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Report: Subaru Launching Plug-in Hybrid in U.S. By 2018

But profits will fall as Subaru spends on new technologies.

Subaru plans to launch a plug-in hybrid model in the U.S. by 2018 to help bolster its fuel-efficiency ratings, according to a new report from Automotive News. According to AN, Yasuyuki Yoshinaga, head of Subaru parent Fuji Heavy Industries, said that Subaru will see lower profits over the coming years as it invests in fuel efficiency.

Because Subaru sells many all-wheel-drive crossovers, it must put more effort into advanced technologies to boost fuel efficiency. While Subaru already sells the XV Crosstrek Hybrid (pictured), AN reports that the company will launch a new plug-in hybrid in the U.S. by 2018 -- mostly to meet rules in California requiring automakers to sell low-emissions cars there starting in 2018. Previous reports suggested that Subaru might work with Toyota to develop its future plug-in hybrid.

As Subaru had previously said, the automaker also plans to transition all of its engines to direct injection starting in 2016, at the same time that the Impreza reportedly switches to a new platform. By 2020, Subaru plans to have cylinder-deactivation and lean-burn technologies on most of its engines, further cutting fuel consumption.

Although executives warn that developing all these technologies may hurt the company's profit margins, Subaru sales continue to grow in the U.S. Through May, the company's car sales here are up 16 percent year-over-year, and May was the 42nd consecutive month in which Subaru sales increased. And that comes after Subaru finished 2014 with sales up 21 percent.