Articles by Aaron Back

In the three months to June 30, net profit was up 94 per cent from a year earlier even though vehicle sales were down 1.6 per cent.How did Toyota do it? The company says the weaker yen accounts for 84 per cent of a Y=310.2 billion ($3.5bn) increase in operating profit. The rest was due to cost cutting.Toyota is benefiting from a decision to keep more production at home than its major Japanese rivals when the yen was strong. In the last fiscal year, 21 per cent of the vehicles Toyota sold globally were exported from Japan, compared with 13 per cent for Nissan and 4 per cent for Honda, Nomura says.That means Toyota now has an advantage over its rivals because proportionately less of its production costs are in foreign currencies that have strengthened against the yen. It's a big reason rivals have shown less impressive gains. For the June quarter, Nissan reported a 23 per cent rise in operating profit; Honda, 5.1 per cent.Still, Toyota's home bias could become a disadvantage. About a quarter of Toyota's sales in the June quarter were in Japan -- compared with 16 per cent of Honda's and 12 per cent of Nissan's. That's a concern because domestic demand has been falling since a subsidy program for car buyers ended last September.Total vehicle sales in Japan for the first seven months of 2013 were down 12 per cent from a year earlier, according to the Japan Auto Dealers Association.In contrast, the US is a hot market at the moment, with vehicle sales up 8.5 per cent in the first seven months of the year, according to Autodata. But in the June quarter just 31 per cent of Toyota's sales were in North America, compared with 34 per cent of Nissan's and a thumping 53 per cent of Honda's.China, the world's fastest-growing car sales market, is a problem because of continuing diplomatic tensions between Tokyo and Beijing. All three major Japanese carmakers had lower China sales in the first half.Still, Toyota can get more mileage out of the weaker yen. The company forecasts a 54 per cent rise in net profit for the year ending March 30 based on the yen at 92 to the dollar -- and the Japanese currency has been much weaker than that for months.So far, Toyota's produced stellar earnings growth without selling more cars. But the weaker yen also means Toyota has the chance to produce cars in Japan at a more competitive cost, which could boost volume sales growth too. 

SUBARU'S Impreza XV (remember that one?) is no more. Instead, and as early as from January, a revamped version of the compact crossover will be sold in Australia simply as the Subaru XV. Despite the dropping of the Impreza prefix, the new stand-alone XV retains very much of the small car's DNA, using the same platform and drivetrain, which includes stop-start technology.It's a cleaner design than the existing Impreza XV, itself still a `new' vehicle, and has new generation touches such as `hawk-eye' headlights and a wide hexagonal grille. In the family pecking order it will sit just below the Forester and set its sights on rivals such as Mitsubishi ASX, Hyundai ix35, Kia Sportage and Nissan Dualis.But unlike the opposition it will not offer a 2WD version. All models will run on Subaru's all-wheel-drive system.THE LINEUPXVs will come in three spec levels: 2.0i, 2.0i-L and 2.0i-S  all with soft-touch finishes, uprated instrumentation, new interiors and seven airbags. The 2.0i has a reversing camera, comprehensive multi-function display, cruise control, steering wheel-mounted paddle shifters for the CVT variants, Bluetooth connectivity and audio streaming, auto air-con and black roof rails.The 2.0-L adds an electric sunroof, dual-zone air-con, SatNav with SMS voice text and voice control, and rear privacy glass and the premium S model has the luxury of leather trim, eight-way adjustable driver's seat, heated front seats, alloy pedals, silver roof rails and HID Xenon headlightsPRACTICALITIESThe XV, at 220mm, has more ground clearance than most, which makes it easy to get in and out of and allows it adventurous owners to clamber over rough terrain. It's also quite sleek, with its roofline just 1615mm from the ground, making it more aerodynamic.It seats four, five at a squeeze, and there's generous head and legroom. But cargo room is a bit tight  even smaller than in the Impreza hatch. There's just 310litres of space if all seats are occupied. If the back ones are folded flat, cargo room increases more than three-fold.Outside, there's neat, thin plastic wheel-arch cladding, which one engineer described as `comparing sports shoe trim with a wet weather boot' in reference to the chunky cladding of some other brands. The XV also has a set of funky wheels: 17-inch machined black alloys. And the body colours include an in-your-face tangerine, which would probably make Dutch drivers delirious.TECHNOLOGYThe motor is the same 110kW/196Nm 2.0-litre as used in the new Impreza, which will arrive in Oz about two months after the XV, and transmission is a choice of six-speed manual or stepless CVT. The hi-tech' all-new boxer engine uses lots of light materials, variable valve timing and peripherals like electric power steering and a stop-start system to cut fuel use by around 20 per cent. Subaru says the XV will average 7.0 litres/100km, (7.3 for the manual) which will give it a cruising range of about 850km.DRIVINGWe drove an XV on Subaru's tight varied-surface track and also on its long, banked circuit at its secure proving grounds two hours from Tokyo. The stylish SUV runs on a MacStrut front and double-wishbone rear set-up, which, with the constant all-wheel-drive, gave it impressive handling.The body stayed flat at 150km/h on the banked circuit and on the tight course it easily absorbed the lumps and bumps, steered around the twisty bits sans dramatics and felt very much like an Impreza hatch with a better view. It's not the world's fastest machine, but gets along at a brisk-enough pace and we think most owners will agree with the maker's `fun to drive' claim.We like CVT and the Lineartronic version that Subaru uses has paddle shifts for folk who like to play at being Dean Herridges. In that mode it becomes a six-speed shifter. Bottom line is that CVT is super-smooth and super efficient. Trannie of the future, so get used to it.XV pricing has not been finalised, but Subaru expects the current Impreza XV's sales of about 80 a month to leap to about 500 a month when it becomes just XV in January.