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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

2016 Audi TTS Quick Spin

So, this is awkward. Last week, you (hopefully) read my Quick Spin on the Mercedes-Benz C450 AMG, a vehicle that I argued was dynamically very good, but wasn't so much better than the standard C300 to make it a worthwhile buy. Now I'm going to voice a similar opinion. The Audi TT has always been a vehicle you bought for the style, rather than the performance. If you wanted an athletic two-seat German, you just bought a Porsche Boxster. But the TT, that's a car you bought for the way it looks. And the way it looks remains the strongest argument against the car you see here, the TTS. In short, it's quick, agile, and more aggressive looking, but none of those qualities are so dramatically better than the plain-jane TT. Another Autoblogger came to this conclusion while tracking the new TTS – now I'll explain where this car misses the bull's eye on the road. Driving Notes Audi will probably never match the design impact of the original 1998 TT, but the third-gen feels like a more mature, cohesive evolution of the handsome second-generation car. The front and rear fascias are sharper, more muscular, the headlights/taillights chiseled and emotive, and the front grille significantly more powerful. Even in the subdued Daytona Gray shown here, this is a car that can get people staring almost as easily as that original model. The interior of the third-generation TT is as much a design triumph as the first TT's exterior. It's a master class in clean, simple, elegant design, but it's also extremely disorienting. Buttons for the HVAC system are hidden on the vents themselves and not having a central display of any kind is jarring. Once you get used to the layout and embrace the absolutely exceptional Virtual Cockpit – seriously, I'm convinced this is the finest piece of in-car technology on the market – the cockpit layout just starts making sense. This is a compact cabin, but it's a wonderful place to spend time. In addition to Virtual Cockpit, the S Sport seats (optional on the standard TT) are supportive and perfectly snug. Even for the big boned, the flat-bottomed steering wheel is a delight. The material quality is high across the board. Perhaps the biggest complaint is the charitably named backseats. Audi should just go with an R8-style shelf back here – those tiny buckets aren't fooling anyone. It'd make for a more versatile interior. Audi's current TT engine line is restricted to 2.0-liter, turbocharged four-cylinders.

Feds allege widespread Volkswagen cheating on clean-air rules

Volkswagen intentionally installed software in nearly a half-million diesel vehicles that helped the cars evade substandard results on emissions tests, the federal government charged Friday. The Environmental Protection Agency issued a notice of violation to the German automaker, saying the company's software broke the law by violating two provisions in the Clean Air Act. Circumventing the standards meant affected cars emitted as much as 40 times the allowable level of certain pollutants. Both the EPA and California Air Resources Board have launched investigations. In its notice of violations, the EPA said Volkswagen officials admitted to installing and concealing what they call a "defeat device," which was designed to detect when the cars were undergoing official emissions tests – and only turn on emissions controls during that time. "Our goal now is to ensure that the affected cars are brought into compliance, to dig more deeply into the extent and implications of Volkswagen's efforts to cheat on clean air rules, and to take appropriate further action," said Richard Corey, executive officer of CARB. The allegations cover approximately 482,000 vehicles sold in the United States over the past seven years. Cars involved include diesel versions of the Jetta, Beetle, Audi A3 and Golf manufactured between the 2009 and 2015 model years. Passats manufactured for the 2014 and 2015 model years are also included. Federal officials note there is no safety danger to motorists, but the cars will be recalled for repairs. If true, Volkswagen faces a fine that could run in the hundreds of millions of dollars -- likely higher than the $300 million charge the EPA levied last November at Hyundai and Kia for exaggerating the fuel-economy in several models. The charges also put a tremendous dent into the company's plans to increase sales of its "Clean Diesel" vehicles in North America. In a written statement, Volkswagen Group of America acknowledged it had received the notices from the EPA and CARB. "VW is cooperating with the investigation; we are unable to comment further at this time," it said. Federal officials said the defeat-device software was uncovered during an independent analysis by researchers at West Virginia University, who in working with the International Council on Clean Transportation, a non-governmental organization, raised questions about emissions levels.