Subaru carmaker Fuji Heavy Industries expects to return to the black with a group operating profit of JPY1bn for the current business year on cost-cutting efforts and strong sales in North America and China.

The anticipated operating profit compares with an earlier forecast of a JPY35bn yen loss and a JPY5.8bn loss booked the previous fiscal year as the automaker enjoys brisk global sales of its fully redesigned Legacy series, Kyodo News said.

The company more than halved its full-year group net loss forecast to JPY25bn, against an earlier expected JPY55bn on a new sales projection of JPY1.36 trillion, up from the JPY1.32 trillion projected in May.

Fuji Heavy raised its global sales target for fiscal 2009 to 545,000 units, against an earlier 508,000 units, though still down 1.8% from a year earlier.

During the first half of fiscal 2009 from April to September, Fuji Heavy saw sales slump in Japan and Europe as the economic downturn and the stronger yen continued to hit profits.

But demand was strong in North America, where most automakers are struggling, as sales of its Forester SUV benefited from the 'cash for clunkers' programme in the United States and the popularity of the new, bigger and more powerful Legacy.

''We've been able to expand our profits in the United States even with such a sharp appreciation of the yen,'' Fuji Heavy president Ikuo Mori told Kyodo News. ''That's mainly due to the firm expansion of our unit sales.''

Sales in China jumped 68.2% year on year, also on brisk Forester demand.

For the first half, the automaker booked a group net loss of JPY21.73bn against a year-earlier profit of JPY4.4bn, in line with revised forecasts for the period announced last week in which it halved its net loss outlook.

The company booked an operating loss of JPY11.44bn yen against a year-earlier profit of JPY18.35bn on sales of JPY635.55bn, down 14.6% from a year earlier.