreign currency translation adjustment
Increase during the year
Reclassification adjustments
Sub-total, before tax
Tax (expense) or benefit
Balance at end of year, net of tax
Remeasurements of defined benefit plans
Increase(decrease) during the year
Reclassification adjustments
Sub-total, before tax
Tax (expense) or benefit
Balance at end of year, net of tax
Remeasurements of other postretirement
benefits of foreign consolidated
subsidiaries
Increase(decrease) during the year
Reclassification adjustments
Sub-total, before tax
Tax (expense) or benefit
Balance at end of year, net of tax
Share of other comprehensive income
of associates accounted for using
equity method
Increase during the year
Total other comprehensive income
(¥8,513)
(2,288)
(10,801)
4,159
(6,642)
-
(23,670)
(107)
(23,777)
-
(23,777)
-
(3,648)
2,406
(1,242)
50
(1,192)
-
1,548
-
1,548
(541)
1,007
¥10,660
(953)
9,707
(2,350)
7,357
-
37,321
-
37,321
-
37,321
-
1,246
3,035
4,281
(2,011)
2,270
-
(4,642)
-
(4,642)
1,685
(2,957)
($75,544)
(20,303)
(95,847)
36,907
(58,940)
-
(210,045)
(950)
(210,995)
-
(210,995)
-
(32,372)
21,351
(11,021)
444
(10,578)
-
13,737
-
13,737
(4,801)
8,936
(52)
(¥30,656)
131
¥44,122
(461)
($270,396)
6
4. Additional Cash Flow Information
Cash and cash equivalents as of March 31, 2016 and 2015, consisted of the following:
Millions of yen
Cash and deposits
Short-term investment securities
Short-term loans receivable
Sub-total
Less maturity over three months
Short-term investment securities excluding
cash equivalents
Short-term loans receivable excluding
repurchase agreement
Cash and cash equivalents
2016
¥507,553
500,572
151,973
1,160,098
(126,107)
(52,557)
2015
¥228,821
444,737
157,070
830,628
(25,911)
(45,562)
Thousands of
U.S. dollars
2016
$4,503,976
4,442,027
1,348,593
10,294,596
(1,119,061)
(466,386)
(151,973)
(147,070)
(1,348,593)
¥829,461
¥612,085
$7,360,556
7
5. Financial Instruments
(1) Summary of Financial Instruments Status
[1] Action Policy with Regard to Financial Instruments
With regard to planned capital expenditure to support Fuji Heavy Industries Ltd., its consolidated subsidiaries
and affiliated companies (the "FHI Group") in their main operations of automobile manufacturing and sales,
the FHI Group finances mainly from bank loans and the issue of corporate bonds. Temporary surpluses are
invested in highly secure financial assets. Bank loans and liquidation of accounts receivable are utilized to
provide short-term working capital. It is the FHI Group's policy to use derivatives as a way to avoid the risks
stated below and not to conduct speculative transactions.
[2] Details of Financial Instruments and Respective Risks
Notes and accounts receivable-trade and Lease investment assets are subject to customer credit risks. In
addition, operating receivables denominated in foreign currencies due to globalized business of the FHI
Group are subject to the risk of changes in foreign exchange rates. As a general rule, however, forward
foreign exchange contracts are utilized to hedge the foreign exchange rate risk, considering the net amount of
operating receivables denominated in foreign currencies that exceed foreign currency denominated operating
liabilities. Available-for-sale securities and investment securities are mainly stocks associated with business
and capital alliances with principal business partners, and are subject to risk of market price fluctuation.
Majority of payables included in Notes and accounts payable-trade and Electronically recorded
obligations-operating are due within one year. A certain portion of such liabilities involve foreign currency
denominated transactions associated with the import of raw materials and is subject to exchange rate
fluctuation risk, although it is consistently less than accounts receivable balance denominated in the same
foreign currency. Funds financed by bank loans and corporate bonds are primarily used for capital
expenditure, whose repayment or redemption dates will come within 7 years after March 31, 2016 at the
latest. A certain portion of those liabilities may have variable interest rates and are subject to the risk of
changes in interest rates, although such risk is mitigated using derivative transactions (interest rate swap
transactions).
Derivative transactions include foreign exchange forward contracts to hedge against exchange rate
fluctuations associated with trade accounts receivables and liabilities denominated in foreign currencies, and
interest rate swap contracts to hedge against the risk of change in interest rates on bank loans. With regard to
hedging instruments and hedged items, hedge policy, the method of evaluation of hedge effectiveness and
other related items, please refer to "2-[15] Derivative Financial Instruments and Hedge Activities".
[3] Risk Management System with Regard to Financial Instruments
(a) Credit Risk management (Risks Associated with Business Partner’s Breach of Contract)
The Company and its consolidated subsidiaries have credit control function and regularly monitor the
financial status of key customers with regard to accounts receivables and lease investment assets. In
addition to keeping track of payment due dates and balances of each customer, such credit control
function identifies and mitigates the potential risk of uncollectibility due to deterioration in financial status
or other factors of customers.
(b) Market Risk Management (Risks Associated with Fluctuations in Foreign Exchange and Interest Rates)
With regard to operating assets and liabilities denominated in foreign currencies, as a general rule, the
Company uses foreign exchange forward contracts to hedge against risks of exchange rate fluctuation
on a monthly basis by each currency. Depending on the status of exchange rates, foreign exchange
forward contracts with no longer than six months term are used to hedge against the risk of exchange
rate fluctuation to the extent that net position of accounts receivable and accounts payable dominated in
foreign currency is exposed. In addition, the Company and certain consolidated subsidiaries use interest
rate swap transactions to mitigate the risk of fluctuation in interest rates on bank loans and corporate
bonds.
8
The Company also regularly monitors the market values of investments included in Short-term
investment securities and Investment securities as well as the financial conditions of issuers (business
partner companies), and continuously reviews its investment portfolio taking into consideration its
relationships with respective business partner companies.
Basic policies with regard to derivative transactions are approved by the Executive Management Board.
Finance & Accounting Department engages in derivative transactions in line with the applicable the
Company’s rule. The results of these transactions are reported to the Finance Officer every time the
transactions are conducted.
(c) Liquidity Risk Management (Risk of Becoming Unable to Make Payments by the Due Date)
The Company secures liquidity at a level sufficient to satisfy its current needs with commitment lines
contracted with major banks in combination with keeping cash and cash equivalents balance at a certain
level.
[4] Supplemental Explanation of Items with Regard to Fair Value of Financial Instruments
Fair value of financial instruments includes quoted prices of financial instruments in the market and, in the
event market prices are not available, prices that are calculated based on the underlying assumptions under
the appropriate valuation model. Because the factors incorporated into the valuation model are subject to
change, calculated fair value may differ. The values of derivative transactions contracts stated in "(2) Items
with Regard to Fair Value of Financial Instruments" do not by themselves indicate the market risk associated
with the respective derivative transactions.
9
(2) Items with Regard to Fair Value of Financial Instruments
The consolidated balance sheet amounts, the fair value and difference as of March 31, 2016 and 2015 were
as follows:
The items whose fair values were extremely difficult to measure were not included in the table below (refer
to Note [2] ).
