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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

VW internal investigation finds 'no evidence' against suspended engineers

Volkswagen is still working out the chain of events that led to emissions-evading software being installed in 11 million diesel vehicles worldwide and deciding who was responsible for the treachery. So far, the German automotive giant's internal investigation hasn't publicly named many suspects, and three suspended executive-level engineers have been found not to be culpable in the wrongdoing, according to an anonymous insider speaking to Reuters. VW knows that the software began being installed in the EA 189 engine in 2008. The internal investigation has found that the emissions-evading tech was created because the powerplant was found to fail US standards. Plus, the diesel mill wasn't meeting cost targets, according to Reuters. The automaker responded by suspending over 10 employees, but three top engineers among them might not have been involved. Those put on leave include Heinz-Jakob Neusser from VW, Ulrich Hackenberg from Audi, and Wolfgang Hatz who led Porsche's research and group-wide engine development. The internal detective work hasn't turned up any evidence against these three men. In addition to VW's own inquires, government investigators in both the US and Germany are taking a serious look into the company's actions, too. So far, the automaker is setting aside about $7.3 billion to pay to fix the vehicles with the evasive software. Depending on what authorities find, the costs could grow quickly. Beyond the financial implications, the scandal has led to a serious shakeup in VW's corporate structure. Related Video:

2017 Audi S4 First Drive

For all its power and easy performance, the best thing about the last Audi S4 was its uncanny ability to act like a normal (but very high-spec) A4 for most of its life. Then, when you needed or wanted a bit more speed or a bit more grip, you pushed a button or opened the tap and it became something else. It became a thing with more grip, more poise, more focus, and more gristle, but the changeover between the two S4 characters was seamless. That doesn't seem to be the case with the new one. The latest, B9 A4 has been well received and is probably the best mid-sized premium car out there, so that should have left the S4 a simple job to become the best warmed-up premium mid-sizer. It hasn't quite happened like that. The spec sheet suggests the S4 should come out on top in the fight with the BMW 340i and the Mercedes-AMG C43, but the numbers aren't everything. The engine seems impressive on paper; the all-new EA838 3.0-liter turbocharged V6 was jointly developed with Porsche (and it's closely related to Porsche's next V8, with which it will share non-internal bits like the camshaft chain). The 60-degree V6 weighs 31 pounds less than the old S4's supercharged V6, and it's replete with variable valve timing and lift, centrally mounted fuel injectors, and both direct and indirect fuel injection. That gives it 354 horsepower at 5400-6400 rpm (up 6.5 percent) and 369 pound-feet of torque from 1,370 to 4,500 rpm. That gives it a peak 44 lb-ft higher than the old one, spread across a band 600 revs broader. At 2,000 rpm, where drivers live every traffic light, it has another 74 pound-feet. That's enough motivation to move to 62 mph in 4.7 seconds. There's a new all-wheel-drive system that usually shoots 60 percent of the torque to the back but can ramp that up to 85 percent when it needs to, or it can swing it around to fire more than 70 percent to the front axle. The category benchmarks suggest turbocharged 3.0-liter gasoline sixes are the thing to have, with the Mercedes-AMG C43 using one, the 340i BMW having one (though it's straight), and Maserati's Ghibli also using one. The oddball is Jaguar's XE S, which uses a supercharger. You know, like Audi just ditched. The S4 trumps all but the C43 on power (the nine-speed Benz has 362 hp). While it ties the Ghibli for torque, it again trails the Benz (by 15 lb-ft) though its torque peak hits far earlier (the Benz waits until 2,000 rpm).