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Subaru posts 15.7% rise in fill-year operating profit

TOKYO — Subaru on Monday posted a 15.7% rise in annual operating profit in the fiscal year that ended in March as it recovered from a raft of product recalls last year, but warned that sales of its cars would take a hit from the coronavirus outbreak. Profit rose to 210.3 billion yen ($1.96 billion) for the year just ended, from 181.7 billion yen a year earlier under international financial reporting standards. It exceeded a consensus estimate of 204.7 billion yen profit drawn from 17 analysts polled by Refinitiv. Global automakers are struggling to recover from the coronavirus, which has pummeled car sales as shelter-in-place orders in many countries clobbered car demand, while plant workers had been left unable to commute to work. Though Subaru and its rivals have begun to restart vehicle factories, anaemic demand, supply chain disruption and social distancing measures at factories are expected to limit output in the coming months. "We saw a limited impact of the coronavirus on our results for the year just ended," Chief Executive Tomomi Nakamura told a teleconference. "But although we have resumed production this month, we are only operating one shift in Japan, and the pace of U.S. output has slowed significantly ... we see many uncertainties related to the virus." As a result, the maker of the Outback and Forester SUV crossovers declined to give an earnings forecast for the current business year, while it slashed its year-end dividend for the year just ended by 61% to 28 yen per share. Some analysts believe industry-wide global auto sales could slump by a third this year and that any recovery will be slow and patchy as job losses and reduced incomes weigh on consumer spending. Subaru, which earns two-thirds of its vehicle sales from the United States, acknowledged that it may take a hit in the coming months as its biggest market struggles get the coronavirus pandemic under control. The automaker saw a 3% rise in global vehicle sales in the year to March to 1.03 million units, bouncing back from last year, when a defective steering component and measures to improve inspection tests had stopped output for two weeks at its sole assembly plant in Japan. The process to restart its U.S. plants would take time, Subaru said, and it expects to produce only around 5,000 units this month, a fraction of last year's 40,000. The virus would result in a global production hit of around 150,000 units, it added.

Kayaba, Sumitomo to pay millions for price-fixing in US

Kayaba Industry Co, which does business in the US as suspension parts maker KYB, and Sumitomo Electric Industries are facing payments in the millions to settle price-fixing cases about the components that they make. As part of the Department of Justice's ongoing crackdown of price fixing in the auto industry, KYB agreed to pay $62 million and pleaded guilty to conspiracy to set the cost of shock absorbers from the mid '90s through 2012. The company allegedly worked with co-conspirators to keep the cost of the parts high, and those components then made it into vehicles from Honda, Kawasaki, Nissan, Subaru, Suzuki, and Toyota. "Any collusive agreement among competitors to restrict price competition undercuts our free enterprise system and violates the law," said Carter M. Stewart, US Attorney of the Southern District of Ohio, in the DoJ's announcement. Over the past few years, the DoJ has brought cases against 37 parts suppliers and 55 executives, leading to over $2.6 billion in fines. The investigations haven't always been so successful – some of the Japanese execs fled from the US to avoid prosecution. Critics allege that price fixing is simply how business is done. According to Automotive News, Sumitomo Electric Industries is also facing a $50 million settlement in a civil lawsuit that's related to price fixing of parts like wiring harnesses and heater control panels. The plaintiffs include owners and dealers that purchased vehicles with these parts. The company asserts that the violations are from before 2010, and it now has different process in place to avoid further violations. KYB Agrees to Plead Guilty and Pay $62 Million Criminal Fine for Fixing Price of Shock Absorbers Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) has agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers. According to charges filed today, KYB conspired from the mid-1990s until 2012 to fix the prices of shock absorbers sold to Fuji Heavy Industries Ltd. (manufacturer of Subaru vehicles), Honda Motor Co. Ltd., Kawasaki Heavy Industries Ltd., Nissan Motor Company Ltd., Suzuki Motor Corporation and Toyota Motor Company, including their subsidiaries in the United States.

We race a 2019 Subaru WRX STI up the Shelsley Walsh Hill Climb

SHELSLEY WALSH, U.K. — Keep your foot down, I tell myself. Easier said than done in a 2019 Subaru WRX STI on the narrow and treacherous Shelsley Walsh Hill Climb. Right away, thereÂ’s a very hairy fast left sweeper the STI takes in third gear, leading into another left that requires even more bravery: lifting just before entry without braking. The STIÂ’s all-wheel drive helps to pull us up and out of the corner, on the way to the fast straightaway up a steep hill. Abrupt berms, vegetation and walls line the right side, while the left has a poor excuse for a guardrail and a long drop past that. The road itself is extremely narrow – only big enough for one STI at a time – but smooth, picturesque. The prototypical meandering British B-road. An obligatory herd of sheep mill about in the distance partway up the hill, and a few cows watch the STI careen over the finish line.  This is the essence of the British hillclimb, an archaic form of motorsport that has survived to this day. In this pastoral setting, Shelsley Walsh happens to be the oldest continuously running (well, save a break for two world wars) hill climb event in the world, with the first official event being held August 12, 1905. It is, like many British hillclimb courses, almost comically short – just over half a mile, so thereÂ’s not much to memorize. Cars from the early 1900s (when it was still paved with stone) struggled to even make it to the top. Part of that struggle can be attributed to the rule that you must race with a full car of passengers, no less than the number of seats available. Besides that, cars just werenÂ’t very powerful back then, and Shelsley is a steep course. It peaks at a 16 percent grade. The course record belongs to a Gould GR55 NME open-wheel single-seater racecar at just 22.58 seconds. I managed to break into the mid 37s for my fastest run in the STI, but there was still a fair bit of time to be had in the course. Car preservation was much more important than chasing lap records — it was an hour drive back to our lodging that night, and the STI was our ride. There were two flavors of Subarus available to us for the hillclimb, and motoring around the British countryside after. One was the regular WRX STI, and the other was the shockingly expensive (and limited to 500 examples, long sold by now) Type RA. All the minor tweaks and upgrades made a tiny, tangible difference in my hill climb times.