As of March 31, 2016
Cash and deposits
Notes and accounts receivable-trade
Allowance for doubtful accounts (*1)
Lease investment assets
Allowance for doubtful accounts (*1)
Short-term loans receivable
Allowance for doubtful accounts (*1)
Short-term investment securities, Investment securities
and Other securities
Total Assets
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Accrued income taxes
Accrued expenses
Bonds payable
Long-term loans payable
Total Liabilities
Derivative transactions (*2)
hedge accounting is not applied
hedge accounting is applied
Consolidated
balance sheet
amounts
¥507,553
140,319
(105)
140,214
21,532
(53)
21,479
151,973
(294)
151,679
118,565
939,490
326,625
91,476
33,252
33,692
10,000
100,272
132,759
-
93,030
821,106
7,159
¥-
Millions of yen
Fair Value
Difference
¥507,553
140,214
¥-
-
23,095
1,616
155,038
3,359
118,565
944,465
326,625
91,476
33,252
33,807
10,011
100,272
132,759
-
93,673
821,875
7,159
¥-
-
4,975
-
-
-
(115)
(11)
-
-
-
(643)
(769)
-
¥-
10
As of March 31, 2016
Cash and deposits
Notes and accounts receivable-trade
Allowance for doubtful accounts (*1)
Lease investment assets
Allowance for doubtful accounts (*1)
Short-term loans receivable
Allowance for doubtful accounts (*1)
Short-term investment securities, Investment securities
and Other securities
Total Assets
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Accrued income taxes
Accrued expenses
Bonds payable
Long-term loans payable
Total Liabilities
Derivative transactions (*2)
hedge accounting is not applied
hedge accounting is applied
Consolidated
balance sheet
amounts
$4,503,976
1,245,177
(932)
1,244,245
191,073
(470)
190,603
1,375,792
(2,609)
1,345,985
1,052,134
8,336,942
2,898,438
811,749
295,075
298,980
88,739
889,804
1,178,090
-
825,539
7,286,414
Thousands of U.S. dollars
Fair Value
Difference
$4,503,976
1,244,245
$-
-
204,943
14,340
1,375,792
29,807
1,052,134
8,381,090
2,898,438
811,749
295,075
300,000
88,837
889,804
1,178,090
-
831,245
7,293,238
-
44,147
-
-
-
(1,020)
(98)
-
-
-
(5,706)
(6,824)
-
$-
63,528
$-
63,528
$-
*1. Allowance for doubtful accounts corresponding to Notes and accounts receivable-trade, Lease
investment assets and Short-term loans receivable is deducted.
*2. Indicated are the net amounts of assets and liabilities results from derivative transactions, with the
total net liabilities indicated in ( ).
11
As of March 31, 2015
Cash and deposits
Notes and accounts receivable-trade
Allowance for doubtful accounts (*1)
Lease investment assets
Allowance for doubtful accounts (*1)
Short-term loans receivable
Allowance for doubtful accounts (*1)
Short-term investment securities, Investment securities
and Other securities
Total Assets
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Accrued income taxes
Accrued expenses
Bonds payable
Long-term loans payable
Total Liabilities
Derivative transactions (*2)
hedge accounting is not applied
hedge accounting is applied
Consolidated
balance sheet
amounts
¥228,821
164,540
(640)
163,900
24,098
(66)
24,032
157,070
(341)
156,729
118,702
692,184
317,801
74,420
41,443
44,329
-
54,987
126,007
10,000
115,420
784,407
(2,725)
¥-
Millions of yen
Fair Value
Difference
¥228,821
163,900
¥-
-
28,794
4,762
158,313
1,584
118,702
698,530
317,801
74,420
41,443
44,441
-
54,987
126,007
10,059
116,074
785,232
(2,725)
¥-
-
6,346
-
-
-
(112)
-
-
-
(59)
(654)
(825)
-
¥-
*1. Allowance for doubtful accounts corresponding to Notes and accounts receivable-trade, Lease
investment assets and Short-term loans receivable is deducted.
*2. Indicated are the net amounts of assets and liabilities results from derivative transactions, with the
total net liabilities indicated in ( ).
[1] The calculation methods of financial instrument fair value together with securities and derivative
transactions
Assets
Cash and deposits and Notes and accounts receivable-trade
Because these are settled in the short-term, the fair value is mostly the same as the book value and
as such the book value is deemed as fair value.
Lease investment assets and Short-term loans receivable
Fair value is the present value calculated by discounting relevant cash flows by each category of the
assets and timing of cash flow, where discount rates were adopted taking into consideration the
period until maturity and credit risks. In addition, the estimated residual value is included in the
12
balance of Lease investment assets.
Short-term investment securities and investment securities
Fair value is determined by the stock exchange price, while bonds are determined by the stock
exchange price or by quotations received from financial institutions. Please refer to the note entitled
"5.Short-term investment securities and investment securities" regarding to respective objectives for
holding securities.
Liabilities
Notes and accounts payable-trade, Short-term loans payable, Accrued income taxes and Accrued
expenses
Because these are settled in the short-term, the fair value is mostly the same as the book value and
as such the book value is deemed as fair value.
Current portion of long-term loans payable and Long-term loans payable
Fair value is measured based on the present value that is calculated as discounted cash flow of the
total amount of principal and interest, where the interest would be set, if the Company concluded a
brand new loan agreement with the same condition at the date of measurement.
Current portion of bonds and Bonds payable
The fair value of bonds issued by the Company is based on market prices if available. For bonds
with no available market price, fair value is calculated using the present value that is calculated as
discounted cash flow of the total amount of principal and interest by, where discount rates are
adopted taking into consideration the remaining redemption period and credit risks.
Derivative transactions
Fair value of interest rate swap that meets certain hedging criteria is included in the fair value of
long-term debt as a hedged item.
[2] Financial instruments which fair value is extremely difficult to measure
Consolidated balance sheet amount as of March 31, 2016 and 2015:
Other securities (available-for-sale securities)
2016
¥2,817
Millions of yen
2015
¥7,401
Thousands of
U.S. dollars
2016
$24,998
Stocks of non-consolidated subsidiary and affiliated
companies
Certificate of deposit
Commercial paper
Money management fund
Unlisted stocks (excluding over-the-counter stocks)
Medium Term Note
Other
1,330,198
1,535,150
1,199,033
8,661
266,217
$27
These have no available market prices and are expected to entail excessive costs in the estimation of
future cash flows. Consequently, estimating their fair value is recognized as extremely difficult and they
are not included in "Short-term investment securities, Investment securities and Other securities".
