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Considering that the new Subaru concept car came out in 2018 and I noticed the new Toyota GRC like a week ago and hence joined this Forum, I would say the dropping of the STi was deliberate to make market share available for the GRC.

Right up until the shock announcement in Feb 2022, that the STi had been canned and it was only coming out as the WRX cannot possibly be a coincidence sorry.

Something happened quite some time ago where the STi was canned and at the same time the GRC went ahead.

Lets be honest here a 400Hp STi would have killed the GRC down here in NZ. It basically looks like the price will be the same, possibly the GRC Circuit Edition is going to be more expensive than the top spec premium edition STi, even more than the last limited SAIGO edition STi of which 20 came into NZ.

The really good news is that the new GRC Circuit Edition will kill it for people trying to sell the STi Saigo edition second hand for more than a brand new AMG A45S and trying to double their money. Try NZD$130K for an STi, its hilarious.

I've already harped on this on other forums but will not harp on it here to keep everything on topic. Pretty sure I said everything in the 2022 WRX thread if you'd like to check but TL;DR: Toyota had nothing to do with it
 

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I think if you ignore what was clearly a load of PR spin from Subaru and just look at the timeline, its pretty obvious what happened.

You don't keep feeding the media and then just instantly drop a car, it takes over a year to get going on it so basically there was never an STi in the works from the get go so the decision to drop it was made way back in 2021 or even earlier. With Subaru and Toyota no longer being indepedant companies so far from being in compettion with one another they are the complete opposite and are working together.

Its not rocket science, the STi got dropped for the GR Corolla to make it the ONLY car in this market segment. Basically there is zero competition for it currently. If you want 300Hp, AWD, 6MT and something you can actually afford to buy what else is there ?

I'm not going to complain, the hatchback is way better than a sedan and that would have been the major compromise for me with the Subaru STi.

The GR Corolla ticks all the boxes, except for probably the very poor colour options but thats hardly a deal breaker.
 

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The decision did not come from Toyota. They've said the GRY and GRC were basically in development at the same times which was long before Subaru said to cancel the STi. Subaru had something planned for the STi as a ICE car but with deadlines fast approaching and CAFE laws getting more strict, the STi just wouldn't be feasible. Toyota actually would've wanted Subaru to keep making the STi. I believe Akio said he'd love for Subaru to get back into WRC so they can have a nice brotherly competition(like the Type R and GRC are going to have in the markets). Competition drives each company to do better and I bet they would've loved a nice 3-way competition of Japanese performance cars based on their commuter cars
I feel it was likely, as Jeonsa said, emissions. I also think it was just time to refresh the WRX line altogether, but with the push to go EV, they didn't want to invest in a new ICE STI that wouldn't sell for long enough to see ROI on the line. I imagine they have to sell a lot of STIs to make their money back on them.
Subaru has a very small lineup world wide with not many engines. A new STi would have a huge impact on their CAFE standards in every market in a negative way
This right here. Subaru also isn't real good with MPG's. I mean you have models out there from other manus running 100+ more HP than the STi with better CAFE ratings. Subaru just isn't very good in the engine development department. Toyota and Yamaha, are, however.
These right here. Emissions is what killed the full ICE STi, not Toyota. You want competition, Toyota wants it. Toyota and Honda have been at eachother to make better cars and Subaru having the STi compete with the GRC would drive them to, as they like to say, "make ever better cars." If you want to talk about it more, please go into that thread and we can all give our thoughts some more
 

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These right here. Emissions is what killed the full ICE STi, not Toyota. You want competition, Toyota wants it. Toyota and Honda have been at eachother to make better cars and Subaru having the STi compete with the GRC would drive them to, as they like to say, "make ever better cars." If you want to talk about it more, please go into that thread and we can all give our thoughts some more
The STI also gets absolutely wretched fuel economy for what it is…I think the city figure is freaking 16 MPG, which is V8 pony car territory. Out of a FOUR CYLINDER. In fact, Subaru struggles with fuel economy in general. Their engines just aren’t all that efficient, which is one of the reasons why they spam their fleet with CVTs.

I get that fuel economy and emissions don’t matter to probably 3/4s of enthusiasts, if not more….but the times are changing, and I don’t think Subaru is capable of making that much power with an internal combustion engine and still getting reasonable fuel economy and emissions. It’s probably why they’ve claimed the STI will be electric if it happens at all.
 
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