Fuji Heavy Industries Ltd., maker of Subaru cars, barely managed to turn in a profit in the first quarter due mainly to costs associated with the US launch of a new version of its flagship Legacy model, according to Reuters.

Operating profit was a mere 12 million yen ($US107,300) for the April-June term, down from 9.23 billion a year earlier, even though revenue rose 8.5% to 307.5 billion yen, the report said.

According to the news agency, net profit, which fell 90% to 619 million yen, was also hurt by a 12-yen fall in the value of the dollar to an average 107 yen in the quarter.

The niche maker of off-road vehicles, however, reportedly stuck to its forecast made in May for an operating profit of 45 billion yen in the year to next March, down 10.6% from last year.

"Sales in Japan should pick up in the July-September quarter, so we're not too worried about (overall profits in) the second half," executive vice president Shunsuke Takagi told Reuters.

The news agency said Fuji Heavy, best known for its symmetrical all-wheel-drive technology, expects damage from a weaker dollar to push net profit down 17% to 32 billion yen for the year, while sales are forecast to rise 2.1% to 1.47 trillion yen.

Domestic sales grew 10.3% to 54,000 vehicles during the quarter, helped by an increase in demand for cheaper 660cc minicars, while North American sales rose 22% to 44,000 units.