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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.

If your TV rats you out, what about your car?

Vizio, the TV manufacturer, recently had to pay a $2.2-million fine to the FTC recently because it was discovered that its sets were collecting data about viewers' watching habits and then using the information for its own benefit. Last year, it was revealed the Samsung smart TVs were busy listening to what was being said, even if the conversations in question had absolutely nothing with switching the channel away from the Matt LeBlanc Top Gear. Nowadays, auto manufacturers seem to be tripping over each other pointing out that they offer Apple CarPlay and Google Android Auto. And more recent phenomenon are announcements—from companies including Ford and Hyundai—that they are offering Amazon Alexa capabilities. You talk. It listens. In late January, General Motors said it is releasing a next-generation infotainment software development kit (NGI SDK) to software developers to write apps for GM cars. The NGI SDK includes native Application Program Interfaces (APIs) that allow access to expected things - like oil life and tire pressure and whether lightbulbs are burned out - but unexpected things, as well. Like the presence of passengers in the vehicle. When your TV set is ratting you out, isn't it likely that your car will? In making the announcement of the NGI SDK, GM pointed out that it has the largest connected fleet on the road, some 12-million vehicles. The company also noted: "From 2015 to 2016, GM has seen data usage by customers increase nearly 200 percent. Mobile app use for GM vehicles also hit an all-time high in 2016, with more than 225 million interactions." Is it not plausible that they know more those interactions than simply the number of them? GM's privacy agreement is like most privacy policies, which boils down to: You use it (the device, software, etc.), you potentially give up a portion of your privacy. While on the subject of apps, coincident with this year's CES, Subaru announced that it has added eight cloud-based apps to the STARLINK multimedia system in the 2017 Impreza. Some are familiar, like Yelp. Some are a bit narrow in focus, like eBird, which was developed by the Cornell Lab of Ornithology for birdwatchers. And one ought to give a bit of pause: RightTrack. According to Subaru, "RightTrack Test Drive from Liberty Mutual Insurance monitors driving habits and provides customers with tips on driving safer to help lower their insurance rates and improve their safe driving skills." Or said more simply: You drive. It watches.

2016 Subaru BRZ Series.HyperBlue Quick Spin

On its own, there's not much to "review" about the Subaru BRZ's new Series.HyperBlue trim. Limited to just 500 units, the coupe wears a new shade of blue, its 17-inch wheels and exterior badges are painted black, and inside, the HyperBlue color carries over to the accent stitching and logos on the seats. I love – no, love – this color. If you're a fan of the BRZ, like cool blues, and are thinking of picking up a 2016 model year example, this is the one to get. Plus, this car doesn't have all that bolted-on visual stuff from last year's Series.Blue. HyperBlue aside, it's the same BRZ it's always been. Yes, Subaru's updated Starlink infotainment system is now available, and there's a frameless rearview mirror inside the cabin. That's about it in terms of 2016 model year updates. But it's still worth revisiting. I've driven the BRZ at home in Detroit, and it's lovely. It's got a great chassis, it uses rear-wheel drive, and it's powerful enough to have lots of fun at legal speeds. (Seriously, why does everyone keep complaining about "only" 200 horsepower? That's plenty for this lightweight.) But until now, I've never had the chance to experience this coupe on a truly great road. So during a recent trip to southern California, I took a jaunt out to Angeles Crest Highway for a day of HyperBlue antics. On the right road, this car is even more charming than I remember. Driving Notes I think the reason why some people complain about a supposed lack of power is because they aren't driving it correctly. Peak horsepower arrives at 7,000 rpm, and the full 151 pound-feet of torque is delivered at 6,400 rpm. So for spirited driving, don't even bother revving below 3,500 rpm. No, it's not the best sounding engine (what naturally aspirated flat-four is?), but don't let the noise fool you. Keep the 2.0-liter boxer on boil, and you'll find salvation in this 200-hp mill. To me, the BRZ's steering feel is second only to the Mazda Miata. The car's lightness is accurately communicated through the wheel, but it's direct, nicely weighted, and never void of feedback. Combined with a firm, balanced chassis, you get a great sense of what all four wheels are doing at any given time. Grip level and weight distribution is easy to sense while cornering, making it easier to push the car harder and harder. The tail steps out a smidge, and you know exactly how much corrective input to give. I love a car that works so seamlessly with the driver.