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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's Lentz says fuel cells are the future, not EVs

Toyota is not bullish on EVs. That comes from the company's North American CEO, Jim Lentz, who said the company will focus not on electrification, but on continued hybridization with a long-term focus on hydrogen fuel cells.
Lentz questioned the long-range ability of EVs, saying that Toyota feels "there are better alternatives, such as hybrids and plug-in hybrids, and tomorrow with fuel cells." Lentz spoke about Toyota's focus on hydrogen following Forbes Brainstorm Green conference and barely a week after a battery deal between Tesla and Toyota ended, according to Automotive News.
That deal provided for 2,500 battery packs for the Rav4 EV. While valuable to Toyota, the deal "was never about open-ended volume," Lentz said. "It was time to either continue or stop. My personal feeling was that I would rather invest my dollars in fuel cell development than in another 2,500 EVs."

Toyota Aygo X-Wave pops its top

Chop the top off a car and you'll let the sunshine and warm air in, but you'll also get a car that's heavier, less rigid and costlier. That's why European hatchbacks in particular have been increasingly favoring retractable fabric roof panels that keep the structural integrity in tact while letting the sunshine in. The Fiat 500C, Citroen DS3 Cabrio and Renault Twingo all offer this type of setup – as do the Peugeot 108 and Citroen C1, and now their Toyota platform-mate is following them down the same path. Recently announced in the UK is this Toyota Aygo with X-Wave roof option. It's a black canvas panel that opens up the space above both rows of seats at the push of a button. Unlike the roofs on some of the other aforementioned European city cars, it doesn't extend all the way down to the base of the back window, but that just means it doesn't stack up and impede cargo space and rearward visibility. Toyota is bundling the X-Wave roof option with additional equipment like upgraded lighting, infotainment system and alloys for GBP895, taxes included (equivalent to $1,355 at today's exchange rates). That's a lot less than Fiat, for example, gets for upgrading from a 500 to a 500C on either side of the Atlantic. It's also even less than Peugeot and Citroen charge for similar options on their versions of the same vehicle in the UK, and that strikes us as a pretty cost-effective way to go motoring with the top down. LESS METAL, MORE FUN WITH AYGO'S X-WAVE OPEN TOP OPTION How do you make driving a Toyota Aygo even more fun? One sure-fire way is to provide some classic open-top enjoyment with a new retractable x-wave canvas roof. Looking ahead to longer, warmer days, Toyota has launched the x-wave as an option on the five-door Aygo x-pression model. Finished in black, the roof is factory fitted and is full length, ensuring that anyone travelling in the rear seats also gets to enjoy some of the wind-in-the-hair experience. The roof is electrically operated, using a simple switch next to the map light control in the headlining. Specifying the x-wave adds even more appeal to the Aygo x-pression, which also features 15-inch alloy wheels, front fog lamps, projector headlights with LED daytime running lights, the x-touch multimedia system with DAB and Bluetooth, reversing camera and air conditioning.