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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

2015 Subaru Outback priced at $24,895*

Just a few weeks after announcing the pricing for the 2015 Legacy sedan, Subaru is getting ready to roll out the all-new 2015 Outback with a base price $24,895, plus an $850 destination charge. Like its platform-mate, the styling could be described as an evolution of the previous generation, but the company claims big changes underneath to improve comfort. It's scheduled to starting hitting dealers this summer.
The Outback continues to share most of its mechanical bits with the Legacy, including its engines. The 2.5-liter boxer-four-cylinder gets a touch more potent with 175 horsepower and 174 pound-feet of torque, and better fuel economy at 25 miles per gallon city, 33 highway and 28 combined. The 3.6-liter flat-six-engine has 256 hp and 247 lb-ft and also sees a marginal economy improvement at 20/27/22. All models now come standard with a CVT, and Subaru's Symmetrical All-Wheel Drive gets some improvements with standard Hill Descent Control, Hill Start Assist, Active Torque Vectoring and X-Mode, a system to increase traction when needed.
The base 2.5i trim goes for $25,745 (all prices after destination), up $425 from last year's CVT base model. It comes standard with a 6.2-inch touchscreen infotainment system with a USB port and AUX input. The 2.5i Premium trim retails at $27,845, but the upgrade nets buyers dual climate zones, a 10-way power driver's seat, leather-wrapped steering wheel, all-weather package and a 7-inch infotainment system. The 2.5i Limited costs $30,845 and includes leather upholstery, 18-inch wheels, a 12-speaker stereo, heated rear seats, lane change assist, rear cross traffic alert and a power tailgate. The top The 3.6R Limited trim is $33,845 and in addition to the bigger engine features HID low-beam headlights and stainless steel dual exhaust tips.

Subaru puts China production on hold amidst slowing growth

Subaru's 2015 sales and production forecast estimates the Japanese brand to sell about 60,000 vehicles in China this year, a 10 percent rise. However, a recent decision not to build a factory there might make future growth more difficult. Given the changing state of the market, the automaker doesn't seem concerned by the potentially lost sales. According to Bloomberg, even if the Chinese government gave permission for Subaru to build its planned joint venture factory with Chery, the Japanese brand would not take advantage of it. "Since the profits are split with your partner, you would have to double the sales to maintain the profits you earn by exporting from Japan," said Akira Mabuchi, the company's executive in charge of China, according to Bloomberg. Subaru is in the odd position of being the only major Japanese automaker without a joint venture partner to build cars in China, but the massive year-over-year growth there seems to be slowing. Auto sales in China were up 6.9 percent in 2014, according to Bloomberg, compared to 14 percent in 2013. Also, Chinese consumers have been famously averse to buying Japanese vehicles with only half of the consumers there even willing to purchase one. Instead, the company is focusing on the US market, according to Bloomberg. The decision makes sense. While Subie's sales in China shrunk 2 percent in 2014 to about 55,000 vehicles, the company grew 21 percent in the US to 514,000 units. The automaker already has plans to add capacity to its factory in Indiana. News Source: BloombergImage Credit: Jae C. Hong / AP Photo Plants/Manufacturing Subaru