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China's largest dealer body pushes back against foreign automakers over huge inventories

Do not think for a second that automakers forcing inventory on dealers in order to pad the numbers is a ruse known only in the US. Stories of individual brands have hinted at the trouble Chinese dealerships are having trying to move units as the country's economic growth remains hot but comes off the boil, like the one revealing that 95 percent of Toyota-FAW showrooms are losing money. Yet Toyota isn't the only culprit, and the issue has become so dire that the China Automobile Dealers Association (CADA), the largest dealer body in the country, has written to the government to complain. Chinese car sales are expected to close out the year with an annualized growth of six-percent, down from last year's 14 percent when targets were set, while in the background the pace of overall economic expansion is the slowest its been since the early nineties. Automakers, shipping cars on schedule to make their earlier targets, have blown up inventories such that they are an average of 1.8 times monthly sales, when the preferred multiplier is from 0.9 to 1.2. According to the CADA, the price wars and necessary incentives mean that only 30 percent of dealers are operating in the black. That number is down a whopping forty percent since 2010. In response, Toyota has already said it will not make its 2014 target of 1.1 million cars sold. We're a long way from 2012, when Toyota planned on selling 1.8 million cars in China in 2015, a target that's now as realistic as a manticore. BMW, Honda and Nissan have erased numbers on their spreadsheets, too; BMW growth dropped from 20 percent to 8 percent midyear after it began "reducing wholesale supplies," and Honda has been reworking its plans as sales have decreased each of the past six months. It's a big deal for Chinese dealers to begin protesting publicly, the CADA saying, "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable." With six-percent growth forecast for next year and dealers unwilling to remain underwater, The Year of the Sheep coming in 2015 could portend meaning beyond the zodiac. News Source: ReutersImage Credit: AP Photo/Andy Wong BMW Honda Nissan Toyota Car Buying Car Dealers

2016 BMW X1 packs more into its little footprint

BMW is rolling out the second-generation of its X1 crossover, promising a roomier interior, greater efficiency and more technology in a compact form. The 2016 BMW X1 clearly embodies more dynamic styling than the model it replaces, with a more upright form punctuated by a higher seating position as compared to its low-slung predecessor. Inside you'll find a fully redesigned cabin space with more room for both people and cargo, and a long list of features. A 6.5-inch dashboard display comes standard along with a seven-speaker audio system and cloth seats, but buyers can upgrade to an 8.8-inch monitor, a 12-speaker Harman Kardon system, and a number of leather upholstery options. Upgrade to the Premium Package and you get a larger panoramic moonroof than that offered on the outgoing model, along with adaptive LED headlights and a head-up display. The Drive Assistance Plus package throws in features like lane departure, automatic high-beams, frontal collision warning, pedestrian detection, active cruise control, and park assist. There'll be an M Sport package available later as well, offering sports seats, paddle shifters, and a retuned suspension. Though BMW will surely be offering an array of engine options in other markets, for the US it's offering the new X1 exclusively in xDrive28i spec. Its 2.0-liter turbo four drives 228 horsepower and 258 pound-feet of torque through an eight-speed automatic transmission to all four wheels for a 0-60 time of 6.3 seconds. That ought to help the Bavarian automaker move even more than the nearly 62,000 units of the X1 it's sold since its introduction here in 2012. Pricing for the new version of BMW's littlest crossover will be released closer to its arrival in showrooms in the Fall, but you don't need to wait that long to delve into the full details in the press release below and the high-resolution images in the gallery above. The All-New BMW X1: - Greatest interior roominess and versatility in its class - Highest power with reduced emissions - Commanding presence, robust proportions, dynamic lines - Innovative connectivity and groundbreaking BMW EfficientDynamics technology unparalleled in the segment Woodcliff Lake, N.J. – EMBARGO: June 2, 2015 – 6:00pm EDT/3:00pm PDT... Today, BMW announced the all-new BMW X1 Sports Activity Vehicle.

China probing German automakers over spare parts

The Chinese market has proven to be a boon to German luxury automakers. However, the way that the companies have allegedly been controlling their supply of spare parts has begun to draw the ire of the nation's government. According to insiders speaking to Bloomberg, officials from the country's economic planning organization have opened a probe into Audi, BMW, Mercedes-Benz and some Japanese carmakers over claimed price inflation and limiting supply.
Specifically, the investigation centers around two aspects of how the companies do business, according to Bloomberg. Investigators want to know whether the original equipment component makers are able to sell spare parts only to automaker-authorized dealers or if they are also available to independent shops. There is also the issue of whether the price markup on replacement pieces is too high. The tight controls could be partially explained by China's reputation for producing counterfeit parts.
Evidently, the investigators haven't checked parts prices at car dealers elsewhere in the world. At least in the US, paying more at the dealer for factory components just goes along with owning a vehicle. If evidence of price fixing is found, the companies could face fines the equivalent of millions of dollars, according to Bloomberg.