140,000
144,982
114,192
1,015
30,000
¥3
149,900
172,996
135,119
976
30,000
¥3
13
[3] Scheduled redemption of monetary assets and securities with maturity
As of March 31, 2016:
Cash and deposits
Notes and accounts receivable-trade
Lease investment assets
Short-term loans receivable
Short-term investment securities, Investment
securities and Other securities
Government and municipal bonds
Corporate bonds
Other
As of March 31, 2016:
Cash and deposits
Notes and accounts receivable-trade
Lease investment assets
Short-term loans receivable
Short-term investment securities, Investment
securities and Other securities
Government and municipal bonds
Corporate bonds
Other
As of March 31, 2015:
Cash and deposits
Notes and accounts receivable-trade
Lease investment assets
Short-term loans receivable
Short-term investment securities, Investment
securities and Other securities
Government and municipal bonds
Corporate bonds
Other
Within 1
Year
¥507,553
130,484
6,555
48,205
1 to 5
Years
¥-
8,142
14,896
101,691
Millions of yen
5 to 10
Years
¥-
1,693
81
2,077
Over 10
years
¥-
-
-
-
8,595
3,440
¥353,419
19,447
19,623
¥1,006
2,585
3,317
¥1,056
4,106
4,299
¥4,189
Within 1
Year
$4,503,976
1,157,902
58,168
427,766
Thousands of U.S. dollars
Over 10
years
$-
-
-
-
5 to 10
Years
$-
15,024
719
18,431
1 to 5
Years
$-
72,251
132,186
902,396
76,271
30,526
$3,136,206
172,571
174,133
$8,927
22,939
29,435
$9,371
36,436
38,149
$37,173
Within 1
Year
¥228,821
158,147
7,002
58,335
11,186
3,930
¥345,429
1 to 5
Years
¥-
6,393
16,864
96,412
14,963
17,001
¥1,571
Millions of yen
Over 10
years
¥-
-
-
-
5 to 10
Years
¥-
-
232
2,323
2,226
2,762
¥829
3,838
2,392
¥4,437
14
[4] Amount of repayment for long-term debt and other interest-bearing debt
As of March 31, 2016:
Short-term loans payable
Bonds payable
Long-term loans payable
As of March 31, 2016:
Short-term loans payable
Bonds payable
Long-term loans payable
As of March 31, 2015:
Short-term loans payable
Bonds payable
Long-term loans payable
Within 1
Year
¥33,252
10,000
¥33,692
1 to 5
Years
-
-
¥90,918
Millions of yen
Over 10
years
¥-
-
¥-
5 to 10
Years
-
-
¥2,112
Within 1
Year
$295,075
88,739
$298,980
1 to 5
Years
$-
-
$806,797
Thousands of U.S. dollars
Over 10
years
$-
-
$-
5 to 10
Years
$-
-
$18,742
Within 1
Year
¥41,443
-
¥44,329
1 to 5
Years
¥-
10,000
¥113,022
Millions of yen
Over 10
years
¥-
-
¥-
5 to 10
Years
¥-
-
¥2,398
6. Short-Term Investment Securities and Investment Securities
Information on the value of short-term investment securities and investment securities as of March 31, 2016
and 2015 was as follows:
(1) Other securities (available-for-sale securities):
As of March 31, 2016:
Book value exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Sub-total
Book value not exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Sub-total
Total
Book value
Acquisition cost
Millions of yen
Difference
¥39,363
¥22,386
¥16,977
28,450
21,151
5,307
94,271
7,020
6,282
9,527
-
1,465
24,294
¥118,565
15
28,019
20,835
5,229
76,469
8,100
6,336
9,670
-
1,504
25,610
¥102,079
431
316
78
17,802
(1,080)
(54)
(143)
-
(39)
(1,316)
¥16,486
As of March 31, 2016:
Book value exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Sub-total
Book value not exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Sub-total
Total
As of March 31, 2015:
Book value exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Sub-total
Book value not exceeding acquisition cost:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Sub-total
Total
Book value
Acquisition cost
Difference
Thousands of U.S. dollars
$349,303
$198,651
$150,652
252,463
187,692
47,094
836,552
248,638
184,888
46,402
678,578
3,825
2,804
692
157,973
62,295
71,879
(9,584)
55,746
84,542
-
13,000
215,583
$1,052,134
56,225
85,811
-
13,346
227,261
$905,839
(479)
(1,269)
-
(346)
(11,678)
$146,295
Book value
Acquisition cost
Millions of yen
Difference
¥50,341
¥24,170
¥26,171
20,471
21,067
6,013
71,721
2,918
11,479
4,768
-
1,165
20,330
¥92,051
331
299
126
26,927
(140)
(68)
(49)
-
(19)
(276)
¥26,651
20,802
21,366
6,139
98,648
2,778
11,411
4,719
-
1,146
20,054
¥118,702
16
(2) Other securities (available-for-sale securities) sold during fiscal years 2016 and 2015:
For the year ended March 31, 2016:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total
For the year ended March 31, 2016:
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total
For the year ended March 31, 2015:
Sales amount
Total gains
Total losses
Millions of yen
¥4,190
¥2,571
27,456
38,575
2,051
-
¥72,272
115
43
3
-
¥2,732
¥99
143
43
17
-
¥302
Sales amount
Total gains
Total losses
Thousands of U.S. dollars
$37,182
$22,815
243,642
342,311
18,200
-
$641,335
1,020
382
27
-
$24,243
$879
1,269
382
151
-
$2,680
Sales amount
Total gains
Total losses
Millions of yen
Equity securities
Debt securities
Government and municipal bonds
Corporate bonds
Other
Other
Total
¥3,300
¥741
32,673
6,626
1,529
119
¥44,247
190
116
5
-
¥1,052
¥12
50
17
20
-
¥99
17
7. Short-Term Loans Payable and Long-Term Debts
Short-term loans payable as of March 31, 2016 and 2015, consisted of the following:
Millions of yen
2015
Thousands of
U.S. dollars
2016
2016
Bank loans with average interest rate of 1.48% and 1.49%
per annum as of March 31, 2016 and 2015, respectively
¥33,252
¥41,443
$295,075
Unsecured 0.71% bonds due June 13, 2016
¥10,000
-
$88,739
Long-term debts as of March 31, 2016 and 2015 consisted of the following:
Loans principally from banks and insurance companies due
through 2025 with average interest rate of 0.7% and 0.82%
per annum as of March 31, 2016 and 2015, respectively
Unsecured 0.71% bonds due June 13, 2016
Subtotal
Less-Portion due within one year
Millions of yen
2015
Thousands of
U.S. dollars
2016
2016
¥126,722
¥159,749
$1,124,519
-
126,722
(33,692)
10,000
169,749
(44,329)
-
1,124,519
(298,979)
Total
¥93,030
¥125,420
$825,539
Annual maturities of long-term loans payable and bonds payable as of March 31, 2016 were as follows:
2017
2018
2019
2020
2021
2022 and thereafter
Total
Millions of yen
¥33,692
42,856
41,228
6,312
522
2,112
¥126,722
Thousands of
U.S. dollars
$298,980
380,300
365,853
56,012
4,632
18,742
$1,124,519
18
Lease obligations as of March 31, 2016 and 2015 consisted of the following:
Lease obligations due within one year as of March 31, 2016
Lease obligations due after one year as of March 31, 2016
Total
Millions of yen
2015
¥1,016
1,065
¥2,081
2016
¥861
1,254
¥2,115
Thousands
of
U.S.dollars
2016
$7,640
11,128
$18,768
Annual maturities of lease obligations as of March 31, 2016 were as follows:
2017
2018
2019
2020
2021
2022 and thereafter
Total
Millions of yen
¥861
1077
85
48
31
13
¥2,115
Thousands of
U.S. dollars
$7,640
9,557
754
426
275
115
$18,768
The following assets as of March 31, 2016 and 2015 were pledged as collateral for certain loans:
Property, plant and equipment
Total
Millions of yen
2015
¥35,435
¥35,435
Thousands of
U.S. dollars
2016
$326,551
$326,551
2016
¥36,799
¥36,799
To raise working capital efficiently, the FHI Group has entered into the commitment-line contracts. The
maximum amount that can be made available under these contracts is ¥125,904 million (US$1,117,260
thousand) as of March 31, 2016. At the end of the fiscal year under review, there were no borrowings under
the commitment line.
