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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

Toyota sudden acceleration class action may cover 22 million owners

A total of 22.6 million current and former Toyota owners have been sent notices that they may be eligible to receive compensation from the automaker for damages related to the unintended acceleration fiasco that has dominated headlines in 2009 and 2010. The total payout may be as high as $1.63 billion, according to The Detroit News.
Steve Berman, a lawyer for the owners, calls the potential deal "a landmark, if not a record, settlement in automobile defects class action litigation in the United States." Still, there's some debate about whether or not Toyota's proposed settlement is fair, as it includes $30 million for safety research and driver education programs - in other words, Toyota seems to be suggesting that drivers need more education on how to drive their correctly working and fully functional vehicles. For those keeping track, Toyota would also be paying lawyer fees of $200 million.
A US District Judge in California is scheduled to hold a so-called "fairness hearing" on June 14 that could decide the fate of this particular settlement. Further courtroom wrangling will be required to hash out any wrongful death suits levied against Toyota stemming from unintended acceleration claims, as those are not part of this class-action suit.

Toyota FT-86 Open Concept leaves us feeling flushed

When last we checked in on our topless would-be hero, the Toyota FT-86 convertible had been reportedly placed on "indefinite hold." That was back in early October, not long after Toyota had trotted out the rear-wheel-drive canvasback to Scion dealers as a possible future product carrot if they decided not to turn in their franchises. And yet, we're here at the Tokyo Motor Show, where Toyota has taken the time to at least repaint the FT-86 Open Concept in "Flash Red," if not build a whole other car (the original Geneva showcar was white). It's enough to make our heads spin like a teenager on the verge of a breakup. Will they? Won't they?
At this point, we still don't know any more than you do - the last word we heard out of Toyota was not encouraging, although the story was that the program could still be fast-tracked if management had a change of heart. As the car has never been seen before in Japan, perhaps Toyota is merely extending its domestic audience a courtesy view before it lines this showcar in mothballs, or maybe they're still trying to make a decision on its fate and gauging public reaction on the homefront.
Interestingly, in a new story published today, Automotive News quotes Subaru brand boss Yasuyuki Yoshinaga downplaying the likelihood of a production model, saying flatly "We make the car, so if we don't make it, it can't happen." The executive went on to note, "Our engineering department told me that losing the entire roof requires a complete redesign of the structure. It would need a big change." Given that such a car would probably trade in rather small volumes, that sounds like a significant hurtle.