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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

Audi Q7 testing gives us clearer view of new look

Audi just announced its intentions to build the Q1 in 2016. By that time, the company will already have introduced the opposing bookend to that subcompact utility vehicle, the fullsize Q7. The last time we saw the next-gen Audi Q7 out testing, our spy shots were very low quality and didn't reveal much about the luxury SUV. This time around we're able to make out a few key elements about the Q7.
For starters, the unfinished headlights have a stylish, wave-like lighting element with a three-dimensional appearance, while the rear of the Q7 will definitely get a similar wraparound liftgate as the current model. Overall, this prototype looks to be about the same size as the existing Q7, so it will be interesting to see how Audi squeezes almost 800 pounds from the SUV's curb weight. The diet will surely help improve efficiency, and we also hear that Audi is considering a plug-in hybrid model in addition to the standard gas and diesel variants.
Riding on a shared platform with the next-gen Volkswagen Touareg, Porsche Cayenne and the upcoming Bentley Falcon SUV, the next Audi Q7 is expected to bow in late 2014 for the 2015 model year.

Coming to America | 2018 Audi RS3 Sedan First Drive

Audi's Quattro division never let us have the giant-killing, all-wheel-drive RS3. Too sophisticated for the US, they said. Too European. And we only make it as a Sportback (that's hatchback to you). You wouldn't like it. You're more SUV kind of people. Others, those in Quattro's special we-like-you countries, bought the RS3 and constantly raved about it, insisting its handling made the Mercedes-AMG A45 look ponderous (because, well, it is), its packaging was terrific, and the noise, they said. The noise. Over and over, the noise. But ex-Lamborghini president Stephan Winkelmann is now the boss and he's brought with him a worldview that Quattro GmbH never had. And despite being busy changing the letterhead to Audi Sport, Winkelmann found time to think about America. And he must like us because he's moved us to the top of the list. Not only will we get the face-lifted RS3, with its new, lightweight five-cylinder turbo motor crunching out 332 pound-feet of torque and 400 horsepower, we'll get it in a crisply styled three-box sedan. And we'll get it first, before even Germany (where it's built). The RS3's 2.5-liter five-cylinder has enough power to hurl it to 62 mph in 4.1 seconds and, thanks to launch control, the ability to do so repeatably. It's coming with a 155-mph top speed that can be raised to 174. It's coming with limpet grip from a rear-biased all-wheel-drive system. It's coming with a seven-speed dual-clutch transmission (and don't ask for a stick shift, because they haven't bothered to engineer one). It's coming standard (for the US) with constantly variable magnetic ride dampers, which replace the base fixed-rate steel spring-and-damper setup. But more than anything else, the RS3 sedan is coming here with that engine. It starts with a sharp braaap as it spins to around 4000 rpm and then a pop and bang that will wake the neighbors. And that's in the quieter default mode. It's like an angry man who always wakes up looking for a fight and, finding he can't get one, barks out the last word anyway. Except it never really goes quiet. It goes less loud, but not quiet. Quiet is not in the repertoire. The engine is what dominates this car and the noise dominates the engine. It's always there, always threatening, menacing, bellowing, barking, or popping and burbling. With a 1-2-4-5-3 firing order, the turbo five is a unique combination of belligerent and sophisticated, raucous and operatic, brutal and smooth, and often all of them at the same time.