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Audi to spend $17 billion to fight BMW

It's no secret that VW Group, parent company to not only Volkswagen but also Audi, Bugatti, Bentley, Lamborghini, Porsche and Ducati brands sold in the US, is determined to become the world's largest automaker. Even more impressive is that VW is prepared to spend billions to make it happen.
With that comes word that VW Group will be spending $17 billion on its Audi brand over the next three years to push itself above rival BMW. The money will be invested in both vehicle development (including lightweight auto design and alternative powertrains) and facilities (including expansion in Hungary, China and new operations in Mexico). The luxury brand is focused on global manufacturing infrastructure.
Already Europe's best-selling luxury brand, Audi's objective is to overtake BMW by the end of the decade by selling more than two million cars per year (BMW is shooting for 1.54 million sales in 2013). If those objectives are met, VW Group should be on track to be the industry's volume leader by 2018.

BMW details Concept X5 eDrive ahead of New York debut

Already weighing more than most other types of vehicles and with the space to accommodate the extra equipment, crossovers and SUVs arguably make for one of the more ideal platforms to transform into a hybrid. And there have been a handful of them - like the Audi Q5, Infiniti QX60/Nissan Pathfinder, Porsche Cayenne/Volkswagen Touareg, Lexus RX450h/Toyota Highlander and Cadillac Escalade/Chevy Tahoe/GMC Yukon - but by and large the majority of hybrids on the market are sedans and hatchbacks. BMW, however, looks poised to join the minority with the X5.
The Bavarian automaker showcased the X5 eDrive concept at Frankfurt last year, and as promised, has now revealed the followup it will present at the New York Auto Show in just a few days. The new Concept X5 eDrive, as BMW has now revealed, pairs a 2.0-liter turbo four good for 245 horsepower to a 95-hp electric motor to deliver a combined 340 horsepower. Its lithium-ion battery can power it for up to 20 miles and at speeds up to 75 miles per hour before the gasoline engine needs to kick in. All that without sacrificing the vehicle's utility, maintaining an almost perfectly flat loading floor with 40:20:40 split-folding rear seats, and without sacrificing much on performance, either: with a 0-62 time of seven seconds flat, the X5 eDrive concept is quicker off the line than the production X5 with the 2.5-liter turbodiesel and just a tenth off of the 3.0-liter turbodiesel.
With the full technical details now released (you can delve into it all in the press release below), the only question remains when BMW will actually put the X5 eDrive into production. Given its appearance in New York, though, we gather that whenever it does reach showrooms, it'll reach American ones as well.

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