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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

VW has received several tentative bids for Ducati

Italy's Benetton family is vying with motorbike firms and buyout funds for control of Italian motorcycle brand Ducati, which is being sold by Germany's Volkswagen, sources involved in the process told Reuters. Volkswagen, whose Audi division controls Ducati, has received several tentative bids with the Benetton family's investment vehicle Edizione Holding valuing the Monster motorbike maker at $1.2 billion, one of the sources said. As well as Edizione Holding, U.S. buyout fund Bain Capital, which owns a stake in Ski-Doo snowmobiles maker BRB, and two Indian motorbike firms, Eicher Motors and Bajaj Auto, have also bid for Ducati, the sources said. Indian carmaker Eicher controls Royal Enfield, a motorcycle brand established in 1893 which ranks as one of the oldest. Strategic bidders also include U.S. automotive firm Polaris Industries, which earlier this year said it would wind down its struggling Victory Motorcycle brand. A shortlist of bidders for a second stage of the auction could be selected as soon as Saturday, two of the sources said. Volkswagen adviser Evercore has a long list of bidders including private equity funds such as Ducati's previous owner Investindustrial, CVC Capital Partners, Advent and PAI, all hoping to outbid industry players, the sources said. If it gets to the second round, Edizione Holding could seek to form a consortium with a financial investor, two of the sources said, in a bid to secure control of Ducati, whose racers have won the Superbike world championship 14 times, with Carl Fogarty and Troy Bayliss its most successful riders. Audi, Edizione Holding, Investindustrial, Advent and PAI declined to comment, while the other interested groups were not immediately available for comment. PRICING CHALLENGES For some buyout funds, Ducati's valuation of up to $1.4 billion – which sources said is based on a multiple of more than 10 times its core earnings of roughly 100 million euros – is a tall order as they lack the synergies that some motorbike makers could achieve. But Investindustrial founder Andrea Bonomi, who sold Ducati to Audi for about 860 million euros in 2012, is serious about a comeback, one of the sources said. China's Loncin Motor was among a group of industry players that initially showed interest in Ducati, alongside Harley-Davidson. The latter has, however, decided against making a bid due to Ducati's price tag, while it could not be established if Loncin Motor had carried on bidding.

Audi doesn't even need December to set new global sales record

In 2011, Audi broke its previous-year global sales total at the end of November. It did it again in 2012. It did the same in 2013, and it's done the same again this year. The brand sold roughly 1.575 million cars last year. As of November 30 this year - its 47th record-breaking month in a row in the US - it had found new owners for 1.591 million cars around the world. Where is the action happening? Everywhere, with double digit growth year-on-year in China (16.4 percent, led by the Q3), the US (15.4 percent, led by the Q5) and Mexico (10.6 percent), and triple-digit growth in Brazil (105.2 percent). Even Europe, still struggling to break free of its retail lassitude, returned a 4.3-percent gain, with the UK and Swedish markets up by more than 20 percent. In November alone, Audi's deliveries increased 10.8 percent compared to last year, and it broke the company record for monthly sales, getting 146,250 units out the door. You can find more numbers and details in the press release below. AUDI AG: new sales record after 11 months - Full year 2013 volume already exceeded in November - Sales chief Luca de Meo: "Strong year-end sprint for Audi" - New-generation Audi A6* launched in the first European markets Ingolstadt, 2014-12-09 - Audi continues to post double digit growth in November too: Deliveries climbed 10.8 percent to a new record breaking figure for a single month of around 146,250 cars. The company once again grew significantly in all regions around the globe. Demand for the four rings rose in the Asia Pacific region in particular with sales up 17.7 percent. Since January, the premium manufacturer has delivered around 1,591,100 cars (+10.1%) to customers, thus topping last year's sales total after just 11 months. In the whole of 2013, the Ingolstadt based company sold around 1.575 million units. "Our performance in November shows that we are keeping up the pace as we sprint towards the year-end," says Luca de Meo, Member of the Board of Management for Sales at AUDI AG. "Our large export markets in particular are driving the growth of the four rings at this time." In China Audi handed over 52,544 vehicles (+18.5%) to their new owners. The Audi Q3* provided a strong boost, with demand for the compact SUV growing by 49.8 percent. Since January, the Ingolstadt-based company has sold a total of 516,356 cars in the Middle Kingdom – and thus more than half a million units for the first time.