Chery-Subaru linkup likely

Domestic carmaker Chery Automobile Co and Japan's Fuji Heavy Industries have agreed in principle to build Subaru vehicles in China and are now seeking approval from regulators, Reuters reported recently.

As KHABAR KHODRO reports, The report cited sources with knowledge of the deal saying that the two companies have "agreed on the major terms and conditions" to make Subarus in the northeastern coastal city of Dalian.

But Chery spokesman Jin Yibo told China Daily that the company currently has no information to release.

Earlier this year, Jin confirmed to domestic media that Chery was in talks with Subaru, but it was uncertain at the time whether the two would come to an agreement.

Japanese reports at the end of last year said Subaru was in final talks with Chery to build a 30 billion yen ($369 million) plant in Dalian with initial annual capacity of 50,000 cars that could eventually rise to 150,000 units.

Imported Subarus went on sale in China in 2004 and achieved robust growth in the booming SUV segment with its best seller, the Forester SUV. Its other products include the Legacy, Outback, Impreza, Tribeca and WRX.

Industry insiders have surmised that the Forester is most likely the first Subaru model that would be made locally.

China's promising SUV market may double in size from 2010 to 2015, according to projections from market research firm JD Power.