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Japanese automakers welcome North American trade deal, fear what's next

TOKYO — Toyota, Nissan and Mazda welcomed on Tuesday the revised North America trade deal that left Japanese automakers unscathed, but they may face a bumpy ride when Washington and Tokyo hold new talks on over $40 billion of annual U.S. auto imports from Japan. The United States and Canada reached an agreement on Sunday to update the 1994 North American Free Trade Agreement after Washington had forged a separate trade deal with Mexico in August. The updated deal effectively maintains the auto industry's current footprint in North America, and spares Canada and Mexico from the prospect of U.S. national security tariffs on their vehicles. Mazda, which ships cars to the United States from Mexico and Japan, called the deal a "big step forward". Nissan, which makes the cars it sells in the United States locally as well as in Mexico, Japan and other countries, said it was "encouraged" by the agreement. Toyota, Japan's biggest automaker, said it was "pleased" that a basic deal was reached. Other automakers were not immediately available for comment. While the deal has removed the risk that the disintegration of the pact would have posed to automakers, bigger risks loom large for Japanese firms as a chunk of the roughly 7 million cars they sold in the U.S. last year were shipped from Japan, and a trade deal between Washington and Tokyo has yet to be agreed. The United States and Japan last week agreed to begin fresh trade talks, with U.S. President Donald Trump seeking to address Japan's $69 billion trade surplus, of which nearly two-thirds comes from auto exports. Washington is also investigating the possibility of slapping 25 percent tariffs on auto imports on national security grounds, although it has agreed with Japan to put any new tariffs on hold during the talks. Analysts say the United States may take a tougher stance on auto imports from Japan than from its neighbors. "If Japan requests an exemption from the 25 percent tariffs under consideration, Washington could propose a more strict cap on imports than it agreed to with Mexico and Canada," said Koji Endo, senior analyst at SBI Securities. "That would be a risk." This could be a big blow to Japan, as the United States is a key source of revenue for Japanese automakers including Toyota, Nissan and Honda. The U.S. market accounts for a quarter or more of their annual global vehicle sales, and of their total U.S.

Nissan to pull out of venture fund with Renault in cost-cutting drive, insiders say

TOKYO — Nissan is likely to pull out from a venture capital fund it runs with alliance partners Renault and Mitsubishi Motors, as part of the Japanese automaker's drive to cut costs and conserve cash, two sources said. Nissan will formally take a decision on whether to leave the fund, Alliance Ventures, by the end of this month, the two Nissan insiders told Reuters, declining to be identified because the information has not been made public. The likely move comes after Nissan's junior partner, Mitsubishi Motors Corp, told an alliance meeting last week that it would no longer continue to inject money into the fund, one of the sources said. The decision to leave the Amsterdam-based fund was all but a done deal, the other source said, adding: "Of course we're out. The house is on fire." A Nissan spokeswoman said it was speculation and declined to comment. A Mitsubishi spokesman said no decision had been made. The move comes as Nissan — which has seen its earnings slump — is now facing a downturn in China, its biggest market, due to the impact of the coronavirus outbreak. China sales plunged 80% last month. It also highlights the extent of the automaker's cost-cutting under new CEO Makoto Uchida, who is under pressure for a quick turnaround. Alliance Ventures is aimed at finding "learning opportunities" for the alliance through investing in startups, and is supposed get up to $200 million (153.3 million pounds) a year from the three alliance partners, although it never achieves that full amount, the first source said. It was set up under former alliance head Carlos Ghosn, whose dramatic arrest in Japan culminated in an escape to his childhood home of Lebanon in December. Ghosn faces multiple charges in Japan, including of under-reporting earnings and misappropriation of company funds, all of which he denies. According to its website, the fund was set up with a $200 million initial investment and aims for up to $1 billion by 2023. Portfolio companies include WeRide, a Chinese robo-taxi startup and Tekion Corp, a cloud-based retail platform for cars. "It wasn't established by Ghosn as a way to make money. It was for those learning opportunities we get from investing in smart startups," the first source said. "But given the tough financial situation we are facing, we are looking at investment return." Reporting by Norihiko Shirouzu; Editing by David Dolan/Louise Heavens/Susan Fenton.

Mitsubishi teases updated 2025 Outlander with tweaks throughout

There's an updated Mitsubishi Outlander PHEV on the way for the 2025 model year, four years after the launch of the fourth-gen. Europe released a bit of information on their version in July, one "specifically developed for the European market." Despite hype that the electrified SUV "is based on the Japanese I-Fu-Do-Do concept of authenticity and majesty," the outline we can make out in the European teaser image suggests exterior lines won't stray far afield. Now Japan has released a few artfully shaded images of what buyers can expect, along with additional details. Set beside the Euro tease, the DRL and headlight image portends that the "more refined and sophisticated face" won't be much different than today's face, so figure on the usual headlight and taillight revisions plus some tweaks to character lines. The development team promises a "greatly improved" interior based on customer feedback. We'll guess that statement is focused on lower trims; we've called the cabins of upper trims one of the Outlander PHEV's strongest advantages. The interior design philosophy was dubbed "Majesty Phase 2 - Refinement and further quality," and we know it means upper trims will get ventilated seats semi-aniline leather for the first time. The infotainment touchscreen should grow to 12.3 inches, replacing the 8- and 9-inch screen on today's trims and matching the size of the digital instrument cluster. The automaker has worked with Yamaha for a couple of years on vehicle-specific audio systems, there should be one on the way for the Outlander PHEV with branded speaker grilles and multiple sound profiles. Looks like there's a larger battery on the way as well, extending pure-electric range past today's 38 miles powered by a 20-kWh pack; this larger unit might add V2L capability so that the Outlander can use its energy to power a home. Mitsubishi might upgrade output of the naturally aspirated 2.4-liter four-cylinder, or boost output from the two electric motors. Engineers are definitely retuning the handoff between the ICE and battery for more electric driving and a smoother transition. Suspension tweaks creating a ride "one class above the rest" are coming, and new colors and wheel designs are a given.