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China's largest dealer body pushes back against foreign automakers over huge inventories

Do not think for a second that automakers forcing inventory on dealers in order to pad the numbers is a ruse known only in the US. Stories of individual brands have hinted at the trouble Chinese dealerships are having trying to move units as the country's economic growth remains hot but comes off the boil, like the one revealing that 95 percent of Toyota-FAW showrooms are losing money. Yet Toyota isn't the only culprit, and the issue has become so dire that the China Automobile Dealers Association (CADA), the largest dealer body in the country, has written to the government to complain. Chinese car sales are expected to close out the year with an annualized growth of six-percent, down from last year's 14 percent when targets were set, while in the background the pace of overall economic expansion is the slowest its been since the early nineties. Automakers, shipping cars on schedule to make their earlier targets, have blown up inventories such that they are an average of 1.8 times monthly sales, when the preferred multiplier is from 0.9 to 1.2. According to the CADA, the price wars and necessary incentives mean that only 30 percent of dealers are operating in the black. That number is down a whopping forty percent since 2010. In response, Toyota has already said it will not make its 2014 target of 1.1 million cars sold. We're a long way from 2012, when Toyota planned on selling 1.8 million cars in China in 2015, a target that's now as realistic as a manticore. BMW, Honda and Nissan have erased numbers on their spreadsheets, too; BMW growth dropped from 20 percent to 8 percent midyear after it began "reducing wholesale supplies," and Honda has been reworking its plans as sales have decreased each of the past six months. It's a big deal for Chinese dealers to begin protesting publicly, the CADA saying, "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable." With six-percent growth forecast for next year and dealers unwilling to remain underwater, The Year of the Sheep coming in 2015 could portend meaning beyond the zodiac. News Source: ReutersImage Credit: AP Photo/Andy Wong BMW Honda Nissan Toyota Car Buying Car Dealers

Honda claims another injury from Takata airbag failure

Honda has confirmed another injury caused by a faulty Takata airbag inflator in one of its vehicles. The incident occurred on March 20 in Florida to the driver of a 2003 Honda Civic, and according to Reuters, police and hospital reports indicated that shrapnel from the ruptured inflator struck the person in the neck. Honda has indicated that the owner was notified about the airbag at least four times – three of those for the driver's side. The mailings dated back as far as September 29, 2014, and as late as March 23, 2015, which was three days after the crash. The vehicle was eligible to receive new inflators on both sides. In March, Honda issued a high-profile warning to owners in newspapers and on the radio to get their cars fixed. The automaker also broadened its recall during the month to include 100,000 more vehicles, which brought the US total to around 5.5 million. So far, the faulty inflators have been linked to at least six deaths and 139 injuries. In one case, a woman in Florida has filed a lawsuit alleging that she became a quadriplegic when a piece of shrapnel in a 2001 Civic struck her in the neck, and an incident in Texas reportedly caused a man's death. Related Video: Statement from American Honda Motor Co., Inc. Re: Confirmed Rupture of Takata Airbag Inflator in Florida April 13, 2015 American Honda has confirmed that the Takata driver's airbag inflator ruptured in the crash of a 2003 Honda Civic on March 20, 2015 in Florida. This crash resulted in an injury to the driver of the vehicle. Our thoughts and sympathies are with the driver and his family during this difficult time. The legal representative of the owner involved in this incident has acknowledged in comments to media that a March 23, 2015 mailed notification was received by the owner. However, multiple mailed notices previously went to the same address, and none of these notices were returned as undeliverable. The vehicle involved in this crash is included in a recall affecting the passenger's front airbag inflator (14V-700) and a safety improvement campaign affecting the driver's front airbag inflator (14V-351), and our records indicate that neither of the necessary repairs was ever completed. American Honda has sent one mailed notice related to the passenger front inflator and three mailed notices related to the driver front inflator, the earliest of which was sent on 9/29/2014.

Analysts say Honda's growing woes in Europe not just the economy

There is no denying that the European auto market is taking its lumps right now - just ask Peugeot - but Honda might be taking this downturn on the chin a little harder than some of the other Japanese automakers doing business on the continent. Automotive News Europe is reporting that things have gotten so bad for Honda that it will be cutting 800 workers from Swindon, England plant that builds the CR-V, Civic and Jazz (a.k.a. Fit). This will be the first time Honda has made such cuts in more than 20 years.
Despite an increase in output last year over 2011 (165,607 units compared to 97,459), the Swindon plant is still running well below its full capacity (250,000/year), and its 66 percent capacity is less than the expected breakeven point of industry analysts (75 to 80 percent). Unlike in the US, however, Honda's new CR-V and Civic aren't selling well, and the similarly sized Nissan Qashqai is outselling the CR-V at a rate of more than five to one. Slow CR-V sales are blamed on a relatively high price and the crossover's conservative styling. On the complete opposite side of the spectrum, the report notes that Nissan continues to experience growth at its UK operations, leading analysts to suggest that Honda can't blame the sour economy for much of its woes.