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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.

Subaru investigation confirms vehicle data tampering in Japan

Subaru has admitted that alteration of fuel-economy and emissions data took place in its Gunma and Yajima manufacturing plants between December 2012 and November 2017. Some 900 vehicles were affected by data tampering, which Subaru says was done in the vehicles' final inspections by factory-floor inspectors. In a report, Subaru says "non-conforming" final vehicle inspections were identified in late 2017, and that the Japanese Ministry of Land, Infrastructure, Transport and Tourism demanded that Subaru undertake an internal investigation of the matter. Almost 7,000 vehicles were subject to inspection in the investigated time period, and the measurement equipment retained test data for some 6,500 of those. It showed that 903 vehicles had had their data "inappropriately altered," partially so that average data values would meet quality control standards. Subaru says that the decision to do this was made among vehicle inspectors and their foremen. As Subaru's statement reads: "Inspectors engaging in sampling of fuel economy and emissions were instructed by their seniors that, if results for each vehicle did not meet such standards, measurement values should be altered to those that meet such standards, and, according to such instructions, the inspectors altered measurement values. [...] Even if there were no problems in comparison with the internal quality control standards, inspectors altered measurement values with the intention of reducing variance in measurement values in order to avoid questions from the Group Chiefs and the Section Chief on such variance. It should be noted that alterations were made not only to make results better, but also to make them worse." It appears that everything was done to keep the average values right. Subaru adds: "Although the relevant laws and regulations stipulate that, in certain limited cases, measurement values could be altered in order to adjust errors caused by measurement equipment, inspectors misunderstand such adjustment method because of deficient internal rules and inadequate training. Inspectors altered measurement values by adjustment methods not stipulated in the relevant laws and regulations, without understanding that their methods were inappropriate." Test equipment did not contain data from earlier than 2012, but Subaru suspects such tampering took place as long ago as 2002. However, the matter will not result in recalls.

You can buy the last Subaru rally car driven by Colin McRae

Colin McRae continued entertaining the fans for years after retiring from competing full-time in the World Rally Championship – though sadly not for enough of them. His last public appearance was at the 2007 Goodwood Festival of Speed, driving the car you see here to the crowd's delight. And now it could be yours. Though it may look mostly like any ordinary Subaru Impreza WRX STI, this is a full-on S12B rally machine. Petter Solberg drove it for the factory Subaru World Rally Team throughout most of the 2007 World Rally Championship, scoring two podium finishes. That would make it desirable enough as it is, but then McRae drove it up Lord March's front lawn (see the video below) to cement its place in history. It was the last time McRae drove in public before he died in a helicopter crash near his home in Scotland just months later. The vehicle has since been stripped down to its shell and completely rebuilt to showroom condition. It has only put on a little over 200 miles since the engine was rebuilt, and the clutch was replaced just 50 miles ago. It has new seats and harnesses, fire extinguishers, brake discs and pads, the suspension has been fully rebuilt, the wheels powder-coated afresh.... top-notch, in other words. C&M Motors out of Omagh, Northern Ireland, has it listed on RallySales.com with an asking price of GBP159,500 – equivalent to just over $230k at current exchange rates. That would put it in contention as one of the most expensive Subarus we've ever seen, rivaling the $238k which Sports Car Market records as having been paid for another ex-McRae Impreza just this past October. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.