19
8. Derivative transactions
In the normal course of business, the Company and its consolidated subsidiaries employ derivative financial
instruments, including foreign exchange forward contracts, foreign currency options and interest rate swaps,
to manage their exposures to fluctuations in foreign currency exchange rates and interest rates. The
Company and its consolidated subsidiaries do not use derivatives for speculative or trading purposes.
The fair value information of derivative financial instruments as of March 31, 2016 and 2015 was as follows:
Derivative transactions to which hedge accounting is not applied
(1) Foreign currency contracts:
As of March 31, 2016
Notional
Amount
Millions of yen
Valuation
gain (loss)
Fair value
Thousands of U.S. dollars
Valuation
Fair value gain (loss)
Notional
Amount
Foreign exchange
forward contracts:
Sell-
U.S. dollar
Euro
Canadian dollar
As of March 31, 2015
¥287,156
3,254
22,516
¥7,975
(44)
(772)
¥7,975 $2,548,194
28,876
199,805
(44)
(772)
$70,769
(390)
(6,851)
$70,769
(390)
(6,851)
Foreign exchange forward contracts:
Sell-
U.S. dollar
Euro
Canadian dollar
Notional
Amount
Fair value
Millions of yen
Valuation
gain (loss)
¥313,502
4,488
23,102
(¥2,955)
55
175
(¥2,955)
55
175
Note: The method to determine the fair value is based on quotations obtained from financial institutions.
Derivative transactions to which hedge accounting is applied
(1) Interest rate contracts:
Accounting treatment: Exception processing of interest rate swap
Hedge item: Long-term loans payable
As of March 31, 2016
Interest rate swap
contracts:
Receive floating rate
pay fixed rate
Millions of yen
Thousands of U.S. dollars
Notional
Amount
Over
1 year
Fair value
Notional
Amount
Over
1 year
Fair value
¥3,000
¥1,000
¥-
$26,622
$8,874
$-
20
As of March 31, 2015
Interest rate swap contracts:
Receive floating rate pay fixed rate
Millions of yen
Notional
Amount
Over
1 year
Fair value
¥10,105
¥3,000
(*)
Note *Fair value of interest rate swap that meets certain hedging criteria is included in the fair value of
long-term debt as a hedged item.
9. Property, Plant and Equipment
Property, plant and equipment as of March 31, 2016 and 2015 are summarized as follows:
Buildings and structures
Machinery, equipment and vehicles
Vehicles and equipment on operating leases, net
Other
Subtotal
Accumulated depreciation
Accumulated impairment loss
Land
Construction in progress
Total
2016
¥381,255
540,376
11,221
312,028
1,244,880
(886,905)
(25,992)
193,698
46,951
¥572,632
Millions of yen
2015
¥348,685
526,302
13,181
318,806
1,206,974
(882,752)
(26,528)
188,392
28,611
¥514,697
Thousands of
U.S. dollars
2016
$3,383,219
4,795,244
99,574
2,768,906
11,046,943
(7,870,308)
(230,650)
1,718,857
416,639
$5,081,480
10. Unexecuted Balance of Overdraft Facilities and Lending Commitments
The unexecuted balance of overdraft facilities and lending commitments at a consolidated subsidiary (Subaru
Finance Co., Ltd.) as of March 31, 2016 and 2015 was as follows:
Total overdraft facilities and lending commitments
Less amounts currently executed
Unexecuted balance
Millions of yen
2015
¥4,800
497
¥4,303
Thousands of
U.S. dollars
2016
$42,595
7,108
$35,487
2016
¥4,800
801
¥3,999
A portion of the overdraft facilities and lending commitments above is subject to credit considerations as
documented in the customer contracts. Therefore, the total balance above is not always available.
21
11. Pension and Severance Plans
The Company and its consolidated domestic subsidiaries have lump-sum retirement payment plans,
contributory defined benefit employees’ welfare pension funds, defined benefit pension plan, and certain
domestic subsidiaries have defined contribution pension plans. In addition, in certain occasions, additional
retirement payments are made to employees for their retirement. Consolidated foreign subsidiaries primarily
have defined contribution plans.
As of March 31, 2016, the Company and 53 of its consolidated domestic subsidiaries, which add up to a
total of 54 companies, have lump-sum retirement payment plans. Within the FHI Group, there are also 24
defined contribution plans, and 5 defined benefits pension plans. In addition, there are 5 single-employer
employees’ welfare pension funds subject to the provisions of Article 33 of "Accounting Standard for
Retirement Benefits."
Certain insignificant consolidated subsidiaries calculated their pension liability using the simplified method.
Under the simplified method, an accrued pension and net defined benefit liability is provided at the amount
that would have been payable had all the employees voluntarily retired at the end of the fiscal year, less an
amount to be covered from the plan assets, while the Company and significant subsidiaries provide an
accrued pension and net defined benefit liability based on the estimated amount of pension and severance
obligation (projected benefit obligations), less the fair value of plan assets at the end of the fiscal year under
the actuarial method.
Defined benefit pension plans (including the multi-employer pension plan of contributory defined benefit
employees’ welfare pension funds settled as defined benefit pension plan.)
