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China's largest dealer body pushes back against foreign automakers over huge inventories

Do not think for a second that automakers forcing inventory on dealers in order to pad the numbers is a ruse known only in the US. Stories of individual brands have hinted at the trouble Chinese dealerships are having trying to move units as the country's economic growth remains hot but comes off the boil, like the one revealing that 95 percent of Toyota-FAW showrooms are losing money. Yet Toyota isn't the only culprit, and the issue has become so dire that the China Automobile Dealers Association (CADA), the largest dealer body in the country, has written to the government to complain. Chinese car sales are expected to close out the year with an annualized growth of six-percent, down from last year's 14 percent when targets were set, while in the background the pace of overall economic expansion is the slowest its been since the early nineties. Automakers, shipping cars on schedule to make their earlier targets, have blown up inventories such that they are an average of 1.8 times monthly sales, when the preferred multiplier is from 0.9 to 1.2. According to the CADA, the price wars and necessary incentives mean that only 30 percent of dealers are operating in the black. That number is down a whopping forty percent since 2010. In response, Toyota has already said it will not make its 2014 target of 1.1 million cars sold. We're a long way from 2012, when Toyota planned on selling 1.8 million cars in China in 2015, a target that's now as realistic as a manticore. BMW, Honda and Nissan have erased numbers on their spreadsheets, too; BMW growth dropped from 20 percent to 8 percent midyear after it began "reducing wholesale supplies," and Honda has been reworking its plans as sales have decreased each of the past six months. It's a big deal for Chinese dealers to begin protesting publicly, the CADA saying, "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable." With six-percent growth forecast for next year and dealers unwilling to remain underwater, The Year of the Sheep coming in 2015 could portend meaning beyond the zodiac. News Source: ReutersImage Credit: AP Photo/Andy Wong BMW Honda Nissan Toyota Car Buying Car Dealers

Nissan Xterra's fate hangs in the balance

The Nissan Xterra might not be long for this world, according to a report from Edmunds. The rugged SUV, which has always been a bit more of a hardcore, purpose-built vehicle than the rest of the Nissan SUV range. But it has also suffered from slowing sales, low fuel economy relative to the competition and general neglect, as Nissan has focused on other offerings in its range.
"There are plans to replace it, there are always plans, (but) I am not sure it will happen. I would say in the next six months to a year," Pierre Loing, vice president of product planning for Nissan Americas told Edmunds. Part of the problem, he added, was that the Xterra is a US-only vehicle, which makes it a hard sell in a world where automakers are increasingly depending on global cars.
Besides the economic forces working against the Xterra, it's just a vehicle that hasn't been a huge sales success of late. Customers are more conscious of fuel economy and a body-on-frame SUV that only nets 16 miles per gallon just isn't good enough; arguably why Nissan barely sold 17,000 units last year. We can hold out hope, as the Xterra remains a fun off-roader that we'd hate to see go, but unless Nissan finds a business case or some global partners, this is a vehicle that is on its last leg.

Will Nissan's Cummins deal upset Ram's marketing mojo? [w/poll]

Ram has used Cummins engines in its heavy duty trucks since 1989, and it is the only pickup truck brand to use products from the Indiana-based engine maker. With the announcement that the next Nissan Titan will also use a Cummins powerplant, and a Nissan spokesman having already said "We will definitely leverage the Cummins brand name," a piece in Automotive News wonders whether the deal will affect the way Ram markets its tie-up with Cummins.
The question really is, how intense is this competition? While it is the first time that trucks from two different brands have used Cummins engines, they'll be two different engines in two different kinds of trucks; Nissan is going to put a 5.0-liter turbodiesel in a non-heavy-duty Titan, Ram only uses its 6.7-liter, inline six-cylinder turbodiesel in heavy-duty offerings. The diesel that Ram will offer in its light-duty, half-ton 1500 is a 3.0-liter V6 EcoDiesel with 240 horsepower and 420 pound-feet of torque - compared to about 300 hp and 550 lb-ft expected from the Titan's Cummins - and its marketing so far has focused on the fuel economy gains.
If Nissan was going to prove its commitment to the segment, it had to do something compelling. If we're talking about sales competition between Ram and Nissan, Ram has sold 201,633 trucks as of July this year, up 24.2 percent, 31,314 of those sales coming last month; Nissan has sold 10,020 Titans through the end of July, down 21.1 percent, and just 1,168 in July itself. Nissan's new truck boss - who hopped there from Ram - said that buyers have asked for a powerful turbodiesel in something other than a heavy duty pickup, and from what we've read on various comment boards, the pickup truck crowd is excited about Nissan's move.