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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

Aston CEO claims Cygnet cancelled because Toyota is dropping iQ in 2014

While slow sales and a $50,000 price tag may have been contributing factors to the Aston Martin Cygnet being cancelled last month, Aston Martin CEO Ulrich Bez is pointing the finger at Toyota for the demise of this luxurious little city car. In a discussion with Autocar, Bez is quoted as saying that the ultimate reason the Cygnet was cut is because Toyota plans on dropping the iQ (on which the Cygnet is based) in 2014 - a claim denied by the Japanese automaker.
Interestingly, the article also cites another publication reporting that a Toyota importer in the Netherlands heard the same news as Bez, and it has already stopped importing the cars. If the European Toyota iQ is cancelled, that would likely spell the end of the slow-selling Scion iQ in the US, which has sold just 3,365 units through September (a drop of 51 percent year over year).
Regardless of why production of the Cygnet ended, Bez also says that a lack of support from Toyota on the project prevented it from being offered in the US or receiving a supercharged engine, which are two factors that likely would have made the car appealing to more buyers.

Toyota announces new, more efficient powertrains for 60 percent of its vehicles by 2021

In the face of increasingly strict standards on fuel economy and CO2 emissions, Toyota announced today that it's introducing a new hybrid system, a new 2.5-liter direct-injection inline four-cylinder engine, and two new transmissions – an eight- and a 10-speed. The development of all of these components will be based around the Toyota New Global Architecture, or TNGA. Development of the systems has moved forward and the new powertrains will find their way into vehicles starting next year. TNGA, like Mazda's Skyactiv technology, is a complete design philosophy that focuses on more than just a clean or efficient engine. The first vehicle to deploy the TNGA platform was the current, fourth-generation Prius. With TNGA, Toyota focused on improving handling, ride, and braking performance. The new powertrains are meant to compliment this new platform by being both engaging to drive and fuel efficient. Since TNGA can be adapted for front-, rear-, or all-wheel-drive layouts, it's capable of underpinning a number of potential products. Toyota is arguably the leader in hybrid technology, and taking lessons learned in the development of the current Prius, the automaker has developed the new Toyota Hybrid System II, or THS-II, for rear-wheel-drive applications. Performance has improved versus the outgoing model, and Toyota says efficiency, especially at high speeds, has been improved. In addition, the system's use in plug-in vehicles has been improved. For the first time, the electric motor will be able to provide direct driving power, whereas before it simply acted as a generator. The new, naturally aspirated 2.5-liter four-cylinder, like the THS-II, has been designed around the TNGA platform. Most notably, the thermal efficiency of the engine has been improved. This means a higher output and improved exhaust and cooling. The new engine, which works in both traditional and hybrid applications, will proliferate through the Toyota and Lexus lineup. Toyota's two new automatic transmissions, like the new engines, are based on the TNGA system. That means a lighter and more compact design relative to similar transmissions. The 10-speed is intended for rear-wheel-drive Lexus products like the GS and LS. The tuning has been adjusted to improve response and smooth out shifts, though it's impossible to say how much it's been improved without getting behind the wheel.