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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

Toyota sizzle reel gives better look at i-Road Geneva concept

Toyota is taking the tiny tandem Tango to Tron town. In a teaser video for the new i-Road, debuting at the Geneva Motor Show next week, we catch a light-bike-like glimpse of Toyota's quirky tandem-seat concept. We still don't know much about the vehicle itself, but the video does flash the words "fun, compact, emissions-free," which suggests this is an electric ride. Then comes the apparent tagline: "i Roll, i Rock i Road." An indication that the tilting image we see in the video isn't just a special effect, perhaps? We'll have to wait until we get to Switzerland next week to find out. Until then, you can watch the video below.
In more earthly reveals, Toyota will also show off its hotly anticipate FT-86 Open sports car concept and Auris Touring Sports wagon on its Geneva show stand.

Import pickup truck-killing Chicken Tax to be repealed?

After over 50 years, the so-called Chicken Tax may finally be going the way of the dodo. Two pending trade deals with countries in the Pacific Rim and Europe potentially could open the US auto market up to imported trucks, if the measures pass. Although, it still might be a while before you can own that Volkswagen Amarok or Toyota Hilux, if ever. The 25-percent import tariff that the Chicken Tax imposes on foreign trucks essentially makes the things all but impossible to sell one profitably in the US, which lends a distinct advantage to domestic pickups. Both the Trans-Pacific Partnership with 12 counties and Transatlantic Trade and Investment Partnership with the European Union would finally end the charge. According to Automotive News though, don't expect new pickups to flood the market, at least not immediately. These deals might roll back the tariff gradually over time, and in the case of Japan, it could be as long as 25 years before fully free trade. Furthermore, Thailand, a major truck builder in Asia, isn't currently part of the deal, and any new models here would still need to meet safety and emissions rules, as well. Automotive News gauged the very early intentions of several automakers with foreign-built trucks, and they weren't necessarily champing at the bit to start imports. Toyota thinks the Hilux sits between the Tundra and Tacoma, and Mazda doesn't think the BT-50 fits its image here. Also, VW doesn't necessarily want to bring the Amarok over from Hannover. There is previous precedent for companies at least considering bringing in pickup trucks after the Chicken Tax's demise, though. The Pacific free trade deal could be done as soon as this fall, while the EU one is likely further out, according to Automotive News. Given enough time, the more accessible ports could allow some new trucks to enter the market.