Movement in retirement benefit obligation, except plans applied simplified method
Balance at the beginning of the period
Cumulative effects of
changes in accounting policies
Restated balance
a. Service cost
b. Interest cost
c. Actuarial loss (gain)
d. Benefits paid
e. Amortization of prior service cost
f. Other
Balance at the end of the period
2016
¥107,397
-
107,397
6,115
1,161
7,769
(5,791)
152
(472)
¥116,331
Movements in plan assets, except plans applied simplified method
Balance at the beginning of the period
a. Expected return on plan assets
b. Actuarial loss (gain)
c. Contributions paid by the employer
d. Benefits paid
Balance at the end of the period
2016
¥99,140
1,836
4,254
4,288
(3,601)
¥105,917
22
Millions of yen
2015
¥102,819
(2,481)
100,338
5,508
1,397
4,520
(4,366)
-
-
¥107,397
Millions of yen
2015
¥87,069
1,913
4,961
8,330
(3,133)
¥99,140
Thousands of
U.S. dollars
2016
$953,030
-
953,030
54,264
10,303
68,941
(51,389)
(1,349)
4,188
$1,032,310
Thousands of
U.S. dollars
2016
$879,759
16,292
37,750
38,051
(31,955)
$939,897
Movement in net defined benefit liability in the plans applying the simplified method
Balance at the beginning of the period
a. Increase due to the change of scope of
consolidation
b. Retirement benefit cost
c. Benefits paid
d. Contributions paid by the employer
Balance at the end of the period
2016
¥6,072
-
722
(357)
(39)
¥6,398
Millions of yen
2015
¥5,880
-
730
(482)
(29)
¥6,072
Thousands of
U.S. dollars
2016
$53,882
-
6,407
(3,168)
(346)
$56,775
Reconciliation from retirement benefit obligations and plan assets to net defined benefit liability (asset),
include plans applied simplified method
a. Funded retirement benefit obligations
b. Plan assets
Sub total
c. Unfunded retirement benefit
obligations
a+b+c. Total Net liability (asset) for
retirement benefits
d. Net defined benefit liability
e. Net defined benefit asset
d+e. Total Net liability (asset) for
retirement benefits
Retirement benefit costs
a. Service cost
b. Interest cost
c. Expected return on plan assets
d. Net actuarial loss amortization
e. Past service costs amortization
f. Additional retirement payments
g. Retirement benefit cost of the plan
applying the simplified method
h. Other
Total retirement benefit costs for the fiscal
year ended
2016
¥106,762
(106,162)
600
16,212
Millions of yen
2015
¥97,944
(99,346)
(1,402)
15,706
Thousands of
U.S. dollars
2016
$947,396
(942,071)
5,324
143,864
16,812
14,304
149,188
18,586
(1,774)
¥16,812
17,963
(3,659)
¥14,304
164,930
(15,742)
$149,188
Millions of yen
2015
¥5,508
1,397
(1,913)
2,377
58
379
703
Thousands of
U.S. dollars
2016
¥54,264
10,303
(16,292)
20,818
532
1,908
6,407
-
¥8,509
195
$78,135
2016
¥6,115
1,161
(1,836)
2,346
60
215
722
22
¥8,805
23
Adjustments for retirement benefit (before tax effect)
a. Past service costs
b. Actuarial gains and losses
Total
2016
(¥92)
(1,150)
(¥1,242)
Millions of yen
2015
¥249
4,032
¥4,281
Accumulated adjustments for retirement benefit (before tax effect)
Thousands of
U.S. dollars
2016
$816
(10,205)
(¥11,021)
Thousands of
U.S. dollars
2016
$2,183
2016
¥246
Millions of yen
2015
¥154
17,963
16,813
159,402
¥18,209
¥16,967
$161,585
2016
49%
13%
28%
10%
100%
Percentage
2015
51%
14%
25%
10%
100%
a. Past service costs that are yet to be
recognized
b. Actuarial gains and losses that are yet
to be recognized
Total
Plan assets
Plan assets comprise:
a.Bonds
b.Equity securities
c.Cash and deposit
d.Other
Total
Long-term expected rate of return
Current and target asset allocations, historical and expected returns on various categories of plan assets have
been considered in determining the long-term expected rate of return.
Actuarial assumptions
The principal actuarial assumptions
2016
2015
a. Attribution of expected benefit obligation Benefit formula method
b. Discount rate
c. Long-term expected rate of return
d. Amortization of actuarial gain/loss
Primarily 0.6%
Primarily 2.1%
Primarily 16 years (amortized
by the straight-line method
starting from the following
fiscal year, over a period
shorter than the average
remaining service periods of
the eligible employees)
10 to 19 years
Benefit formula method
0.8%–1.4%
1.4%–3.5%
Primarily 16 years (amortized
by the straight-line method
starting from the following
fiscal year, over a period
shorter than the average
remaining service periods of
the eligible employees)
10 to 19 years
e. Amortization of past service cost
24
Defined contribution pension plan
The amount required to contibute to defined contribution plans was 4,844 million (US$42,953 thousand) and
4,414milllion for fiscal years 2016 and 2015 respectively which included the multi-employer pension plan of
contributory defined benefit employees’ welfare pension funds settled as defined contribution plans.
Certain information concerning the multi-employer pension plan, which requires contributions that are
expensed as they become due as pension and severance costs, was as follows:
(1) Overall funded status of the multi-employer pension plan (mainly as of March 31, 2016 and 2015)
Plan assets
Projected benefit obligation
Funded status
2016
¥49,530
58,015
(¥8,485)
Millions of yen
2015
¥83,089
94,207
(¥11,118)
Thousands of
U.S. dollars
2016
$439,524
514,819
($75,295)
(2) Contributions by the Company and its consolidated domestic subsidiaries as a percentage of total
contributions to the multi-employer pension plan for fiscal years 2016 and 2015 respectively: 6%
Other than the above, ¥26,943 million (US$239,090 thousand) and ¥27,203 million of postretirement benefit
plan obligation for fiscal years 2016 and 2015 respectively is included in "Other" of accrued expense and
long-term liabilities in some American subsidiaries.
12. Income Taxes
The Company and its consolidated subsidiaries were subject to a number of taxes based on income, which in
the aggregate resulted in a normal statutory income tax rate of approximately 32.9% and 35.4% for fiscal
years 2016 and 2015, respectively.
A reconciliation of the statutory income tax rates in Japan to the Company’s effective income tax rates for
fiscal years 2016 and 2015 were as follows:
Statutory income tax rate in Japan
Increase (reduction) in taxes resulting from:
Adjustment of deferred tax assets in the end of fiscal year 2016 by change of the tax rate
Deduction of research and development expense
Entertainment expenses not qualifying for deduction
Changes in valuation allowance and tax benefits realized from loss carry forwards
Adjustment to past corporate income taxes payable and corporate income taxes refundable
Equity in earnings of affiliates
Difference of applicable tax rate in subsidiaries
Other
Effective income tax rate
2016
32.9%
2015
35.4%
0.5%
(3.1)%
0.1%
(1.7)%
0.0%
0.0%
0.6%
0.2%
29.5%
0.7%
(3.6)%
0.1%
(0.5)%
0.2%
0.1%
(0.3)%
0.3%
32.4%
25
Significant components of the deferred tax assets and liabilities as of March 31, 2016 and 2015, were as
follows:
Deferred tax assets:
Accrued expenses
Provision for product warranties
Net defined benefit liability
Depreciation and amortization expenses
Long-term accounts payable-other
Provision for bonuses
Unrealized profit on inventories
Loss on valuation of inventories
Net operating loss carryforwards
Other
Total deferred tax assets
Valuation allowance
Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Valuation difference on available-for-sale securities
Depreciation and amortization expenses
Reserve for reduction entry
Net defined benefit asset
Other
Total deferred tax liabilities
Net deferred tax assets
Millions of yen
2015
Thousands of
U.S. dollars
2016
¥18,569
17,549
13,534
10,938
10,919
7,241
25,954
2,079
860
31,253
138,896
(20,018)
118,878
(8,668)
(11,246)
(2,072)
(1,006)
(17,980)
(40,972)
¥77,906
$252,258
153,731
125,770
93,655
94,001
66,164
216,976
28,663
-
222,637
1,253,856
(77,327)
1,176,529
(37,980)
(125,717)
(16,523)
(8,572)
(202,724)
(391,517)
$785,012
2016
¥28,427
17,324
14,173
10,554
10,593
7,456
24,451
3,230
-
25,089
141,297
(8,714)
132,583
(4,280)
(14,167)
(1,862)
(966)
(22,845)
(44,120)
¥88,463
The net deferred tax assets are included in the following line items in the accompanying consolidated balance
sheets.
