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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.

New Toyota 86 and Subaru BRZ could move to a Toyota platform

There's more rumormill news about the future of the Toyota 86 and its twin, the Subaru BRZ. Australian website CarSales reports that the next versions of the coupe twins may switch from the existing and heavily modified Impreza platform to Toyota's TNGA platform. The reason? An unnamed Subaru insider tells the site the next-generation versions of the cars will retain their rear-wheel-drive configuration and thus won't move to the new Subaru Global Platform, upon which the automaker is basing all its new all-wheel-drive vehicles. That leaves two options: staying with the current Subaru platform, or moving to the Toyota New Global Architecture, which underpins vehicles including the Prius, C-HR, Camry and Highlander, and can better accommodate real-wheel-drive layouts. The TNGA would also help save weight and provide economies of scale. "It's a very flexible platform, but we make all-wheel-drive vehicles," the insider told CarSales about the new Subaru platform. "That's our forte, all-wheel drive." The 86 and BRZ launched for 2012, the former as the Scion FR-S, sharing the Impreza platform, Subaru's 205-horsepower 2.0-liter four-cylinder boxer engine and a six-speed manual or automatic transmission. Both brands have confirmed they are working on new vehicles but have declined to offer details, and the source tells CarSales that development at Subaru is well under way. Toyota just revealed its heavily anticipated (and much-dissected) Supra in Detroit in January, based heavily on BMW engineering. The automaker is reportedly keen to build a family of sports cars, with a possible third model under consideration, and is developing the new 86 with plenty of involvement from the Toyota Gazoo Racing division.

Ford reveals the Mustang Cobra Jet, we drive the Chevy Silverado | Autoblog Podcast #550

On this week's Autoblog Podcast, Editor-in-Chief Greg Migliore is joined by Senior Editor Jeremy Korzeniewski and Associate Editor Joel Stocksdale. We discuss the just revealed 2018 Ford Mustang Cobra Jet drag car, along with our driving impressions of the 2019 Chevy Silverado and the 2018 Subaru BRZ tS. We also have a long discussion about the Jeep Wrangler Scrambler, Ford Ranger and small trucks in general.Autoblog Podcast #550 Get The Podcast iTunes – Subscribe to the Autoblog Podcast in iTunes RSS – Add the Autoblog Podcast feed to your RSS aggregator MP3 – Download the MP3 directly Rundown 2018 Ford Mustang Cobra Jet reveal 2019 Chevy Silverado first drive 2018 Subaru BRZ tS drive impressions Jeep Wrangler Scrambler off-road spy shots 2019 Ford Ranger configurations and small truck discussion Feedback Email – Podcast@Autoblog.com Review the show on iTunes Related Video: Podcasts Chevrolet Ford Jeep Subaru jeep wrangler pickup jeep scrambler subaru brz ts jeep wrangler scrambler