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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 diverting a third of R&D budget to electrification

Companies make promises all the time. We'll do X by Y. The new A will be our biggest seller in B. You know the drill. But it's when an automaker puts its money where its mouth is that we really stand up and take notice. That's precisely what Audi is doing as it attempts to convert 25 percent of its sales to electrified vehicles by 2025. Citing two sources with knowledge of Audi's plans, Reuters reports that around a third of the company's research-and-development budget will go to " electric cars, digital services, and autonomous driving." Of course, shifting that much money over to newer technologies means sacrifices elsewhere – Reuters' sources claim Audi will move money away from combustion engines and reduce country-specific powertrain variants, but the sources wouldn't get more specific. According to Reuters, Audi is 22nd in total sales of hybrids and EVs. That's eight spots behind Mercedes and ten spots behind BMW (not to mention hybrid-happy Lexus). Audi's only electric representatives in the US market are the A3 e-Tron and Q5 Hybrid and things aren't much better in Europe – the company needs to dump buckets of money into expanding its meager lineup to bring up the percentage of EVs it sells. Expect greater detail on Audi's electrification plans very soon – CEO Rupert Stadler will discuss the company's path forward on Wednesday at a closed-door meeting in Munich with over 2,000 managers. It's unlikely all those managers will be able to keep quiet. We'll be listening. Related Video: Featured Gallery Audi E-Tron Quattro Concept View 36 Photos News Source: ReutersImage Credit: Audi Green Audi Volkswagen Green Driving Electric Hybrid PHEV e-tron audi e-tron electrification

Audi features Google Android infotainment system in Q8 Sport concept

Volvo isn't the only company working on a Google Android-based operating system. Apparently Audi has bestowed the Q8 Sport, revealed at the Geneva show, with an infotainment system based on Google's Android operating system, rather than a proprietary one. The company revealed the system at the Google I/O conference. The system is controlled via the Q8 Sport's touchscreen, and should function like a normal Audi infotainment system. However, this one comes with applications such as Google Play Music, Google Assistant, and Google Maps built-in. Audi also says that running an infotainment system on Android should make it easier for applications and updates to be developed for the automotive version, since it won't require developers to learn to code for a single car line's completely unique and different operating system. Unlike Volvo, though, Audi doesn't have a timeline for introducing Android infotainment systems. The Swedish company announced that its Android-based system will be in production cars within the next two years. Related Video: