Print this page

January 15, 2003

Fuji Heavy Industries Ltd.

Fuji Heavy Industries and JATCO Form a Joint Venture Company

to Develop and Produce Continuously Variable Transmissions

Fuji Heavy Industries Ltd. (FHI), a global manufacturer of transportation and aerospace-related products and the maker of Subaru automobiles, and JATCO Ltd, a global manufacturer of automatic transmissions, today announced, the establishment of a new joint venture company, Fuji AT Ltd. With start-up capital of \450 million that was contributed on a 50?50 basis by FHI and JATCO, Fuji AT will be set up by the end of January in order to focus on the development and production of continuously variable transmissions (CVTs) for mini-cars with engine displacements of less than 660 cc as well as for subcompact cars with engine displacements in the range of 1000 to 1300 cc. Based at FHI's Gunma Oizumi Plant, the new company will be initially staffed by 10 employees from FHI and JATCO.

The first task for Fuji AT involves the development and production of a new CVT for mini-cars and subcompact cars. The new company will assign the actual developmental work to FHI and JATCO, and both companies will jointly develop a world class CVT by sharing each other's unique CVT technologies and strengths. Fuji AT plans to finalize product development by the end of the fiscal year ending March 31, 2005 (fiscal 2005), and to start supplying the new CVT during fiscal 2006. The production of the new CVT will be carried out by FHI at the Gunma Oizumi Plant under a consignment arrangement with Fuji AT, and its sales to FHI and other automobile companies will be handled by JATCO. The initial monthly production target is set at 10,000 units. As sales take off and ramped-up mass production volume is secured, Fuji AT plans to realize an operating profit through the economy of scale in production and sales as well as via reduced costs and investment by the fiscal year ending March 31, 2007, when it plans to expand its workforce to 200.

Fuji AT was created by FHI and JATCO because both companies believe in the mutual benefits of a joint venture in the development and production of CVTs. While FHI aims to grow its component business by expanding CVT technologies and products, JATCO is ready to deploy the world's most complete network of CVT production for a wide range of vehicles from mini-cars to full-size vehicles.

FHI boasts an accumulated production volume of 1.85 million CVTs as of December 2002. After developing the world's first commercially viable CVT in 1984, FHI has advanced CVT technology and incorporated improvements. CVTs are regarded as the new generation of automatic transmissions that provide both high-performance driving and low fuel consumption. FHI not only installs CVTs in its own vehicles, but it supplies them to other automakers and places emphasis on the CVT as the company's core technology. The manufacture of CVTs has also proven to be an important component business for FHI.

JATCO is one of the world's leading automatic transmission and CVT manufacturers with accumulated production of more than 38 million units. Its main customers consist of 7 Japanese automakers, including Nissan, and 12 overseas companies. It introduced the world's first mass-produced steel-belt CVT for vehicles in the 2000 cc engine class in 1996, and JATCO launched the innovative toroidal CVT, suitable for high-power output vehicles, in 1999. In the past year, it introduced a mass-produced steel-belt CVT for cars in the 3500 cc engine class. JATCO plans to continue growing its scope of operations by merging with Diamondmatic Co., Ltd. (DMC), ,which is scheduled for April 2003. DMC is a 100% subsidiary of JATCO, and used to be a division for automatic transmission and CVT business.

Outline of Fuji AT Ltd.
Address: Oizumi-machi, Oragun, Gunma, Japan (based at FHI's Gunma Oizumi Plant)
President: Koichi Ikeda (currently Senior Vice President & Member of the Board at JATCO)
Capital: \450 million (FHI 50%, JATCO 50%)
Establishment: January 2003
Employees: 10 (approximately 200 by the fiscal year ending March 31, 2007)
Major business: Development and production of CVTs for mini-cars and subcompact cars

# # #