Current assets—Deferred tax assets
Investments and other assets—Deferred tax assets
Current liabilities—Deferred tax liabilities
(Other current liabilities)
Long-term liabilities—Deferred tax liabilities
Total net deferred tax assets
Millions of yen
2015
¥78,789
13,113
Thousands of
U.S. dollars
2016
$806,576
144,991
-
(13,996)
¥77,906
-
(166,554)
$785,012
2016
¥90,893
16,339
-
(18,769)
¥88,463
26
(Adjustment of deferred tax assets and liabilities for enacted changes in tax laws and rates)
(Fiscal 2015)
On March 31, 2015, amendments to the Japanese tax regulations were enacted into law. Based on the
amendments, the statutory income tax rates utilized for the measurement of deferred tax assets and liabilities
expected to be settled or realized from April 1, 2015 to March 31, 2016 and on or after April 1, 2016 are
changed from 35.4% for the fiscal year ended March 31, 2015 to 32.9% and 32.1%, respectively, as of March
31, 2015.
Due to these changes in statutory income tax rates, net deferred tax assets (after deducting the deferred tax
liabilities) decreased by ¥2,375 million (US$19,747 thousand) as of March 31, 2015, deferred income tax
expense recognized for the fiscal year ended March 31, 2015 increased by ¥2,826 million (US$23,497
thousand), evaluation differences of other securities increased by ¥765 million (US$6,361 thousand) and
accumulated adjustments for employee retirement benefits increased by ¥529 million (US$4,398 thousand).
(Fiscal 2016)
On March 29 2016, amendments to the Japanese tax regulations were enacted into law. Based on the
amendments, the statutory income tax rates utilized for the measurement of deferred tax assets and liabilities
expected to be settled or realized from April 1, 2016 to March 31, 2017 and on or after April 1, 2017 are
changed from 32.1% for the fiscal year ended March 31, 2016 to 30.7% and 30.5%, respectively, as of March
31, 2016.
Due to these changes in statutory income tax rates, net deferred tax assets (after deducting the deferred tax
liabilities) decreased by ¥2,983 million (US$26,471 thousand) as of March 31, 2016, deferred income tax
expense recognized for the fiscal year ended March 31, 2016 increased by ¥2,916 million (US$25,876
thousand), evaluation differences of other securities increased by ¥224 million (US$1,988 thousand) and
accumulated adjustments for employee retirement benefits increased by ¥291 million (US$2,582 thousand)
13. Net Assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as
common stock. However, a company may, by a resolution of its Board of Directors, designate an amount not
exceeding one half of the price of the new shares as additional paid-in capital, which is included in capital
surplus.
Under the Japanese Companies Act (“the Act”), in cases where a dividend distribution of surplus is made,
the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% of common stock over the
total of additional paid-in capital and legal earnings reserve must be set aside as additional paid-in capital or
legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
Under the Act, both legal earnings reserve and additional paid-in capital used to eliminate or reduce a
deficit generally require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Act, all
additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and
retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the
non-consolidated financial statements of the Company in accordance with the Act.
At the annual shareholders’ meeting held on June 28, 2016, the shareholders approved cash dividends
amounting to ¥56,216 million (US$498,855 thousand). Such appropriations have not been accrued in the
consolidated financial statements as of March 31, 2016. Such appropriations are recognized in the period in
which they are approved by the shareholders.
27
14. Presentation of inventories and provision for loss on construction contracts
¥Minus 644 million (US$ Minus 5,715 thousand) and ¥ 988million as "Provision for loss on construction
contracts" is included in "Cost of sales" for fiscal years 2016 and 2015, respectively.
15. Selling, General and Administrative Expenses
Selling, general and administrative expenses for fiscal years 2016 and 2015 consisted of the following:
Freightage and packing expenses
Advertising expenses
Sales incentives
Salaries and bonuses
Research and development expenses
Other
Total
2016
¥27,023
87,666
98,505
54,008
101,499
110,832
¥479,533
Millions of yen
2015
¥34,856
81,538
82,597
49,894
83,104
105,389
¥437,378
Thousands of
U.S. dollars
2016
$239,799
777,939
874,124
479,262
900,692
983,512
$4,255,329
16. Extraordinary income
(Fiscal 2016)
Reversal of allowance for doubtful accounts
Reversal of allowance for doubtful account includes ¥29,624 million (US$262,880 thousands) of the
allowance for receivables of the initial investment fees associated with the AH-64D combat
helicopter for the Japan Ministry of Defense was released because the lawsuit against the
Government of Japan over the claims of the initial investment fees was concluded.
Other extraordinary income
Other extraordinary income includes 18,561 million yen (US$164,708 thousand) of interest
receivable recognized due to the conclusion of the lawsuit against the Government of Japan
over the claims of the initial investment fees associated with the AH-64D combat helicopter
for the Japan Ministry of Defense.
17. Finance Leases
As allowed under the Japanese accounting standards, the Company and its consolidated subsidiaries in
Japan account for finance leases.
Information as Lessor
(1) The details of lease investment assets as of March 31, 2016 and 2015 were as follows:
Obligation of lease fee receivable
Estimated residual value
Interest expense portion
Lease investment assets
Millions of yen
2015
¥28,762
342
(5,006)
¥24,098
Thousands of
U.S. dollars
2016
$228,201
3,221
(40,350)
$191,073
2016
¥25,716
363
(4,547)
¥21,532
(2) Lease revenue related to lease investment assets
Amounts of collections on lease receivable after the fiscal year ended March 31, 2016 and 2015, were as
28
follows:
Within 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
Over 5 years
Millions of yen
2015
¥8,399
7,065
5,949
4,273
2,793
¥283
Thousands of
U.S. dollars
2016
$69,909
60,378
47,688
32,878
16,426
$923
2016
¥7,878
6,804
5,374
3,705
1,851
¥104
29
18. Operating Lease
Information as Lessee
The future minimum lease/rent payments, excluding the portion of interest thereon, as of March 31, 2016 and
2015, were as follows:
Operating leases:
Due within one year
Due after one year
Total
Millions of yen
2015
Thousands of
U.S. dollars
2016
¥2,439
14,030
¥16,469
$26,063
182,536
$208,599
2016
¥2,937
20,570
¥23,507
Information as Lessor
The future minimum lease/rent payments receivable, excluding the portion of interest thereon, as of March 31,
2016 and 2015, were as follows:
Operating leases:
Due within one year
Due after one year
Total
19. Contingent Liabilities
Contingent liabilities as of March 31, 2016 and 2015, were as follows:
Millions of yen
2015
Thousands of
U.S. dollars
2016
¥190
92
¥282
$1,402
657
$2,059
2016
¥158
74
¥232
Thousands of
Millions of yen U.S. dollars
2016
2015
2016
As guarantor of third-party indebtedness from financial
institutions
¥44,059
¥45,214
$390,975
Expenses with regard to the modified agreement contents between the U.S. subsidiary of Takata Co., Ltd.
and NHTSA (The National Highway Traffic and Safety Administration of the United States) dated May 4, 2016,
Notification “Extended schedule of the recalls of airbag inflators manufactured by Takata Co., Ltd.” released
by MLIT (The Ministry of Land, Infrastructure, Transport and Tourism of Japan) dated May 27, 2016, and
recalls in the other regions including China and Australia required by the U.S. and Japanese authorities are
not accrued in the consolidated financial statements for the fiscal year ended March 31, 2016, since the
amounts of these expenses can not be estimated reasonably at present.
