Subaru car maker Fuji Heavy Industries plans to begin production in China and will accelerate efforts to find a local partner in a booming market certain to become the world's biggest, its president has said.

''We've already made the decision to begin (local production) in the future,'' Fuji Heavy president Ikuo Mori said in an interview with Kyodo News, adding the company is studying who to partner with and which vehicle to produce in China.

Fuji Heavy, 16.5% owned by Toyota Motor, saw sales in China soar 86.2% year on year to 31,328 units during the January to November period and sales are expected to reach 50,000 units next year.

''It is already clear that China will become a bigger auto market than the United States,'' Mori said. ''It's safe to say the need (for local production) is accelerating.''

Mori said the company has not yet decided whether to form a joint venture with a local company or to supply technology and consign production. It will take at least two or three years until the automaker begins local production, he said.

Unlike its bigger rivals, Fuji Heavy is also a rare strong performer in the battered US market with sales rising 13.6% to 193,578 units from January to November due to strong demand for its Forester sport utility vehicle and for the new bigger and more powerful Legacy series.

Mori said he expects sales to reach 210,000 units by the end of 2009 and will aim to maintain a 2% share in the United States by selling around 230,000 units next year.

''Our challenge for now is how we're going to address sales in the United States, which we view as our most important market, and in growing emerging markets,'' Mori said.

Mori said he viewed the capital tie-up between Suzuki and Volkswagen as a ''threat'' and would closely watch the fruits of the alliance.

Fuji Heavy and Suzuki have their own capital ties dating back to 2000, where they mutually own more than 1% of shares. But Mori said the relationship would remain intact and cooperation in areas like parts procurement may also be possible.

Suzuki's Hungary plant has supplied Justy-brand cars to Subaru on an OEM basis in the past but the current Justy is made by Daihatsu, Toyota's minicar specialist unit.

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