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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 R8, Lamborghini Huracan could get twin-charged five-cylinder

Engine downsizing and forced induction are some of the biggest trends in automotive powertrains today because. They offer the chance to reduce emissions and boost fuel economy, while possibly maintaining power. The shift is already happening to performance cars with turbocharged four-cylinders finding their way into the Ford Mustang, Chevrolet Camaro, and future Porsches. Now, there are rumblings of a tiny chance for a similar change coming for the Lamborghini Huracan and Audi R8. Why the new powertrain? China. While the market there might have slowing growth, it's still a major country for auto sales. The annual taxes on cars there also happen to be based on engine displacement, and there's a 40 percent rate on those over 4.0-liters, according to Car and Driver. The obvious answer to this conundrum is to build a smaller displacement, forced induction engine for the R8 and Huracan. Car and Driver points to the new turbocharged and electrically supercharged, 2.5-liter inline five-cylinder from the recent Audi TT Clubsport Turbo concept as a possible solution. Audi's e-turbo technology runs off a 48-volt electrical system and lithium-ion battery to produce a total of 600 horsepower and 479 pound-feet of torque in the prototype. With this mill, horsepower would barely shrink compared to the R8 V10 Plus and Lambo, but it actually makes more peak torque than their 5.2-liter V10s. While this is all theoretically feasible, take the possibility with a big grain of salt for now. According to Car and Driver, Quattro GmbH's Stephan Reil says that there's no work currently underway to fit the twin-charged five-cylinder, "but it has been talked about." That means such a vehicle is likely years away, if ever. In the meantime, a diesel version of the e-turbo setup is on the way the in the SQ7. Related Video:

Audi spotted testing new S4 at the Nurburgring

Where there's smoke, there's fire. Only in this case, the smoke is the upcoming new Audi A4, and the fire is the S4 spotted undergoing testing in this latest batch of spy shots. Snapped in both sedan and Avant wagon forms while undergoing testing on and around the Nurburgring – where else? – the next-generation Audi S4 will of course be based on the new A4 that's anticipated to debut in Frankfurt this September. That means MLB Evo architecture and styling that takes a page out of the new TT's playbook. But in S4 trim, it'll be altogether more performance oriented. Expect an even more powerful version of the outgoing model's 3.0-liter supercharged V6, pumping out a good 340-350 horsepower to all four of its driven wheels. That power will help it keep pace with the new Mercedes C450 AMG Sport. It won't have to take on the new C63 AMG directly, though, as that'll be the job of the next RS4 that will slot above it. But since that model may never make it to US showrooms, this will stand as the flagship of the new A4 family as far as the American market is concerned. Related Video: