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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

205k Suzuki models being investigated for airbag sensor issue

The Detroit News is reporting that the National Highway Traffic Safety Administration has opened an investigation on the 2006-11 Suzuki Grand Vitara and 2007-11 Suzuki SX4 due to issues with the airbag and seatbelt for the front passenger seat. So far, NHTSA has received 128 complaints on these vehicles for airbag warning lights, airbag off lights and seatbelt lights, on a vehicle set that totals around 205,000 units, but there is no indication as to how many, if any, injuries have reported.
Via technical service bulletins, Suzuki has already acknowledged two airbag-related issues with front passenger seats on both vehicles, including a programming error for the passenger seat load indicator on 2009 models and an open-circuit problem for the sensor mat that determines if an adult or child is sitting in the front seat. Since this latter issue would not shut off or lessen the impact of the passenger airbag, Suzuki has already extended the warranty for the seat cushion bottom to 10 years or 120,000 miles. After ceasing new-car sales in the US and Canada, potential recall repairs (which still may or may not happen) would be handled by remaining dealers as laid out in the recent court-approved bankruptcy plan.

Suzuki heads rolling over fuel economy scandal

Suzuki Motor Corporation executives admitted last month that the company had been falsifying fuel-economy tests for some of its vehicles. Today, it was announced that chairman Osamu Suzuki will not become CEO and executive vice president Osamu Honda will step down from his position at the next shareholder meeting, which takes place June 29. Executive bonuses for 2015 will also be eliminated or cut in half. The company is also promising to change its corporate culture so as to allow whistle blowers to get their messages heard. "Suzuki has a top-down culture and it's been difficult for voices from lower down to go to the management," Toshihiro Suzuki (Osamu's son) told reporters, according to Bloomberg. Both Suzuki family members will take a pay cut for the last half of 2016 (Osamu at 40 percent, Toshihiro at 30). Over 2 million Suzuki vehicles were involved in the fuel economy fakery. Japan's transport ministry is taking a closer look at company-submitted data after Mitsubishi and then Suzuki were found to have misled regulators and the public. Related Video: News Source: BloombergImage Credit: KAZUHIRO NOGI/AFP/Getty Images Government/Legal Green Hirings/Firings/Layoffs Suzuki Fuel Efficiency resignation osamu suzuki