Chery, Subaru may postpone signing due to earthquake

Chinese car maker Chery may postpone signing with its future Japanese partner Fuji Heavy Industries due to Japan's earthquake, according to auto.163.com.

A previous report said the two sides may sign the agreement in the final week of March.

An insider of Chery revealed earlier that it will establish a joint-venture company with Subaru in Dalian.

Subaru was reported to invest 30 billion yan ($365.29 million) jointly with Chery to build a factory in Dalian. The factory will hold an annual production capacity of 50,000 units after the completion of the project's first phase, and the number will rise to 150,000 units once it is completed. Subaru plans to make of China its second largest overseas production base.

Subaru's market share in China has been increasing since it entered Chinese market in 2004. Its sales volume last year surged to 57,000 units from 2009's 35,000, up 62.9 percent. Subaru Forester's January sales in Beijing reached 600 units, standing first.

The reason for Subaru and Chery's choosing of Dalian as their production base falls on the city's geographic location. Being an important port city in North Asia, Dalian adjoins first-tier cities such as Beijing and Tianjin, as well as neighboring countries South Korea and Japan. Its location makes it convenient for Subaru to transport car components.

Forester, Impreza, and Legacy are three models most possibly to become the first China-made Subaru cars.

Chery sold 682,000 vehicles last year, and net profit upped to 200 million yuan ($30.44 million). The domestic carmaker wants to increase profits through forming joint-venture companies.