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Subaru to slash guidance, cut output after finding more cheating: Nikkei 

Key Points
  • Subaru will reduce output at its main factory in Japan after finding new cases of inspection cheating.
  • The automaker also slashed its annual profit forecast by a quarter to 220 billion yen ($1.94 billion), the Nikkei business daily reported.
  • Japan's smallest major automaker is due to announce its first-half results along with new information on improper vehicle inspections. The company delayed the announcement by two hours earlier on Monday.
A worker assembles a Subaru branded vehicle on the production line of Fuji Heavy Industries Ltd.'s Gunma Yajima Plant in Ota, Gunma, Japan.
Tomohiro Ohsumi | Bloomberg | Getty Images

Subaru will reduce output at its main factory in Japan after finding new cases of inspection cheating and will slash its annual profit forecast by a quarter to 220 billion yen ($1.94 billion), the Nikkei business daily reported on Monday.

Shares in Subaru were down 5 percent on Monday afternoon, underperforming a 0.8 percent decline in the broader Tokyo market.

Japan's smallest major automaker is due to announce its first-half results along with new information on improper vehicle inspections. The company delayed the announcement by two hours earlier on Monday.

Last month, Subaru nearly halved its operating profit estimate for the April-September period due to higher quality-related costs. It later announced a global recall of around 400,000 vehicles, including its popular Forester SUV and Impreza sedan, to fix a design flaw in the engines' valve springs, which it said had led to the earnings revision.

That recall came on the heels of a separate series of product recalls that stemmed from revelations late last year that uncertified workers had been submitting final inspection reports for vehicles sold in Japan. That had also led to a recall of about 400,000 cars.

At the same time, Subaru is facing a slowdown in the United States, it biggest market where overall market demand has cooled since record-high sales in 2016. A possible rise in U.S. tariffs on Japanese auto imports would also hurt Subaru, given that it imports half of the vehicles it sells in the United States from Japan.

Subaru's most recent operating profit forecast is a 21 percent decline to 300 billion yen for the year to March 31, 2019.

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Autos

Subaru says employees manipulated fuel economy data

Key Points
  • Subaru said some employees manipulated fuel economy data during final inspections for several years.
  • It is the latest revelation in an ongoing investigation of faulty inspections at the carmaker.