Expenses with regard to recall of airbag inflators manufactured by Takata Co., Ltd. which can be reasonably
estimated were accrued in the consolidated financial statements for the fiscal year ended March 31, 2016.
FHI group notified the regulators to take corresponding actions in North American Market on May 25, 2016
and decided to do it in Japan and the other regions including China and Australia by the end of June 2016,
that cover a part of contingent liabilities mentioned above. See Note24 “Subsequent events” for more detail.
20. The Amount of Discount of Export Bill
30
The amount of discount of export bill as of March 31, 2016 and 2015, were as follows:
The amount of discount of export bill
Thousands of
Millions of yen U.S. dollars
2016
2015
2016
¥1,718
¥2,928
$15,245
21. Transfer of Financial Assets to Special Purpose Company
The balance of financial assets transferred to special purpose company as of March 31, 2016 and 2015, were
as follows:
Balance of financial assets transferred to special purpose
company(loan receivable of Automobiles and accounts
receivable-trade of Aerospace)
Thousands of
Millions of yen U.S. dollars
2016
2015
2016
¥4,508
¥5,037
$40,004
22. Segment Information
(1)General information about reportable segments
The business segments the Company reports are the business units for which the Company is able to obtain
respective financial information separately in order for the Board of Directors to conduct periodic investigation to
determine distribution of management resources and evaluate their business result.
The Company places Automobile at the center of the whole businesses, and introduces an internal company
system into Aerospace and Industrial products divisions. This framework makes clearer the responsibility of each
division and accelerates business execution. The Company manages the subsidiaries on the basis of this
classification. Therefore, the business segments consist of Automobile, Aerospace, Industrial products, and Other
which does not belong to any division.
Automobile segment manufactures and sells vehicles and related products. Aerospace segment manufactures
aircrafts, parts of space-related devices. Industrial products segment manufactures and sells Robin engines and
related products.
(2)Calculation method of sales, profit or loss, assets, liabilities and other items by reportable segments
Accounting method for reportable segments is almost the same as "2. Summary of Significant
Accounting Policies".
Segment income are calculated based on operating income.
Net sales - Inter-segment are calculated based on current market prices.
31
(3)Information on sales, income, assets and other items by reportable segments for the fiscal years ended
March 31, 2016 and 2015 was summarized as follows
Net Sales:
Automobiles
Outside customers
Inter-segment
Sub-total
Aerospace
Outside customers
Inter-segment
Sub-total
Industrial products
Outside customers
Inter-segment
Sub-total
Other (*1)
Outside customers
Inter-segment
Sub-total
Total
Adjustment (*2)
Consolidated total (*3)
Segment income:
Automobiles
Aerospace
Industrial products
Other (*1)
Total
Adjustment (*2)
Consolidated total (*3)
Millions of yen
2015
2016
Thousands of
U.S. dollars
2016
¥3,039,424
4,752
3,044,176
¥2,698,974
4,236
2,703,210
$26,971,550
42,169
27,013,719
152,786
-
152,786
32,570
185
32,755
7,478
17,889
25,367
3,255,084
(22,826)
¥3,232,258
142,801
-
142,801
29,029
207
29,236
7,109
15,744
22,853
2,898,100
(20,187)
¥2,877,913
Millions of yen
2015
2016
¥543,609
18,201
82
2,894
564,786
803
¥565,589
¥400,874
18,912
779
1,884
422,449
596
¥423,045
1,355,808
-
1,355,808
289,023
1642
290,665
66,359
158,745
225,104
28,885,296
(202,556)
$28,682,740
Thousands of
U.S. dollars
2016
$4,823,933
161,514
728
25,681
5,011,856
7,126
$5,018,981
32
Segment assets:
Automobiles
Aerospace
Industrial products
Other (*1)
Total
Adjustment (*2)
Consolidated total (*3)
Other Items:
Depreciation and amortization:
Automobiles
Aerospace
Industrial products
Other (*1)
Total
Adjustment (*2)
Consolidated total (*3)
Investment to equity-method affiliates:
Automobiles
Aerospace
Industrial products
Other (*1)
Total
Adjustment (*2)
Consolidated total (*3)
Increase of property, plant and equipment and
intangible fixed assets:
Automobiles
Aerospace
Industrial products
Other (*1)
Total
Adjustment (*2)
Consolidated total (*3)
Millions of yen
2015
2016
¥2,298,942
220,786
35,961
61,445
2,617,134
(24,724)
¥2,592,410
¥1,944,178
186,292
32,926
59,735
2,223,131
(23,417)
¥2,199,714
Millions of yen
2015
2016
Thousands of
U.S. dollars
2016
$20,400,586
1,959,233
319,114
545,257
23,224,190
(219,398)
$23,004,792
Thousands of
U.S. dollars
2016
$596,584
32,549
4,499
13,613
647,245
-
$647,245
$6,309
-
6,815
-
13,125
-
$13,125
¥65,342
4,583
429
1,467
71,821
-
¥71,821
¥589
-
775
-
1,364
-
¥1,364
¥122,689
4,509
985
7,163
135,346
-
¥135,346
$1,420,250
61,248
6,442
5,875
1,493,815
-
$1,493,815
¥67,229
3,668
507
1,534
72,938
-
¥72,938
¥711
-
768
-
1,479
-
¥1,479
¥160,048
6,902
726
662
168,338
-
¥168,338
Note: *1. "Other" means the category which is not included into any reportable segments. It consists of
garbage collection vehicles, specialized vehicles, real estate lease, etc.
*2. Adjustment of segment income refers to elimination of intersegment transaction.
*3.Segment income is adjusted on operating income on the consolidated statements of income.
33
Related Information
(1)Products and services information
Products and services information is not shown since the same information is in the segment information.
(2)Information about geographic areas
[1]Sales for the fiscal years ended March 31, 2016 and 2015 was summarized as follows:
Sales: (*1)
Japan
North America
[United States] (*2)
Europe
Asia
Other
Consolidated total
Millions of yen
2015
2016
¥605,401
2,104,498
[1,972,797]
126,201
237,297
158,861
¥3,232,258
¥652,894
1,730,947
[1,607,897]
123,250
238,749
132,073
¥2,877,913
Thousands of
U.S. dollars
2016
$5,372,269
18,675,109
[17,506,407]
1,119,895
2,105,750
1,409,717
$28,682,740
Note: *1 Sales is categorized by country or area which is based on customer location.
*2 Sales of the United States is included in North America area.
[2]Property, plant and equipment for the fiscal years ended March 31, 2016 and 2015 was summarized as
follows:
Property, plant and equipment: (*1)
Japan
North America
[United States] (*2)
Europe
Asia
Other
Consolidated total
Millions of yen
2015
2016
Thousands of
U.S. dollars
2016
¥440,019
131,654
[130,978]
462
-
498
¥572,633
¥412,623
101,042
[100,274]
481
-
551
¥514,697
$3,904,685
1,168,285
[1,162,286]
4,100
-
4,419
$5,081,489
Note: *1 Property, plant and equipment is categorized by country or area according to geographic adjacent
level.
*2 Property, plant and equipment of the United States is included in North America area.
[3]Major customers Information
Information about major customers is not shown because outside sales for major customers accounted for
less 10% of operating revenue on the consolidated statements of income for the fiscal years ended March 31,
2016 and 2015.
