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Automakers paying Chinese dealers for lower-than-expected sales

The Chinese dealers vs. foreign manufacturers story won't quit. It began with a story on the struggles faced by FAW-Toyota joint venture dealers, with supposedly 95 percent of the showrooms losing money, and 10 percent of them doing so poorly that they'd have to exit the business. The problem is mandated sales targets, most set when the country's economy was racing. Now that things have slowed, China's dealers are swimming in unsold cars and the costs to keep them. In the case of FAW-Toyota, dealers asked Toyota to hand over 2.2 billion yuan ($355 million) to help address the situation. That was followed by a report noting the issues that Honda, BMW, and Nissan dealers are having with the same issue, revealing that the Chinese Automobile Dealers Association (CADA) had taken the highly unusual step of writing to the Chinese government to complain. Now Reuters reports that CADA is not only pressing its case even harder, it's being open about it: it announced that BMW agreed to pay dealers 5.1 billion yuan ($820 million) to alleviate poor profits last year. Unnamed sources said Audi has thrown 2 billion yuan into the kitty for subsidies, and Daimler has contributed "about 1 billion yuan" to its dealers. The battle isn't just about 2014, but how business will be run in 2015 as well: Chinese Porsche dealers have requested the automaker lower its 2015 target of 64,000 cars, which would be a 40-percent increase on its 2014 sales of 46,931 vehicles. One analyst called it "shocking" that the CADA has taken its fight public, while CADA comments continue to imply that dealers have been railroaded to the cliff's edge without recourse. "Due to the difference in status," it's deputy secretary said, "individual dealers are not willing to, or don't dare to, talk frankly with the carmakers...." Both parties need one another, so they'll figure out a way to make it work – but that could mean acknowledging the Chinese market is behaving more like a mature one, not an emerging one. News Source: ReutersImage Credit: Lintao Zhang/Getty Images Earnings/Financials Audi BMW Porsche Toyota Car Dealers Luxury

Audi says new 48 volt micro-hybrid system improves fuel economy, paves way for electrification

Most cars use a 12-volt system to power their electrical components. But, with more and more electric bits and bobs being added to new vehicles, a dozen volts is looking a bit weak these days. In fact, Audi says that standard 12-volt systems are being stretched "to their very limits." Enter 48 volts. If used in a car that gets 40 mpg, that would translate to around 43.5 mpg. Audi is testing a supplemental 48-volt electric system in two prototype vehicles – modified mild-hybrid versions of the A6 TDI and the RS 5 TDI – in order to add in more electric technology (an electric compressor, for example, to improve acceleration) and "convenience systems for dynamic chassis control." Audi says it has more applications in the pipeline, but the overall gist is that the German automaker sees 48 volts as an "important building block in electrification strategy." As you can see in the picture above (click to enlarge), the RS 5 TDI concept uses a li-ion battery installed in the back of the car and an alternator to provide 48 volts when the engine is off. Audi says that the 48-volt system can save up to 0.4 liters of fuel per 100 kilometers. To put that into US numbers, if used in a car that gets 40 miles per gallon today, that would translate into a bump up to around 43.5 mpg. The Advanced Lead Acid Battery Consortium (ALABC) is also working on a 48-volt system to improve fuel economy and we've got a deep dive of Audi's electric turbocharger here. Even more powerful and efficient – the new 48-volt technology from Audi Important building block in electrification strategy More voltage and more power for new technologies Scalable platform concept suitable for wide-ranging uses Ingolstadt, August 25, 2014 – Audi is to upgrade part of its vehicle electrical system from twelve to 48 volts. The move represents another technical building block for facilitating the integration of new automotive technologies while increasing the power and efficiency of its cars. "We are using the full bandwidth of electrification in our drive principles strategy. Running part of the vehicle electrical system at 48 volts plays a central role in this," commented Prof. Dr. Ulrich Hackenberg, Member of the Board of Management for Technical Development at Audi. "It enables us to make more energy available.

These are the top luxury cars bought by people entering the segment for the first time

Let's say you just got a big promotion at work or the kids are moving out of the house, and you finally have some extra money. You decide to blow it all at once and treat yourself by upgrading your ride. Naturally, you look to a luxury automaker. What do you choose?
Models like the Audi A3 and Mercedes-Benz CLA-Class may be tailor-made to introduce buyers to the premium segment, but a new study finds that they don't garner the highest rates of non-luxury customer conquests. It turns out that a Volvo leads among folks moving up to a premium brand, and it isn't even one that's made anymore, at that.
A recent study by Polk and IHS Automotive looked at what models had the highest rates of buyers upgrading from a non-luxury segment. The information comes from its new vehicle registration data through April 2014. All ten top models boasted conquest rates of over 50 percent, but the Volvo C70 led the field with 68.01 percent of its customers coming from non-premium brands.