Subaru maker Fuji Heavy Industries is to stop producing minicars to concentrate on more profitable small and midsize models.
Although there is still strong demand for minicars in Japan, where they account for more than one third of the market, Fuji Heavy, which sells around 600,000 vehicles a year globally, lacks the muscle to run the gamut from minicars to large passenger cars on its own.
Small cars also offer smaller profits and production of the Sambar, which was launched in 1961, will end this week. The company has sold roughly 3.7m of these over the years.
Other Japanese carmakers will continue to focus on minicars. Nissan and Mitsubishi established a joint venture last year for minicar development and Honda is adapting minivehicle technology for larger passenger cars.
Fuji Heavy corporate senior vice president Motohisa Miyawaki said the same number of engineers is necessary to develop minicars as for larger passenger vehicles.
Consequently, the automaker will focus on horizontally opposed engines as well as four wheel drive and crash safety technologies in hopes of developing unique offerings that set it apart from competitors.
The XV sport utility vehicle, due for release this June, is based on the Impreza. Miyawaki added: "By shifting resources to such vehicles, we were able to become more nimble with development."
A capital and business tie-up with Toyota means that Fuji Heavy will still obtain minivehicles from Toyota subsidiary Daihatsu.
It developed the recently launched BRZ sports coupe - with trademark 'flat four' horizontally opposed engine in partnership with stakeholder Toyota whose version is called the GT86.