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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

2017 Subaru BRZ gets more power, optional Performance Pack

Most of the recent action with Toyobaru sports cars has centered around the Toyota side, which saw the Scion FR-S replaced by the updated and rebranded 2017 Toyota 86 for our market. Now, Subaru's version of the rear-drive coupe is getting a similar set of updates. It gets to keep its name, though. Like its Toyota-badged twin, the BRZ sees some engine updates – changes to the shared 2.0-liter, flat-four's internals are aimed at reducing friction. A new aluminum intake and a redesigned exhaust bump output up from 200 horsepower and 151 pound-feet of torque to 205 ponies and 156 lb-ft on manual-transmission models. To go along with that, the manual's final-drive ratio has been changed from 4.1:1 to 4.3:1, so there should be an improvement in acceleration. (Incidentally, this must have been Toyota meant when it said the 86 gets different manual gear ratios for 2017.) It's not the turbocharged engine some have been craving, but we can all agree that a little extra output is better than none. Those paying for the automatic transmission are left out, though. The Subaru has also gotten a small set of suspension updates. There are new springs and dampers, a larger rear sway bar, and some adjustments to structural braces to increase rigidity, so nothing too dramatic. Subaru has reprogrammed the stability-control system to allow drivers more freedom, which has led to a showy rebranding of the Sport mode to a new Track setting. A new option is the Performance Package, which includes Brembo brakes with upsized rotors fore and aft, new Sachs-branded shocks, and black 17-inch wheels. The Performance Pack is only available on Limited models with a manual transmission, further strengthening the argument against the auto. The Performance Pack also helps differentiate the Subie from its Toyota pal, as those items aren't available on the 86. There are some subtle aesthetic changes too, similar to those on the 86. (Noticing a pattern?) Subaru restyled the front and rear fascias, and added LED lamps at all four corners. Limited models come with a new 4.2-inch LCD display that sits to the right of the tachometer; in addition to mechanical info like oil temp, water temp, and battery voltage, it can show a G meter, a steering-angle indicator, gas/brake meters, and a stopwatch. The 2017 BRZ Premium and Limited will hit dealers in September. You'll have to wait until winter of 2017 to get your hands on a car equipped with the Performance Pack.

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.