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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

Subaru mulling expanding Indiana plant for Forester, Impreza

Thanks to currency fluctuations and their impact on the bottom line, a growing number of Japanese automakers are starting to increase vehicle production in the US, and it appears Subaru could be the next to do so. According to Bloomberg, Subaru is looking into expanding production capacity at its Lafayette, Indiana assembly plant, which currently builds the Outback, Legacy and Tribeca as well as the Toyota Camry.
Subaru's Indiana plant currently has an annual maximum capacity of 310,000 units, but the automaker is expecting to far exceed that figure this year, with year-to-date sales of 299,788 units through November (not including Camry) - an increase of almost 30 percent over 2011. The report indicates that Subaru could expand the plant to add as many 50,000 additional units to the plant, likely in the form of either the Forester or Impreza.

2015 Subaru Legacy is fresh-faced and more frugal

While Subaru posted its best sales year ever in the United States in 2013, over half of its sales came from the success of the new Forester and popularity of the Outback. Its midsize Legacy sedan, on the other hand, saw sales tumble 10.3 percent. The company known for its all-wheel drive models hopes to right that trajectory with the 2015 Legacy. The all-new sedan sees a slight bump in fuel economy and a commitment to giving buyers a better product to compete against segment stalwarts like the Honda Accord and Toyota Camry.
The refreshed sedan wears Subaru's new design language, which was teased by the Legacy Concept at the 2013 Los Angeles Auto Show. However, the production version takes the hard, crisp lines down several notches, and it is bordering on boring at first glance. The best detail of the new design is the new hexagonal shield grille at the front that lends a little upscale panache over the current car's simple, rectangular front end. The coupe-like roofline has also been toned down from the concept, but it does smooth out the rear better than the current gen.
The Legacy's engines are carried over almost identically from last year's car. However both flavors of manual transmission are finally bowing out; all models now come with Subaru's Lineartronic CVT. Output from the 2.5-liter boxer four-cylinder sees a slight bump to 175 horsepower (2 hp more than last year's model) and 174 pound-feet of torque. The 3.6-liter boxer six-cylinder is unchanged at 256 hp and 247 lb-ft. Fuel economy benefits from the new platform with the 2.5-liter model rated at an estimated 26/36/30 miles per gallon city/highway/combined, a boost of 2/4/3 mpg, respectively, over the previous generation. The 3.6-liter also sees a modest rise to 20/28/23 mpg, 2/3/3 mpg better respectively. Fairly impressive figures for an all-wheel-drive, midsize sedan.