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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.

Subaru uses a mime and a toy car to explain why it loves the boxer engine

I will freely admit to struggling with why Subaru continues to stubbornly employ a boxer engine design while so few other automakers do the same. After all, with twice the number of cylinder heads and cams as a traditional inline four-cylinder engine, a boxer four is more complex, more expensive to manufacture and more cumbersome to service with few tangible benefits. Until recently, the company's engines struggled to meet the fuel economy numbers of its competitors while offering no real boon in horsepower or torque. Subaru seems to recognize I'm not the only one scratching my head.
In order to help us non-believers understand what's what, the company has employed a pair of mimes, a toy car and a few clay engines to demonstrate the folly of every other automaker on the planet. Subaru says the boxer offers up a lower center of gravity than either an inline four-cylinder engine or a V6, which I will gladly concede. The company also says the design offers up smoother operation.
I'll offer just two counterpoints here. First, an engine with a low center of gravity is excellent, but when vehicles like the Forester, XV Crosstrek and Outback boast more ground clearance than most mainstream SUVs, that argument flies out the window. Second, anyone who's spent any amount of time behind the wheel of a vehicle equipped with an inline four and then proceeded to move into one propelled by a boxer can tell you the latter has all of the idling manners of a small tractor. Check out the video below to see for yourself.

Toyota, Honda, Nissan and more collaborating to increase fuel efficiency

Toyota, Honda, Mazda, Nissan, Subaru, Mitsubishi, Suzuki and Daihatsu have announced an alliance that will see a push to improve fuel economy from both gas-powered and diesel-powered engines by as much as 30 percent before the end of the decade.
The newly assembled Research Association of Automotive Internal Combustion Engines put the roughly $20-million project together, with the Japanese government committing to half the cost while the eight manufacturers will chip in the rest.
According to Automotive News, the automakers will team up and share basic research on internal-combustion engines in a bid to cut costs. Eventually, the results of the research will find its way into a production vehicle, although it's unclear just when we'll see the fruits of this partnership on the road.