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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

Jay Leno goes offroading with the legendary Ivan 'Ironman' Stewart

Jay Leno takes a step outside of his cavernous garage for this latest video for a jaunt into the desert to get a little dirty. He meets up with off-road racing legend Ivan 'Ironman' Stewart, who has multiple Baja 500 and 1000 wins in his motorsports career, to play with a Toyota Tundra in the sand.
Unfortunately, Leno doesn't get to interview Stewart too deeply about his long history in racing, but Ironman does talk a little bit about reading the trail while speeding through the desert. In lieu of a great conversation, there is a ton of high-quality footage of the Toyota bounding through the desert.
This clip feels more like a marketing effort than the usual output from Jay Leno's Garage, but it's still great to see Stewart behind the wheel sliding a truck, just like old times. The two of them even take the truck on a somewhat humorous journey at the end of the video.

Post-earthquake, Toyota prepares to reopen some plants in Japan

Toyota will restart vehicle production at most of its closed factories in Japan next week, but the factories that build the Mirai and many Lexus models will remain closed through at least April 28 and possibly longer. The earthquakes around the city of Kumamoto on the island of Kyushu forced the automaker to stop most of its assembly throughout the country due to a lack of parts supply. Toyota will reopen the plants in phases from April 25 to 28. However, the Motomachi factory with its LFA works, which makes the Mirai, and the Miyata factory will remain closed. These sites also build the Lexus NX, RX, ES, GS, and CT, according to Toyota. The automaker didn't say when production would begin again or how this would affect vehicle supply. "In the update, we received this morning from TMC, they said that at this stage it is too soon to tell what the impact on production will be, so we can't say yet whether there might be vehicle shortages in the US," spokesperson Aaron Fowles told Autoblog. While the quakes were focused on Kyushu, they damaged Aisin Seiki factories, which supplied parts to Toyota plants across the country. The automaker worked with its partner to import the necessary components from China and Mexico, and Aisin started moving molds from the damaged plants to operational ones in Japan, which gets production under way sooner. Automotive News Europe estimates the week of lost production cuts total assembly by 90,000 vehicles. It could cost Toyota the equivalent of $458.2 million to $641.5 million. The company could make up some of the losses through overtime. Toyota says these plans are subject to change because on ongoing tremors in the region, which could cause more damage. Reuters reported there was a magnitude 5.5 aftershock in the Kumamoto area on April 19. So far, the quakes have killed at least 47 people and around 100,000 people have moved to evacuation centers. Toyota to Restart Production on Vehicle Assembly Lines in Japan from April 25 Apr. 20, 2016 Toyota City, Japan, April 20, 2016-Between April 25 and 28, Toyota will restart production on most of its vehicle assembly lines in Japan. On April 17, Toyota announced that, due to parts shortages resulting from the severe earthquakes that struck Japan's island of Kyushu last week, production would be suspended on almost all of its vehicle assembly lines in stages between April 18 and 23.