Toyota will provide Subaru-maker Fuji Heavy Industries with small cars, as part of a broader product collaboration strategy between the two companies.

Toyota acquired a 17% stake in FHI last year to become its largest shareholder.

According to local reports, Toyota will provide around 10,000 small vehicles (up to 1500cc) per year to FHI to be sold under the Subaru badge, starting this autumn. One report suggested that the model will be the Toyota Ractis sub-compact car which comes with a choice of 1.3L and 1.5L engine.

[The Ractis, based on the Yaris/Vitz, replaced the Yaris Verso/Fun CarGo in Japan late in 2005 and has been exported to Hong Kong since 2009 – ed.]

The outsourcing strategy will allow Subaru to focus on its more popular compact and mid-sized cars, including the Legacy.

The two companies reportedly hope to jointly release a sports car under their respective brands at the end of 2011. Toyota is also expected to provide technologies for future Subaru hybrid vehicles under the partnership.

Tony Pugliese