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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

Weekly Recap: Bentley Bentayga leads luxury SUV charge at Frankfurt

The Bentley Bentayga is launching a new era of ultra high-end sport utility vehicles that will see luxury makers vie for the world's richest and most exclusive customers. The Bentayga is Bentley's first SUV, and it will formally debut next week at the Frankfurt Motor Show. It's loaded with Bentley's best technology and features, led by a 600-horsepower W12 engine. The mission is simple: stop giving up sales to other companies by not having an SUV in its portfolio. "It creates an entirely new category of ultra-luxury SUV, where there are currently few rivals," IHS Automotive analyst Ian Fletcher said in a report. But Bentley and the Bentayga will soon face stiff competition. Archrival Rolls-Royce will produce its own crossover to be built in England, though timing is unclear. Lamborghini has approved plans for a ute that will be assembled in Italy and launch in 2018. Even the sportier British brands are getting into the market. Aston Martin will make a crossover version of the DBX concept shown earlier this year in Geneva, and Jaguar is launching the F-Pace crossover, which will debut in Frankfurt. These new entries will invigorate a segment that's comprised of the Mercedes G63 AMG and the Land Rover Range Rover SV Autobiography, and Bentley is poised to grab a large share of it, Fletcher noted. IHS forecasts Bentayga sales could hit 3,000 units per year in 2017 and 2018, pushing total Bentley sales to more than 10,000 in the next few years. The vehicle will also get plug-in hybrid and diesel variants to widen its reach. The Bentayga is a sales grab, for sure, but Bentley took care to ensure the SUV remained true to the brand. It's laden with the top-shelf wood, leather, and metal, and it comes standard with an expansive panoramic glass roof. It also has intelligent features like electronic night vision and an optional responsive off-road system that can be configured to adapt to eight different settings. It's a different kind of Bentley, but it's a harbinger of things to come for the world's richest luxury makers. Other News & Notes Toyota debuts next-gen Prius Toyota revealed the next-generation of its iconic fuel-sipping hybrid, the 2016 Prius, at an event in Las Vegas. The car promises 10-percent gains in fuel efficiency, though actual figures – and even powertrain specifics – were not revealed. We estimate that could mean about 56 miles per gallon in city driving and 53 on the highway.

Toyota Recalling 1.67 Million Vehicles Worldwide

UPDATE: Toyota is now announcing specifically which models are covered under its fuel pipe recall in the US. The company is repairing about 423,000 Lexus models that include the 2007-2010 LS, 2006-2011 GS, 2006-2011 IS, 2010 IS C and 2008-2010 IS-F. The automaker says that it isn't aware of any fires, crashes, injuries or fatalities caused by this problem. According to Toyota, the recall is because it's possible for the fuel delivery pipes and the fuel pressure sensor to form a bad seal with the gasket between them because of a protective coating protecting against corrosion on the pipes. It's possible for this to eventually cause a fuel leak, and obviously in a hot engine bay that's a potential fire risk. To fix the problem, dealers will replace the gasket and repair the gasket seating surface between the fuel delivery pipe and the fuel pressure sensor. The company will begin notifying owners soon. You can find the official press release, below. Toyota is issuing three separate recalls covering 1.67 million vehicles worldwide with most of those models in Japan. It looks like the campaigns' impact on the US may be smaller, though. According to Reuters, Toyota isn't aware of any accidents, injuries or fatalities affecting the models. Some yet-unnamed Lexus models might also be affected. The largest of the campaigns does not currently affect any US-market vehicles. About 802,000 units of the Toyota Crown Majesta, Crown, Noah and Voxy in Japan are being repaired to replace a seal that could leak in the brake master cylinder. Those already leaking get a new brake booster, as well, according to Reuters. The only recall currently believed to affect the US is due to a problem covering approximately 759,000 vehicles with 423,000 of them here. The repair is to fix a faulty fuel delivery pipe that could cause a fire if the fuel leaks out. Unfortunately, we don't know which models it covers. Autoblog spoke to Toyota spokesperson Mona Richard and was told the information was still "under embargo." When exactly that embargo will lift isn't yet known, but we're on the case. Finally, Toyota is recalling 190,000 Corolla Rumion and Auris models in Japan for a faulty evaporative emission control unit. Autoblog is in contact with Toyota, and we'll update this story as soon as we know more about its affect on the US market.