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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

New BMW i3-like Visio.M EV concept uses lightweight resin

It's not a new version of the BMW i3, but an updated version of a lightweight concept car from SABIC, BMW, the Technical University of Munich, Daimler and others does bear a certain resemblance to the well-designed plug-in city car. From the black "glass" in the hatch to the angled line tail lights to the up-and-down window line, you can see a sort of family resemblance (see an i3 comparison photo here). And, of course, they both have an electric powertrain. But the changes made to the new lightweight urban electric concept vehicle is more of an exercise in what's possible rather than a way to evolve the i3 and i8 into a broader i family of vehicles. Even so, what we see here is interesting, since SABIC found all sorts of new ways to take weight out of the car as part of the Visio.M (Visionary Mobility) project, which was first announced in 2012. Let's start with the window material, which as you might guess from the quotation marks above, is not made of glass but is instead SABIC's Lexan polycarbonate (PC) resin plastic. The lower weight (the PC helps shed about 29 pounds) adds two miles of range while the PC resin has better thermal conductivity compared to glass and so does even more because the HVAC system can be more efficient. According to SABIC's computational fluid dynamics analysis, an extra 9-10 miles of range, in fact. Without the battery, this concept weighs just 992 pounds. Remember, BMW already made a lot of weight-reduction measures in the i3 thanks to carbon fiber reinforced plastic, so to make the "glass" lighter would only help boost efficiencies on a production vehicle that uses a resin like this. Read more below. SABIC's LEXAN™ resin delivers weight savings and thermal efficiency for new ultra-lightweight electric car concept developed by BMW-led Visio.M Consortium Munich, October 20, 2014 Today, at the Technical University of Munich (TUM), BMW, Daimler, TUM scientists and a consortium of industry participants showcased a lightweight urban electric concept vehicle with various advances, including an all-plastic design of the car's windows. The windows are made of LEXAN resin, a polycarbonate (PC) material, and coating technologies from SABIC, a leading developer of PC glazing for automotive windows and many other thermoplastic solutions for the automotive industry.

Ford, GM still doing new business with Takata amidst airbag crisis

Lengthy vehicle development times make it difficult for automakers to cut and run from the supplier. You might expect automakers to be fleeing any connection with beleaguered supplier Takata in the wake of the company's exploding airbag inflator crisis. After all, with a Senate hearing, pending lawsuit, plummeting stock value and demand for a national recall, the tier-one supplier isn't at its strongest right now. However, years of cooperation mean that automakers are standing by Takata, and necessity may be playing a role, as well. About 39 percent of Takata's business comes from airbags, and seatbelts make up another significant chunk of the operation too, says Bloomberg. The long-term relationships and lengthy vehicle development times make it difficult for automakers to cut and run from the supplier. "Takata has so much product breadth that I don't really see that they could just disappear," said AutoPacific analyst Dave Sullivan to Bloomberg. For example, Takata helped develop the unique front center airbag with General Motors in models like the Chevrolet Traverse and Buick Enclave. Outside of safety tech, it is also a partner with Ford on the adaptive steering system available on the upcoming 2015 Edge. These long-lasting partnerships make change difficult now that there's a problem. According to Reuters, automakers claim it would take a year or longer to set up with a different supplier for replacement airbag inflators. Switching to a completely different part for the repairs might not be a viable option either, because of the engineering time needed. BMW is taking action, though. According to Reuters, the Bavarian brand is working with the supplier to move inflator production from Monclova, Mexico, to a Takata factory in Freiburg, Germany. The Mexican plant may be the source of some of the faulty parts. News Source: Bloomberg, ReutersImage Credit: Jens Meyer / AP Photo BMW Ford GM Safety Takata airbag recall