Subaru carmaker Fuji Heavy Industries will spend about JPY10bn (US$124m) by next spring to overhaul its Gunma Prefecture minivehicle plant into a factory for small- and mid-size cars.

Business daily Nikkei reported capacity at the Gunma plant will be nearly doubled to around 150,000 units per year, according to Reuters.

Fuji will upgrade existing lines for welding, painting and assembly to keep the initial investment down, the daily said.

The company, which has a capital alliance with Toyota, will withdraw from minivehicle development and production to focus on larger vehicles, Nikkei reported.

Fuji will start buying mini-cars from Toyota's Daihatsu Motor unit under an OEM agreement by next spring, the paper said.

The plant will produce sports cars, designed by Toyota and developed by Fuji Heavy, which both will sell under their own brands. However, Fuji Heavy will ensure that other models can be built there to stabilise utilisation rates, the daily said.

Models, which are yet to be determined, will include mainstays like Legacy, Impreza and Forester, Nikkei said.