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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

2020 Subaru WRX STI S209 Prototype First Drive Review | The best is just for us

We're about 70 miles southwest of Tokyo on the grounds of Fuji International Speedway. Yoshihide Yano puts his hand on the camouflaged carbon fiber roof of the 2020 Subaru WRX STI S209 prototype we're about to drive and smiles. "This will never make a business case," says the assistant manager of Subaru's North America Business Planning Department. "We don't want to make more than 250. The more we make, the more money we lose." From the wince of his co-workers, Yano is clearly off the script, but his statement isn't a huge surprise. Building the STI S209 is complicated and time-consuming, with most of its extensive engine, suspension and aerodynamic modifications being installed by hand at STI's small off-site headquarters just outside Toyko. Founded in 1988, Subaru Technica International is the automaker's motorsports division and employs only 120 people. It can produce just two cars a day. Subaru STI Car Show View 30 Photos And why not show off your fastest street car ever on Fuji's world-class 2.8-mile road course? Especially today, while the track is packed for its annual STI Motorsports Day, a yearly pilgrimage for the brand's faithful. The place is flooded with WRXs, BRZs, and models we don't get in America like the Levorg STI Sport, a hot rod version of its mid-size wagon. Although STI's new Super GT and Nurburgring race cars are making hot laps on the main circuit, our drive of the inexplicably camouflaged S209 (which was fully revealed at the Detroit Auto Show) is on a small half-mile road course tucked away in a remote corner of Fuji's massive acreage. And we get just three laps. 2018 Subaru WRX STI S208 View 15 Photos STI's S-Line of cars have been the brand's most capable machines since the S201 launched in 2000, but the S209 will be the first S-Line model sold in the United States – and exclusively in the United States, for that matter. It will also be the first S-Line WRX that won't be powered by a modified version of the brand's venerable 2.0-liter EJ20 engine family, which Subaru introduced in 1989. The company says the EJ20 cannot meet emissions and make more than 300 horsepower on our low-octane fuel. The fix for this is a version of the turbocharged EJ25 series, which has powered every U.S.-spec WRX STI since we got it in 2003. To create the S209, STI's engineers started by mixing together certain parts from both the S208 and the 310-hp WRX STI RA Subaru sold in America last year.

2020 Subaru Legacy Review & Buying Guide | It's a sedan! And a good one

The 2020 Subaru Legacy is facing a very steep climb. Though redesigned and massively improved, it's still a sedan in an increasingly SUV world – and a sedan, no less, that has always struggled to attract shoppers away from the Honda Accord and Toyota Camry. Even within Subaru's own dealerships, it seems destined to gather dust while buyers gobble up the brand's four popular crossovers. But, who cares about popularity? The new Legacy is extremely good, benefiting from technological advancements and massive engineering upgrades for 2020 – including the welcome return of a turbocharged engine. It's better to drive, more comfortable, and easier to use, while maintaining its sterling safety reputation and standard all-wheel-drive system. Really, the Legacy has never been so appealing and competitive in the midsize sedan segment, even if its timing is a bit lousy. If you're among those happy to avoid the SUV trend, it is absolutely worth going against the grain. What's new for 2020? The Legacy is completely redesigned for 2020 – although it's a bit tough to tell by the styling. It adopts the same platform as other recently redesigned Subarus, most notably, the 2020 Outback that continues to be effectively a lifted Legacy wagon. Or, given their respective popularity, is the Legacy now a lowered Outback sedan? In any event, the two share virtually everything except their ride heights and trunk designs. That includes a substantially stiffer structure that contributes to improved handling, steering precision, ride comfort and safety; a mostly new base engine and the welcome return of a turbocharged four-cylinder as the engine upgrade; new accident avoidance tech; and an improved interior with nicer materials, a more attractive design and a massive 11.6-inch vertically oriented touchscreen in most trim levels. What's the interior and in-car technology like? Like the exterior, the Legacy's interior isn't as eye-pleasing as those of many rivals, but it's also better than before. It boasts better materials, including padded and stitched simulated leather on most surfaces up front that contributes to a far more upmarket look and feel. The top-of-the-line Touring XT trim level, pictured here, gets pretty swanky with its Tan Nappa Leather, and we like that Subaru didn't feel the need to spread fake wood trim about to make it seem more luxurious.