Subaru halts bulk of global car output over part defect…

Tokyo-Subaru Corp said its sole car factory in Japan, accounting for roughly 60 percent of global production, could be out of action for almost two weeks after it discovered a suspected defect in a power-steering component.

Shares in Japan’s sixth-largest automaker fell nearly 7 percent at one point before recovering some ground after the company announced further details, including plans to restart production on Monday at the earliest. It closed down 3.4 percent, while the benchmark Nikkei average ended flat.

The production stoppage, which started from the night shift on Jan. 16 at one of Subaru’s only two factories worldwide, was first reported in the Asahi newspaper on Wednesday.

The possible defect affected the Forester, Impreza, and XV models, the automaker said. Production of all other models had also stopped because they are built on the same assembly line, it said.

“Based on the contribution margin per vehicle, we estimate that a complete shutdown of Japanese production lines for one week would dent operating profits by 13.5 billion yen ($123 million),” Nomura Securities analyst Masataka Kunugimoto said.

Subaru said the cause of the potential defect was still unknown. It declined to comment on why the problem was not disclosed earlier.

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