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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

Former Porsche CEO Wiedeking indicted over VW takeover bid

Do you recall the failed efforts by Porsche to take over Volkswagen? According to a Bloomberg report, former Porsche CEO Wendelin Wiedeking (above) and ex-CFO Holger Haerter have finally been charged with market manipulation over the exercising of options as part of the German sportscar manufacturer's ill-fated attempt to take over the much larger VW. That failed bid eventually resulted in the reverse coming true - VW swallowing Porsche.
The charges leveled by Stuttgart prosecutors come after a three-year investigation centered around allegations that Porsche execs made a concerted effort to increase the company's share in VW to 75 percent in preparation for a hostile takeover. Porsche had previously told its investors on at least five occasions that it had no intention to buy VW.
Portions of the investigation have subsided, according to prosecutors, citing an inability to prove certain improprieties with a "necessary degree of certainty." The number of charges is down to 5 from a previous 14 counts regarding "information-based market manipulation."

2015 Porsche Macan S

I'd be willing to bet that 99 percent of all Porsche Macan owners will never take their vehicle on a track or see any more off-roading than a dirt path to a summer cottage, yet I maintain that there is no better venue to explore the absolute outer limits of the automaker's newest small family transport than on a racing circuit and an off-road course. It's testing at each extreme of the vehicle's operating envelope, with both challenges requiring very different capabilities. With that in mind, and looking forward to dirty floor mats and corded tires, I jumped at the opportunity from Porsche to wring out its new Macan S at Willow Springs International Raceway, located in Southern California's high desert.
The range-topping Macan Turbo (base price $72,300 plus $995 destination), with its 400 horsepower twin-turbocharged 3.6-liter V6 gets most of the glory these days. But many, including myself, would argue that its slightly less powerful sibling, the Macan S, is actually the pick of the new litter. Despite having 60 fewer horses under the hood and giving up six-tenths of a second in the sprint to 60 miles per hour, it costs a massive $22,400 less - money better spent on equipment that improves the crossover's ride comfort and capability, or perhaps a well-used Boxster for weekends.
Despite a reasonably attractive starting price of $49,900 (plus destination), very few Porsche buyers will leave the showroom with a base model. My Dark Blue Metallic Macan S tester was equipped with a slew of mechanical upgrades, including air suspension with Porsche Active Suspension Management (PASM), Porsche Torque Vectoring Plus (PTV Plus), Sport Chrono Package and 21-inch 911 Turbo Design wheels. A Premium Package and a few other miscellaneous options bloated its price to $69,870. That's a very steep price for the premium compact crossover segment, but it's still less than a base Macan Turbo.