34
Information on Impairment Loss in Fixed Assets by Reportable segments
Impairment loss in fixed assets by reportable segments for the fiscal years ended March 31, 2016 and 2015
was summarized as follows:
Impairment loss in fixed assets:
Automobiles
Aerospace
Industrial products
Other
Total
Adjustment
Total
Millions of yen
2015
2016
Thousands of
U.S. dollars
2016
¥11
-
-
11
-
-
¥11
¥38
-
-
-
38
-
¥38
$98
-
-
98
-
-
$98
Information on Amortization of Goodwill and Unamortized Balance by Reportable segments
Information on amortization of goodwill and unamortized balance by reportable segments for the fiscal years
ended March 31, 2016 and 2015 was summarized as follows:
Goodwill
Millions of yen
2015
Thousands of
U.S. dollars
2016
¥266
-
-
-
266
-
¥266
¥2,472
-
-
-
2,472
-
¥2,472
$2,139
-
-
2,139
-
-
$2,139
$18,546
-
-
18,546
-
-
$18,546
2016
¥241
-
-
241
-
-
¥241
¥2,090
-
-
2,090
-
-
¥2,090
Amount written off of current period:
Automobiles
Aerospace
Industrial products
Other
Total
Corporate and elimination
Total
Balance at the end of current period:
Automobiles
Aerospace
Industrial products
Other
Total
Corporate and elimination
Total
Information on Negative Goodwill by Reportable segments
No items to be reported.
35
23. Fair Value of Investment and Rental Property
The Company and certain consolidated subsidiaries own rental office buildings and rental commercial
facilities with the objective of generating rental income in Saitama prefecture and other locations. Certain
domestic rental office buildings in Japan are classified as properties that include portions used as investment
and rental property, because part of them are used by the Company and certain consolidated subsidiaries.
The consolidated balance sheet amounts, principal changes during fiscal 2016 and 2015, fair value at the
end of fiscal 2016 and 2015 were as follows:
As of March 31, 2016
beginning
balance
Consolidated balance sheet amounts
Increase(dec
rease) during
the year
ending
balance
Millions of yen
Fair value as
the end of the
fiscal year
Investment and rental property
Properties that include portions used as
investment and rental property
As of March 31, 2016
¥29,248
(¥5)
¥29,243
¥40,173
¥15,228
(¥733)
¥14,495
¥22,775
Thousands of U.S. dollars
beginning
balance
Consolidated balance sheet amounts
Increase(dec
rease) during
the year
ending
balance
Fair value as
the end of the
fiscal year
Investment and rental property
Properties that include portions used as
investment and rental property
As of March 31, 2015
$259,544
($44)
$259,500
$356,491
$135,132
($6,505)
$128,627
$202,103
beginning
balance
Consolidated balance sheet amounts
Increase(dec
rease) during
the year
ending
balance
Millions of yen
Fair value as
the end of the
fiscal year
Investment and rental property
Properties that include portions used as
investment and rental property
¥30,343
(¥1,095)
¥29,248
¥37,704
¥9,206
¥6,022
¥15,228
¥19,537
Note 1. The amounts of consolidated balance sheet excludes accumulated depreciation and accumulated
impairment loss from acquisition costs.
2. Among changes in the amount of investment, rental property and properties that include portions
used as investment and rental property during the fiscal 2016, principal increases were properties
acquisitions etc, which amounted to ¥622 million (US$5,520 thousand), and principal decreases were
depreciation, which amounted to ¥1,264 million (US$11,217 thousand), loss on sales and retirement,
which amounted to ¥265 million (US$2,352 thousand).
Among changes in the amount of investment, rental property and properties that include portions
used as investment and rental property during the fiscal 2015, principal increases were properties
acquisitions etc, which amounted to ¥7,263 million, and principal decreases were depreciation, which
amounted to ¥1,009 million, loss on sales and retirement, which amounted to ¥1,408 million.
36
3. Fair value of a part of main investment and rental property is the amount estimated by based value of
real-estate appraiser, and fair value of a part of other investment and rental property is the amount
estimated by the Company based principally on land assessment value.
Profit and loss in fiscal 2016 and 2015 concerning investment and rental property and properties that include
portions used as investment and rental property were as follows:
As of March 31, 2016
Investment and rental property
Properties that include portions used as
investment and rental property
As of March 31, 2016
Investment and rental property
Properties that include portions used as
investment and rental property
As of March 31, 2015
Investment and rental property
Properties that include portions used as
investment and rental property
Rental
income
Rental
expenses
Change
Millions of yen
Other profit
and loss
¥3,862
¥2,344
¥1,518
(¥262)
¥855
¥1,077
(¥222)
¥-
Thousands of U.S. dollars
Rental
income
Rental
expenses
Change
Other profit
and loss
$34,271
$20,800
$13,471
($2,325)
$7,587
$9,557
($1,970)
$-
Rental
income
Rental
expenses
Change
Millions of yen
Other profit
and loss
¥3,868
¥2,167
¥1,701
(¥418)
¥394
¥1,265
(¥871)
¥-
Note:1. Rental income (from the properties that include portions used as investment and rental property) does
not include the portion that the Company or certain subsidiaries use as the provision of services and
business administration purposes. Rental expenses, however, include all portions of the expenses
(costs related to depreciation, repairs, insurance and taxes).
2. Other profit and loss include in gain on sale and impairment loss.
24.Subsequent Events
(Quality-related expense (recalls))
On May 25, 2016, FHI group applied for a recall in North American Market in accordance with the modified
agreement contents with the U.S. subsidiary of Takata Co., Ltd. and NHTSA (The National Highway Traffic
and Safety Administration of the United States) dated May 4, 2016. The estimated amount of expenses
related to the recall is ¥18,700 million, and will be booked in the consolidated financial statements for the fiscal
year ending March 31, 2017.
In addition, FHI group decided to take actions by the end of June in Japanese Market to respond the
Notification “Extended schedule of the recall of airbag inflators manufactured by Takata Co., Ltd.” released by
MLIT (Ministry of Land, Infrastructure, Transport and Tourism of Japan) dated May 27, 2016 and in other
37
regions including China and Australia in light of actions taken in North American Market and Japanese Market.
The estimated amount of expenses related to the recall is ¥11,800 million, and will be booked in the
consolidated financial statements for the fiscal ending March 31, 2017.
.
(The acquisition of the treasury stock)
Fuji Heavy Industries Ltd. (FHI) resolved at its Board of Directors meeting held on May 12, 2016 to
repurchase of its own shares pursuant to the provisions of Article 156 of the Companies Act that are
applied by the reading of terms under the provisions of Article 165, Paragraph 3 of that Act.
1 Reason for the repurchase of its own shares
FHI will repurchase its own shares to improve shareholder value and capital efficiency.
2 Details of the repurchase
(1) Class of shares to be repurchased: Common stock issued by FHI
(2) Total number of shares to be repurchased: Up to 15,000,000 shares
Proportion of the total number of shares issued and outstanding, excluding treasury stock: 1.92%
(3) Total value of shares to be repurchased: Up to 48.0 billion yen
(4) Period of repurchase: From May 13 to September 30, 2016
(5) Other: Shares repurchased are planned to be cancelled
25.Other
No items to be reported.
38