Toyota may supply Fuji Heavy Industries with small cars for the Subaru car maker to sell in Europe, according to the Yomiuri newspaper.

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Toyota, which is Fuji Heavy’s largest shareholder, is looking at providing cars based on its Yaris model and on another model sold only in Europe [likely to be the Czech-built Aygo] under an original equipment manufacturing deal from as early as 2008, the paper said, according to Reuters.


The news agency said the move would help Fuji Heavy, which lacks a strong small car model in a market where cars must meet new tighter emission standards. It would also help Toyota cut costs by boosting volume sales.


Fuji has previously sold a rebadged Hungarian-built Suzuki Swift small car line as the Subaru Justy in Europe. Before that, it sold a Japanese-built model of the same name. Both were available with two-and four-wheel drive, the latter is a Subaru hallmark.


Reuters said Fuji Heavy, in which Toyota took an 8.7% stake from General Motors last year, is aiming to redefine itself as a premium car maker with upmarket models such as the B9 Tribeca SUV but has failed to achieve sufficient sales.

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British consumer reviewers have given the Tribeca, newly-launched here, a lukewarm reception.


Now allied with Toyota, Fuji Heavy hopes to beat high production costs and inefficiencies to jump-start a delayed recovery, the Reuters report added.


As part of their co-operation, Toyota and Fuji Heavy announced a deal last March to build the popular Toyota Camry sedan at an underused Subaru plant in the United States, while Fuji would develop petrol-electric vehicles using Toyota’s hybrid technology, the news agency said.