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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

BMW predicts 2 Series Active Tourer will have 75% conquest rate

In the last few years, BMW has definitively proven that it wasn't a slave to its legacy. In the US, the 3 Series was generally associated with smooth, flat-six engines, but the Bavarian brand dropped a four-cylinder turbo into it. The company was also known for its sports sedans, and it went green with the i3 and i8. Now, rear-wheel drive is off the table as defining its vehicles, as well. With the imminent launch of the 2 Series Active Tourer, the Bavarian's models are going front drive and opening up themselves to a whole new group of customers, so the thinking goes.
"We are expecting the Active Tourer will have a conquest rate of around 75 percent," said Frank Niederlaender, a BMW product manger, to Automotive News Europe. If you're not hip to the lingo, that means three quarters of the hatchback's buyers would come from other brands - an impressive figure, if accurate.
When it hits the road, the 2 Series Active Tourer will be the first BMW-branded vehicle to use the company's UKL front-wheel drive platform, already on the current Mini Cooper. The roomy hatchback is aimed at young families looking for a car that is luxurious but can still tote around the tots. It launches in Europe in September to compete against similar models like the Mercedes-Benz B-Class, but the Bimmer isn't crossing the Atlantic to the US until early 2015, according to ANE.

Did BMW drag its feet on Mini recall?

The National Highway Traffic Safety Administration is opening an investigation into BMW's reporting of a recall for 30,456 examples of the 2014-2015 Mini Cooper Hardtop, Cooper S, and the 2015 John Cooper Works. According to the government, "it appears from a review of NHTSA's databases that BMW may have failed to submit recall communications to NHTSA in a timely manner." The automaker issued the recall in July because crash tests showed the models didn't meet side impact requirements for passengers in the back seat. While there were no reported injuries at the time, the company decided to install energy-absorbing material in the space between the rear interior panels and the exterior. However, NHTSA has decided to investigate whether this campaign should have started much earlier, given the evidence the company had. According to the government's report, the Cooper Hardtop failed side-impact tests in 2014, although one of these tests was five-miles-per-hour faster than the Federal Motor Vehicle Safety Standard. The agency claims: "In January 2015 BMW verbally committed that it would conduct a service campaign to add padding to the rear side panels of MY 2015 Mini 2 Door Hardtop Cooper models. However, BMW did not initiate the service campaign and failed to inform NHTSA of its failure to do so." A subsequent crash test of an example with this fix showed it to make the vehicle compliant with the rules. Mini spokesperson Mariella Kapsaskis told Autoblog: "Regarding the NHTSA audit query, BMW Group is evaluating the request and will respond to NHTSA as appropriate." INVESTIGATION Subject : BMW Reporting & Timely Recall Execution Date Investigation Opened: SEP 24, 2015 Date Investigation Closed: Open NHTSA Action Number: AQ15004 Component(s): STRUCTURE All Products Associated with this Investigation Vehicle Make Model Model Year(s) MINI COOPER 2014-2015 MINI COOPER S 2014-2015 MINI JOHN COOPER WORKS 2015 Details Manufacturer: BMW of North America, LLC SUMMARY: NHTSA is opening this AQ to better understand and evaluate BMW's process(es) for its notification procedures and for timely and efficient execution of its safety recall campaigns. In mid-2014, NHTSA's New Car Assessment Program (NCAP) had side impact moving deformable barrier (MDB) tests performed on two model year (MY) 2014 Mini 2 Door Hardtop Coopers. These two tests were performed at a speed 5 mph higher than required by Federal Motor Vehicle Safety Standard (FMVSS) 214, Side impact protection.