Subaru to invest $400M in Lafayette plant, hire 900

Subaru plans to invest at least $400 million to expand its factory in Lafayette and will add 900 workers to build the Impreza compact car there in 2016, company officials said Wednesday morning.

The plant now employs about 3,600 people and builds the Legacy and Outback cars and the Tribeca SUV. It also builds the Camry midsize car under contract with Toyota Motor Corp., the top shareholder in Subaru with a 16.5 percent stake.

Subaru of Indiana Automotive, a subsidiary of Japan-based Fuji Heavy Industries, said it will boost capacity at one of two assembly lines at the Lafayette plant—the one that is now being used to build the Camry—from 100,000 vehicles to 200,000 vehicles.

The comany's plans entail expanding operations at its 832-acre Lafayette campus by more than 500,000 square feet. The project also will involve the installation of new equipment, primarily in the paint and body-assembly sections. Construction is slated to begin this fall, with completion expected by the end of 2016. Production of the Impreza is expected to start at about that time.

Subaru's total investment in the expansion will be between $400 million and $450 million, the company said.

The Indiana Economic Development Corp. has offered Subaru up to $9.5 million in conditional tax credits and $500,000 in training grants, based on the job-creation plans. The tax credits are performance-based, meaning the company is not eligible to claim incentives until employees are hired.

The city of Lafayette will consider property tax abatements for the project, according to an IEDC release.

Subaru sold 724,500 vehicles globally for the fiscal year ended March, up 13 percent from the previous year, with 357,600 of them in the U.S. It sold 163,100 vehicles in Japan.

Subaru's U.S. sales have doubled in the past five years. In 2012, more than half of all Subarus sold in North America were built in Lafayette, according to the company, including more than 271,000 assembled there in the fiscal year ending March 31.

U.S. sales of the Impreza, now built in Gunma, Japan, have fallen 31 percent this year, due largely to a shortage of vehicles on dealer lots. Ward's Automotive says Subaru has only enough Imprezas on the ground to supply dealers for 29 days. A 60-day supply is considered optimal.

For the fiscal year ended March 31, Subaru sold 108,000 Impreza cars in the U.S., all imported from Japan.

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