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Toyota to boost its Subaru stake to more than 20%

TOKYO — Toyota Motor Corp plans to raise its stake in Subaru Corp to more than 20% from around 17% now, a deal that would also see the smaller firm invest in Japan's top automaker, two people with direct knowledge of the matter said on Friday. The deal is due to be approved at a Toyota board meeting on Friday, the people said, declining to be identified because the information has not been made public. The investment would come a month after Toyota and another smaller Japanese automaker, Suzuki, said they would take small equity stakes in each other. Such tie-ups highlight how automakers are scrambling to chase scale, manage costs and boost development. Traditional car makers, especially smaller ones like Subaru and Suzuki, are struggling to meet the fast pace of change in an industry being transformed by the rise of electric vehicles, ride hailing and autonomous driving. Toyota's investment is likely to cost more than 70 billion yen ($650 million) based on Subaru's stock market value, said the Nikkei business daily, which first reported the news. Subaru is likely to reciprocate with a stake in Toyota that would roughly equal the value of Toyota's additional investment, one of the people told Reuters. The companies have long worked together on projects such as the Toyota 86 and Subaru BRZ twins. At one time, Subaru built Toyota Camrys in its Indiana plant. Representatives for both Toyota and Subaru said the news was not something that had been announced by their companies. "The plan appears to be to ultimately make Subaru a fully owned subsidiary, to help create a 'mega Toyota.' This is the first step towards that," said Takeshi Miyao, managing director of Carnorama, a consultancy. "It's all about building scale." Subaru is particularly strong in sport-utility vehicles (SUV) and all-wheel-drive technology. The two automakers in June said they planned to jointly develop an electric sport-utility vehicle on a platform produced together, to split costs. Car markers around the world have been joining forces to slash development and manufacturing costs of new technology. Ford Motor Co and Volkswagen AG have said they will spend billions of dollars to jointly develop electric and self-driving vehicles. Toyota seems to be particularly keen to build scale now by investing in smaller, domestic automakers, rather than forging cross-border tie-ups like some of its rivals.

Honda, Subaru airlifting parts to bypass port labor diputes

It should be abundantly obvious that a vital element in building cars is actually having the components on hand to assemble them. A labor dispute on the West Coast between the International Longshore and Warehouse Union and management is not making that quite so easy for some Japanese automakers. Work slowdowns at the ports have pushed Honda and Subaru parent Fuji Heavy Industries into flying some parts into the country. The two automakers began shipping by airplane late last month to avoid production delays, according to Bloomberg, but it has been an expensive solution. Subaru's chief financial officer said the decision cost around $60 million more per month than sending components by cargo ship. They aren't the only companies dealing with the problem, either. Toyota reportedly stopped overtime assembly at some of its factories here because of the delays in getting parts, according to Bloomberg. The dockworkers have been negotiating on a new contract since May 2014, and the current offer on the table to them has offered a 3 percent raise, according to Bloomberg. Although, the union is reportedly considering another slowdown at 29 ports along the West Coast in the coming days. News Source: BloombergImage Credit: Nick Ut / AP Photo Auto News UAW/Unions Honda Subaru Toyota shipping port labor dispute

Subaru BRZ tS returning for 2020?

Last year Subaru rolled the special edition BRZ tS onto the market, the tS standing for "tuned by STI." Although the mad men at STI didn't inject more go into the 2.0-liter boxer-four with 205 horsepower and 156 pound-feet of torque, they did apply the whetstone to the BRZ to provide sharper edges for that power. Subaru only offered 500 examples for sale in the U.S., part of the coupe's regular cadence of special editions. CarsDirect discovered the model listed in the EPA's fuel economy listings for the 2020 model year, though, leading all to wonder if the tS will make a return next year.   If it does come back, we can expect STI to make this new take at least as good as before. Exclusive kit on the 2018 version included strut tower braces upgraded with pillow-ball joints, draw stiffeners for the front suspension, STI-tuned springs and Sachs dampers, Brembo brakes, and lightweight 18-inch wheels in Michelin Pilot Sport 4 rubber. Aero-wise, front and rear underspoilers worked in tandem with a manually adjustable rear wing in raw carbon fiber. Drivers could keep up with the additional dynamic prowess via the multifunction performance display lifted from the BRZ Limited. The 2018 BRZ tS cost $34,355, about $2,000 more than the Limited trim at the time, in return for the extra tuning, larger wheels, and better tires.  According to the EPA, the 2020 BRZ tS and its six-speed manual will return 20 miles per gallon in the city, 27 on the highway, and 23 combined. That's a drop of one mpg in the city and on the highway, two mpg combined, compared to the standard coupe with a six-speed manual. When CarsDirect queried Subaru, the spokesperson made no denials, only attributing the difference in fuel economy to the larger wheels and stickier rubber. For anyone considering the 2020 Toyota 86 Hakone Special Edition available later this year, now you have a choice to make.