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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

A closer look at the 2015 Subaru WRX

For enthusiasts, the debut of the 2015 Subaru WRX was arguably one of the more important happenings at last week's LA Auto Show. After all, the 'Rex has been one of our perennial favorite all-weather sports cars, able to offer big thrills in any clime thanks to its turbocharged engine, manual gearbox and top-notch all-wheel-drive system.
For 2015, some big changes have been made to our favorite Subie, including the removal of the hatchback body style and availability of a continuously variable transmission. Of course, there's also the new, 2.0-liter turbocharged inline four-cylinder engine, not to mention the completely revised styling.
Lots of talking points, for sure, so West Coast Editor Michael Harley chatted with Dominick Infante, national manager of product communications for Subaru USA, who promises us that this car will be the "best-handling WRX ever." As for that CVT, Infante assures us that it was "designed for a sports car" and that the company aims to change the minds of people (like us, admittedly) who have a hard time warming up to the idea of this transmission in a package like the WRX.

This Subaru BRZ has a snowmobile engine and gets 104 mpg

A hybrid powertrain didn't win the Honda CR-Z numerous fans, but it might be the magic ingredient in making the Subaru BRZ more potent. This is the "Car of the Future" as envisioned by Mississippi State University's Center of Advanced Vehicular Systems – the result of a two-year project, which married a front-mounted 850 cc snowmobile engine with two electric motors powering the rear wheels. The battery pack accounts for 12.7 kWh, which enables the car to go 50 miles on just electric juice. The two-liter boxer engine is no more, but what the car loses in cubic inches it gains in MPG. According to MSU engineers, the re-engineered car gets 104 mpg equivalent, and it only weighs 2,904 lbs: about 60 lbs more than an unmodified Sportshift BRZ. It clocks a 0-60 mph run at around 5.7 seconds, too, which beats a stock automatic BRZ by a second. The electric brain of the car improves the range by calculating optimizing algorithms, based on earlier driving. The guys from MSU's Bagley College of Engineering call this Predictive Engine Control. The most likable thing about this project might be that it's still clothed in a sports car body. Future-proof car designs are often focused on mobility instead of the driver, and choosing a BRZ as the basis shows how there's still room for petrolheads in the future.