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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

2018 Subaru Crosstrek improves on an already winning formula

There's a brand-new Subaru Crosstrek on the way for 2018, and the European version, known as the XV, is making its debut at the Geneva Motor Show. There's every reason to expect the new Crosstrek to be a stunning sales success. In 2016, Subaru sold 95,677 Crosstreks in the United States, easily besting models like the WRX, Legacy, and the Impreza upon which it's based. Those sales represented a 7.6 percent gain over the previous year, which is especially impressive considering that the Crosstrek is very much starting to show its age. The mini-crossover inherits all the benefits of the latest Impreza, including a stiff new chassis that promises drastically improved driving dynamics. Following in the footsteps of the larger Outback, which is based on the midsize Legacy, the Crosstrek adds a bit more ground clearance and aggressive off-road-lite styling to the compact Impreza hatchback. Don't expect the Crosstrek to tackle the Rubicon Trail – Subaru says it will have "excellent rough-road capability" – but do expect it to sell in droves in areas that get significant amounts of snow. View 15 Photos A 2.0-liter four-cylinder boxer engine delivers 154 horsepower to all four wheels through a continuously variable transmission. We generally prefer traditional stepped-gear transmissions, but Subaru has a history of keeping its CVTs pretty well behaved. Seven pre-programmed gear ratios can be selected by the driver in manual mode. A quick 13:1 steering ratio, active torque vectoring technology, and a lower center of gravity will all deliver dividends on the road, and 8.6 inches of ground clearance mean hard parts won't scrape the ground when the paved roads come to an end. All new Crosstrek models will come standard with EyeSight, a safety system that includes pre-collision braking control, adaptive cruise, and lane-keeping assistance. Blind-spot detection, lane-change assistance and reversing assistance will also be available. Expect more information to filter out soon, and stay tuned for live photos when we hit the show floor in Geneva. The US-spec Crosstrek will make its debut in April at the 2017 New York Auto Show. Related Video:

Subaru puts Japanese production on pause in the wake of deadly typhoon

Subaru idled its main factory in Gunma, Japan, in the wake of the deadly typhoon that wreaked havoc on the eastern part of the country. The shutdown is tentatively scheduled to last about a week. Located roughly two hours northwest of Tokyo, the Gunma factory fell silent at the end of the morning shift on October 16, according to Automotive News. The facility wasn't directly affected by the typhoon, but some of its suppliers suffered flood damage. "These suppliers are currently working to normalize their operations with our human and material support as well, but we expect some impairment of their supply of automotive components and parts to Subaru," the firm said in a statement. It didn't name the suppliers, and it didn't identify the parts they make, but it added production should resume on October 25. About 2,500 cars leave the Gunma factory daily, Automotive News learned, so approximately 11,250 vehicles will be delayed by the shutdown.The BRZ, Forester, Crosstrek, and the WRX all come from the facility. It also makes the Impreza, though American-spec models are built in Indiana, and the Levorg, which isn't sold in the United States. Subaru confirmed to Autoblog its plant in Lafayette isn't affected by the storm, which suggests it sources parts from other suppliers. Subaru is the first car manufacturer to idle a factory in the wake of typhoon Hagibis, which killed 77 people when it touched down on October 12, but it might not be last. Suppliers normally work with several carmakers, and Toyota and Mitsubishi are reportedly keeping a very close eye on their parts inventory. Auto News Plants/Manufacturing Subaru