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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

Recharge Wrap-up: Tesla Gigafactory gets high-tech neighbors, BMW i8 still comes with a long wait

Switch plans to build a large data center near the site of Tesla's Gigafactory battery production facility in Reno, Nevada. The 3 million square-foot facility in the Tahoe-Reno Industrial Center will cost $1 billion to build, and eBay is expected to be the main tenant when the first portion is finished in 2016. Apple is also building a data center nearby. One draw for companies like Switch, Apple and Tesla is access to the region's clean power, and the Reno area could become the next big center for high-tech manufacturing. Read more at GigaOm. Daniel Sparks of investing website The Motley Fool has shared his insights after living with the Tesla Model S for four months and 10,000 miles. After driving his 85-kW version through various conditions, including a 2,200-mile road trip, Sparks is optimistic about the car and the company behind it. From his experience, he says that charging is easier than most people believe, and that range anxiety isn't a problem. He calls Tesla's growing Supercharger network a "game changer," citing their quickness, availability and the fact that charging is free for life. He also says that most people seem to know very little about the car. Still, he calls Tesla stock "pricey" with the growth already priced into the shares. Read more at USA Today. The wait for a BMW i8 is about a year, despite efforts to ramp up production. BMW is reducing production of the i3 in order to increase the number of i8s by more than 50 percent for 2015, but the bigger batch won't become available in the US until October. Ludwig Willisch, CEO of BMW North America, says that he doesn't expect cheap gas to slow sales of the i3. He also denies rumors of an i9 positioned above the i8. The new 7 Series appears to be taking some cues from the i8, though, with carbon fiber, magnesium and aluminum construction, as well as improved connectivity. Read more at Automotive News.

BMW eyes Z4 replacement before 2020

As BMW has been busy building four-door versions of two-door versions of four-door cars, less useful crossovers and front-drive minivans, you could be forgiven for thinking it had given up on its aging Z4 roadster. But that, we're pleased to report, isn't the case. According to Automotive News, BMW is hoping to release the next-generation Z4 (if that's what it ends up being called) before the close of this decade. The news outlet spoke to the company's chief engineer, Klaus Frohlich, at the 2015 Geneva Motor Show, who indicated that BMW may split costs on the new car with Toyota, as part of the partnership between the two automakers. This partnership is integral to the next-gen Z4, largely because of the declining importance of the roadster segment, Herr Frohlich indicated. "If you look at the volume... we have to realize that these segments are shrinking," Frohlich told AN. According to the publication, sales of the Z4, which hit the market in its current form back in 2009, dropped 11 percent in Europe and 13 percent in North America. The car also is less attractive to customers in China for a number of reasons. "[Chinese customers] are not interested in roadsters," Frohlich explained. That's because privacy is a high priority for drivers in China, AN said. On top of that, open-roof cars expose their customers to China's notorious air pollution, which drivers are understandably keen to avoid. Related Video: