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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

Mini may not build electric cars in England due to Brexit

BMW will decide whether to build its new electric Mini in Britain or elsewhere by the end of September, its board member for sales told Reuters, in a test of the country's ability to continue to attract investment as it leaves the EU. Mini makes around 70 percent of its approximately 360,000 compact cars at its Oxford plant in southern England but the car industry is concerned about the effect any loss of unfettered access to the EU, its largest export market, could have on plants after Brexit. BMW is deciding between its English site, a plant in the Netherlands where it has built more of its conventional line-up in recent years, and its Germany plants at Leipzig and Regensburg for the new low-emissions variant. The firm's board member for sales told Reuters that the electric Mini investment, likely to be worth tens of millions of pounds, would come in the next three months and the board was currently considering a number of factors including Brexit. "One of the elements is what is the likelihood of a tax regime and if there's a tax regime, how would it apply," Ian Robertson said during an interview at the Goodwood Festival of Speed in southern England. "If you made the motor in a German plant and you then assembled the car in a British plant, and you took the cars back to the German market, then the duty that you would pay would be reclaimed," he said, in an example of the options companies are examining to plan for any duties or tariffs. The automaker is also looking into where the uptake of greener models is strongest and where the best supply chains are, he said. Britain could approve its first major electric battery hub in the next few weeks after officials in central England submitted proposals to ministers in May. But last month, the car industry issued its strongest warning yet on the need for politicians to strike a transitional Brexit deal after two-year talks to ensure unfettered trade is maintained. Uncertainty has also been heightened after a snap June 8 election which left Prime Minister Theresa May without a majority and has led to ministers in her administration hinting at different versions of Britain's likely post-Brexit future. Last year, May's administration helped secure two new models at Japanese carmaker Nissan's plant in the north of England after what a source said was a government promise of extra support to counter any loss of competitiveness caused by Brexit.

Rolls-Royce Cullinan, Mercedes-AMG E 53 and BMW 2 Series | Autoblog Podcast #734

In this episode of the Autoblog Podcast, Editor-in-Chief Greg Migliore and Senior Editor, Consumer, Jeremy Korzeniewski kick things off with a discussion of the Rolls-Royce Cullinan and the future of the brand. The Mercedes-AMG E-Class is next up, followed by the BMW 2 Series Coupe.  Next, Senior West Coast Editor James Riswick reports from the ground at the first drive of the latest Honda HR-V. Our hosts revisit the week's news, including automakers requesting a lift of the EV federal tax credit cap, Chevy giving us a peek at its electric Blazer, and Ford recalling millions of vehicles, including about half of all the Mustang Mach-E EVs it has sold. Finally, our guys dig through the mailbag to help a reader decide whether to purchase a Ford Focus ST or another hot hatch. Send us your questions for the Mailbag and Spend My Money at: Podcast@Autoblog.com. Autoblog Podcast #734 Get The Podcast Apple Podcasts – Subscribe to the Autoblog Podcast in iTunes Spotify – Subscribe to the Autoblog Podcast on Spotify RSS – Add the Autoblog Podcast feed to your RSS aggregator MP3 – Download the MP3 directly Rundown Cars we're driving Rolls-Royce Cullinan Mercedes-AMG E 53 BMW 2 Series Coupe Dispatch from the 2023 Honda HR-V first drive event GM, Ford, Toyota, Stellantis CEOs want EV tax credit cap lifted 2024 Chevy Blazer EV partly revealed, details coming in July Ford recalls Mustang Mach-E, includes stop-sale order Ford recalls 3 million other vehicles Spend my money Feedback Email – Podcast@Autoblog.com Review the show on Apple Podcasts Autoblog is now live on your smart speakers and voice assistants with the audio Autoblog Daily Digest. Say “Hey Google, play the news from Autoblog” or "Alexa, open Autoblog" to get your favorite car website in audio form every day. A narrator will take you through the biggest stories or break down one of our comprehensive test drives. Related video: