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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.

Fernando Alonso reportedly will race for Toyota at Le Mans

When it was recently announced that Fernando Alonso would race in the 24 Hours of Daytona in January, it was described as a warm-up for an eventual attempt to win Le Mans. "Eventual" may come pretty fast: It now looks like the Formula One champion will race in the Le Mans 24 Hours next season as well. Or so reports BBC Sport, which says he'll race for Toyota. But wait, there's more: The BBC also says he's in talks with Toyota to drive most of the entire World Endurance Championship — while keeping his day job driving for McLaren in F1. "Le Mans is agreed," a source close to Toyota told the BBC. "The rest of the season is still being negotiated, but it looks like he will do most of the races." BBC's sources say Alonso will drive a Toyota WEC car in the season's last race, in Bahrain on Nov. 19, to get his feet wet. The season's final Formula One race is the Abu Dhabi Grand Prix on Nov. 26. Neither Alonso nor Toyota would confirm an impending deal. Alonso said at practice for this weekend's Brazilian Grand Prix: "So far, nothing to comment. We will see. Just rumors." What's motivating him is this: He's 36 years old and is intent on becoming only the second driver, after Briton Graham Hill, to win motorsport's Triple Crown. That entails winning the Formula One title (or just the Monaco Grand Prix according to one interpretation) as well as Indianapolis and Le Mans. He has won Monaco as well as the 2004 and 2005 world titles. He recently signed a contract extension keeping him at McLaren in 2018. As for the Indy piece of the Triple Crown, Alonso famously raced there this year and was running competitively when his Honda engine failed in the closing stages of the race. So expect to see him there again as well. Racing with Toyota at Le Mans and other endurance races should give him better luck than he had this season with McLaren-Honda in F1 and at Indy. Though Toyota has never won Le Mans, it is known to be developing a new WEC car. Traveling the globe to race in both the WEC and F1 in the same season sounds grueling, but it might be possible. The circuits have provisional schedules, and there's just one conflict — the U.S. Grand Prix and a WEC race in Japan are both penciled in for Oct. 21. But McLaren sounds none too keen on him doing the whole WEC schedule. McLaren racing director Eric Boullier told the BBC: "He has said he is keen to do some races outside. There is a case-by-case discussion. His main and first focus is F1, so that has to be the priority.

Senator pushes for up to life sentence for auto execs found to delay recalls

Democratic Senator Claire McCaskill (shown above) has had it with automotive execs stalling when it comes to recalls. The Missiourian has proposed a new bill, the Motor Vehicle and Highway Safety Enhancement Act, which aims to improve the automotive safety following the high-profile fiascos involving General Motors and Toyota. Aside from a doubling of the budget for the National Highway Traffic Safety Administration over the next six years and the removal of the $35-million limit for fining automakers, the plan includes a provision that would punish auto executives if it's discovered they knowingly delayed recalls. How will it punish them, you ask? Oh, you know, just life in prison. The bill "gives federal prosecutors greater discretion to bring criminal prosecutions for auto safety violations and increases the possible penalties, including up to life in prison for violations that result in death," McCaskill's office told The Detroit News. If a delayed recall led to serious injuries, meanwhile, execs could still face a 15-year stint behind bars. As for that change in the fine structure for automakers, the removal of the limit is complemented by a hefty increase in the per-vehicle fine, from $5,000 to $25,000. With this change, GM could have been on the hook for $55 billion (with a "b") in fines for its bumbling of the ignition switch recall, rather than just $35 million. The News says, though, that NHTSA has "wide discretion" in handing out the fines. Considering a $55-billion fine is enough to sink any automaker, it is unlikely that such a monumental sum would be handed out. Still, the potential threat of such a death sentence should be enough for any automaker to sit up and take notice. "With millions of Americans behind the wheel every day, and more than 33,000 killed on our roads each year, we've got to do more to keep our cars and the roads we drive them on safe," McCaskill said, according to The News. "Painful recent examples at Toyota and GM have shown us we also must make it easier to hold accountable those who jeopardize consumers' safety. For too long, auto safety resources have remained virtually stagnant while cars and the safety challenges they present have become more complex." What do you think? Do you agree with McCaskill's proposed bill? Should the punishments for automakers and execs be more or less harsh? Have your say in Comments. News Source: The Detroit NewsImage Credit: J.