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Subaru recalls more cars, slashes guidance as cheating issue widens

By Naomi Tajitsu TOKYO — Subaru Corp said it would recall more vehicles sold in the Japan domestic market on new cases of inspection cheating, and cautioned that rising recall costs would lop off about a quarter from its annual profit forecast. Shares in Subaru, already reeling from a series of recalls for issues ranging from faulty components to inspection do-overs, fell 5 percent to a four-year low on Monday after news of the fresh recalls and the bleak outlook. The company, the smallest among Japan's major automakers, said it would recall around 100,000 vehicles, including its popular Impreza sedan, after discovering that final tests for components including brakes were not conducted properly. Vehicles sold overseas will not be affected. "It's unforgivable that these inspection-related issues are continuing," CEO Tomomi Nakamura said at a briefing, while repeatedly adding that the latest recall would be the last related to testing misconduct. The automaker expects to incur 6.5 billion yen ($57 million) in costs related to the latest recall. This, along with other quality-linked issues, is expected to push down Subaru's operating profit to 220 billion yen in the year to March 2019. It had previously forecast a 300 billion yen profit. Subaru posted a surprise operating loss of 25 billion yen for the three months ended September, its first time in the red for a quarter since 2009 and missing a mean forecast for a 68.46 billion yen profit from 10 analysts polled by Refinitiv. Recall-related costs were the main driver of the loss, while global sales fell 6 percent over the quarter due to weak demand in the United States — its biggest market, where overall demand has cooled since record-high sales in 2016. (Click here for an interactive version of this chart) Engine recall Last month, Subaru nearly halved its first-half operating profit view, citing higher quality-related costs. It later announced a global recall of around 400,000 vehicles, including its Forester SUV and Impreza sedan, to fix a design flaw in the engines' valve springs. That came on the heels of another series of recalls stemming from revelations last year that uncertified workers had been submitting final inspection reports for vehicles sold in Japan. That had also led to a recall of about 400,000 cars. Recalls are common in the auto industry, and automakers regularly put funds aside to pay for them.

The refreshed 2018 Subaru WRX starts at $27,855

Subaru has always staggered the release of new versions of the WRX and STI performance twins from that of the more pedestrian Imprezas. While the latter just received a ground-up redesign for 2017, the once and future kings of all-wheel-drive performance sedans make do with some new options and massaged over styling. Pricing for the new cars, which go on sale sometime in the next few months, has finally been announced. Pricing for the pair is on the high-side of the competition. The 2018 Subaru WRX starts at $27,855. That nets you a 2.0-liter turbocharged boxer four-cylinder making 268 horsepower, a six-speed manual, and Subaru's symmetrical all-wheel drive with torque vectoring. For comparison, the Ford Focus ST starts at $25,650 while the Volkswagen GTI starts at $26,415. Pricing for the new Honda Civic Si hasn't been announced, but expect it to be somewhere in the mid $20,000 range. Stepping up to the STI will set you back at least $36,955, though you get a more powerful 305-horsepower 2.5-liter turbocharged boxer four and a more advanced version of Subaru's all-wheel-drive system. Plus, you get the big rear wing, and that's worth it's weight in Mitsubishi Lancer Evolution owner tears. The far more powerful Ford Focus RS meets the STI dollar for dollar at $36,955 while the Volkswagen Golf R retails for an eye-watering $40,195. Like the Civic Si, pricing for the Civic Type R has yet to be revealed. Both the WRX and STI get updated styling on the front bumper, with larger grilles and new black trim. Additionally, the $32,455 WRX Limited and all STI models feature new LED headlights. The STI also gets new 19-inch wheels and upgraded Brembo brakes. The WRX Premium has an optional $2,050 performance pack that adds Recaro seats with an 8-way power driver's seat, red-painted brake calipers with Jurid brake pads, and deletes the moonroof to reduce weight. Other changes include the latest version of Subaru's Starlink infotainment system, a larger infotainment screen, new EyeSight driver assist features (only on CVT-equipped WRX models), upgraded sound deadening, and upgraded interior materials. Both models receive new roof rack mounting brackets. Look for the 2018 Subaru WRX and 2018 Subaru STI to hit showrooms in the next few months. Related Video:

Motor Trend pits Subaru WRX vs. Ford Focus ST

The Ford Focus ST has enjoyed a relatively calm, if brief, reign in the world of hot hatches. With nothing else in the class (in the States, at least) but the aging Mazdaspeed3 and Subaru Impreza WRX and the slow-selling Volkswagen Golf R, the Blue Oval's 252-horsepower five door has been the go-to vehicle for those that don't need the high-octane lunacy (and expense) of the rally bred Subaru Impreza WRX STI and Mitsubishi Lancer Evolution X.
Now, though, as the new Subaru WRX (it's not an Impreza anymore, though, neither is it a hatchback...) starts to arrive at dealers, the Focus ST appears to be under threat for the first time. Naturally, Motor Trend is here to figure out which one is the best, with another one of its Head 2 Head videos. Host Jonny Lieberman puts both cars through their paces, going above and beyond, quite literally, at the very end of the video.
Have a look below and let us know what you think of MT's verdict in Comments.