2005 Subaru Forester X Wagon 4-door 2.5l on 2040-cars

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How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.

Why I chose a Subaru WRX over a BRZ

It was early 2012, and I was ready to get a new car. Not just any car, but the car I had dreamed about for no less than a decade: the Subaru Impreza WRX. There was something about this car that always appealed to me, even before the WRX was sold stateside; originally it was the Impreza 2.5RS that caught my eye. What was so special about the WRX? Well, I loved the idea of having a small car with all-wheel drive and good power, all in a relatively affordable package. It was one car that could do it all. Oh, and that fresh rally blue paint and signature boxer rumble were easy on the eyes and ears. It was a long time coming. I was just about ready to place an order with my Subaru dealer. But wait. What's this? A new kid on the block. Subaru was releasing its long-time-coming, rear-wheel-drive sports car: the BRZ. I was enticed early on when it was announced that Toyota and Subaru would jointly develop a lightweight sports car, and my interest was piqued once I saw the beautiful FT-86 concept. Now I kind of had a tough choice. I still wanted the WRX, but also liked the idea of having a proper sports car with a low center of gravity and low weight. Very different cars, I know, but both offered the fun I craved. I didn't get to drive a BRZ, but I did sit in one and enjoyed the low seating position and crisp feel of the shifter. I could tell it was one car that would feel connected to the road, a true driver's car. After some deliberation and research, I ended up ordering the WRX, my original goal. Why? For one thing, the BRZ was so new that I couldn't get invoice pricing. Plus, with the winters here in Chicago, I really wanted AWD; I was pretty much tired of FWD, and didn't want to risk driving RWD in snowy/icy conditions. Further, the WRX provided usable back seats and plenty of cargo space in the hatchback version (which is the one I chose). To top it off, I loved the power I'd get with the WRX, even though it wouldn't handle quite like the low-slung BRZ. Long story short, it came down to what I mentioned earlier: one car that could do it all. The WRX is a jack of all trades. It offers a nice blend of performance and practicality. Do I have any regrets? Not at all. If my financial situation allowed for it, I would love to have an AWD daily driver and a RWD sports car for occasional use (either a BRZ, MX-5, or S2000), but since I could only afford one vehicle, the WRX was the right choice for me. I liked it so much, in fact, that I upgraded to a 2016 WRX.

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