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Japan may aid carmakers facing U.S. tariff threat

TOKYO — Japan is considering giving carmakers fiscal support including tax breaks to offset the impact from trade frictions with the United States and a sales-tax hike planned for next year, government sources told Reuters on Wednesday. Going into a second round of trade talks with the United States on Sept. 21, Japan is hoping to avert steep tariffs on its car exports and fend off U.S. demands for a bilateral free trade agreement that could put it under pressure to open politically sensitive markets, like agriculture. "If the trade talks pile pressure on Japan's car exports, we would need to consider measures to support the auto industry," a ruling party official said on condition of anonymity because of sensitivity of the matter. The auto industry accounts for about 20 percent of Japan's overall output and around 60-70 percent of the country's trade surplus with the United States, making it vulnerable to U.S. action against Japanese exports. Japan's biggest automakers and components suppliers fear they could take a significant hit if Washington follows through on proposals to hike tariffs on autos and auto parts to 25 percent. Policymakers also worry that an increase in the sales tax from 8 percent to 10 percent planned for October 2019, could cause a slump in sales of big-ticket items such as cars and home. Prime Minister Shinzo Abe has twice postponed the tax hike after the last increase from 5 percent in 2014 dealt a blow to private consumption, which accounts for about 60 percent of the economy. To prevent a pullback in demand after the tax hike, the government may consider large fiscal spending later when it draws up its budget for next year, government sources said. "One option may be to greatly reduce or abolish the automobile purchase tax," one of the government sources said. The government is also considering cuts in the automobile tax and automobile weight tax to help car buyers, the source added. Reporting by Izumi Nakagawa and Tetsushi KajimotoRelated Video: Image Credit: Getty Government/Legal Isuzu Mazda Mitsubishi Nissan Subaru Suzuki Toyota Trump Trump tariffs trade

Subaru mulls motorsports return, nixes small CUV plans

The Subaru WRX STI breaking the automotive lap record at the Isle of Man might be just the beginning of the headlines trumpeting a Subaru racecar. According to the latest rumors, the Japanese brand is looking at taking motorsports more seriously in the future. That could possibly even mean endurance racing at Le Mans.
According to Auto Express, the brand is mulling a greater participation in motorsport, but the big question is where. The World Rally Championship isn't a certainty because it now favors smaller cars like the Volkswagen Polo. Subaru still competes in series like Rally America and Global Rallycross, but there are bigger stages to play on.
What's interesting, is that this commitment to motorsports comes right as the automaker is denying plans to build a small CUV for its passenger car lineup. According to Auto Express, the company has no intention of developing a crossover smaller than the current XV Crosstrek. Even if the sales are there, it would just cost too much to develop. In the US, at least, the XV is doing great with sales up 42 percent in July.

Poor sales prompt Subaru to kill the Crosstrek Hybrid

The Subaru XV Crosstrek is a major hit. It's high off the ground, offers enough seating for five, and has Subaru's iconic all-wheel-drive system, which is exactly what modern consumers want. As we pointed out last year, Subaru posted impressive sales figures thanks to its crossover lineup, which includes the Forester, Outback, and XV Crosstrek. It turns out, though, that Subaru owners aren't interested in the hybrid variant of the crossover, as Subaru plans to axe the XV Crosstrek Hybrid, reports Cars Direct. The discontinuation of the XV Crosstrek Hybrid is due to the crossover's poor sales figures, claims Cars Direct. Subaru introduced its first-ever production hybrid, the XV Crosstrek Hybrid, in 2013 and after just three years the vehicle is being killed. As we pointed out in our review of the vehicle, the hybrid's larger price tag and marginally better fuel economy made it a tough choice over the non-hybrid models. The XV Crosstrek Hybrid starts – sorry, started – at $27,245, while the base 2.0i model has - had - a price tag of $22,445. That's $4,800 more for a vehicle that gets seven mpg better in the city and only three mpg more on the highway at 30 mpg city and 34 mpg highway. We reached out to Subaru for a comment, but haven't heard back yet. We'll update the story when we hear back from the automaker. Related Video: Featured Gallery 2014 Subaru XV Crosstrek Hybrid: First Drive View 53 Photos News Source: Cars DirectImage Credit: Copyright 2016 Jonathon Ramsey Green Plants/Manufacturing Subaru Crossover Hatchback subaru xv crosstrek subaru hybrid discontinued subaru xv crosstrek hybrid