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Japan could consolidate to three automakers by 2020

Sergio Marchionne might see his dream of big mergers in the auto industry become a reality, and an analyst thinks Japan is a likely place for consolidation to happen. Takaki Nakanishi from Jefferies Group LLC tells Bloomberg the country's car market could combine to just three or fewer major players by 2020, from seven today. "To have one or two carmakers in a country is not only natural, but also helpful to their competitiveness," Nakanishi told Bloomberg. "Japan has just too many and the resources have been too spread out. It's a natural trend to consolidate and reduce some of the wasted resources." Nakanishi's argument echoes Marchionne's reasons to push for a merger between FCA and General Motors. Automakers spend billions on research and development, but their competitors also invest money to create the same solutions. Consolidating could conceivably put that R&D money into new avenues. "In today's global marketplace, it is increasingly difficult for automakers to compete in lower volume segments like sports cars, hydrogen fuel cells, or electrified vehicles on their own," Ed Kim, vice president of Industry Analysis at AutoPacific, told Autoblog. Even without mergers, these are the areas where Japanese automakers already have partners for development. Kim cited examples like Toyota and Subaru's work on the BRZ and FR-S and its collaboration with BMW on a forthcoming sports car. Honda and GM have also reportedly deepened their cooperation on green car tech. After Toyota's recent buyout of previous partner Daihatsu, Nakanishi agrees with rumors that the automotive giant could next pursue Suzuki. He sees them like a courting couple. "For Suzuki, it's like they're just starting to exchange diaries and have yet to hold hands. When Toyota's starts to hold 5 percent of Suzuki's shares, this will be like finally touching fingertips," Nakanishi told Bloomberg. "I absolutely do believe that we are not finished seeing consolidation in Japan," Kim told Autoblog. Rising development costs to meet tougher emissions regulations make it hard for minor players in the market to remain competitive. "The smaller automakers like Suzuki, Mazda, and Mitsubishi are challenged to make it on their own in the global marketplace. Consolidation for them may be inevitable." Related Video:

Suzuki recalling 2,800 XL7 models over faulty fuel pump

A recall has been issued for the 2007 Suzuki XL7, but only those vehicles either bought or registered in four states: Texas, Arizona, California and Nevada. Potentially 2,380 of the SUVs manufactured from June 13, 2006 to December 22, 2006 could have an issue with their fuel pump modules: The plastic supply or return port could crack. If that happens, it could lead to a fuel leak and then to a fire.
Suzuki hasn't said when the recall will begin. Once it does, owners will be notified and can have their dealers make the necessary repairs free of charge. There's a bulletin from the National Highway Traffic Safety Administration below with more information.

Mazda, Suzuki, Yamaha — more vehicle data fabrication found in Japan

TOKYO — Mazda, Suzuki and Yamaha improperly tested vehicles for fuel economy and emissions, the Japanese government said on Thursday, revealing fresh cases of compliance failures by manufacturers. The results came to light after the Japanese government had ordered the automakers to check their operations after revelations of improper testing at Subaru and Nissan last year. The conduct of automakers globally has come under intense scrutiny after Germany's Volkswagen AG admitted in 2015 to installing secret software in hundreds of thousands of U.S. diesel cars to cheat exhaust emissions tests, and that as many as 11 million vehicles could have similar software installed worldwide. In the Japanese cases, the carmakers have not broken any laws or prompted massive recalls. But a growing list of improprieties has tarnished the image of the country's manufacturing industry for high-quality products and efficiency. Suzuki, Mazda and Yamaha cleared vehicles for emissions or fuel efficiency even in cases where they were tested under invalid conditions, the ministry said in a statement. The errors related to slight deviations in the speed of the vehicles during testing that should have invalidated the test results. The automakers examined tests they had conducted over different periods of time, and in Suzuki's case they stretched back to 2012. None of the automakers found significant problems with actual emissions and fuel economy performance of the vehicles, which were destined for sale in Japan, and do not plan any recalls. Suzuki, Japan's fourth-largest automaker, said that of 12,819 sample vehicles tested for fuel economy and emissions since June 2012, around 50 percent of them had been inspected improperly. "I deeply apologize and will lead efforts to prevent recurrence," Suzuki Chief Executive Toshihiro Suzuki told a news conference. Mazda said there were irregularities in 4 percent of similar inspections on its cars, or just over 70 vehicles. In Yamaha's case, irregularities were found in 2 percent of inspections, or just a handful of vehicles. Both Mazda and Yamaha apologized. Suzuki and Yamaha shares fell 6 and 5 percent, respectively, and Mazda shares were down 1 percent, underperforming a steady benchmark Nikkei average. In July this year, Nissan admitted it had improperly measured exhaust emissions and fuel economy for 19 vehicle models sold in Japan.