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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

UPDATE: Porsche could raise its stake in Rimac, and Rimac weighs in

CLARIFICATION: An earlier version of this Reuters story said Porsche could raise its stake in Rimac to nearly 50%, but Rimac reached out to Autoblog to say that's not so. Here is a statement from Mate Rimac: "We have a very strong partnership with Porsche that is key for Rimac Automobili. Porsche is a shareholder in Rimac since 2018 with 15.5% ownership currently, accumulated over several rounds of investment. While it is true that we are discussing further expansion of this collaboration that will lead to increase of Porsche's stake in Rimac Automobili, some media have mistakenly reported that Porsche would take over 50% or nearly 50% of the company.   We are very happy that the partnership with Porsche will strengthen even further, but it is in the interest of both Rimac and Porsche that Rimac is a fully independent company. We are working with many car companies that are not our shareholders and there is a clear separation between shareholding and projects. It is very important to us that our industry customers have the peace of mind that Rimac is independent and that there is an "Information Firewall" between projects and shareholders (not only Porsche, but also Hyundai and others) - and this will not change. Confidentiality is very valued in the industry and one of the basics for collaboration between companies. Our shareholders are happy with such an arrangement and expect the same level of professional behaviour and confidentiality for their projects and customer projects.   So, the point is: Porsche's stake will increase but nowhere near to 50% and Rimac will remain independent with many industry customers that are not our shareholders/investors." The original story, with the 50% reference removed, appears below.   FRANKFURT — Volkswagen unit Porsche is participating in a financing round of Rimac Automobili that will see the electric supercar maker raise 130 million-150 million euros ($157 million-$181 million), its owner Mate Rimac told weekly Automobilwoche. The fundraising should be completed in two to three months and another round is planned at the end of the year, Rimac told the trade journal. Porsche owns a 15.5% stake in Rimac Automobili and could raise its stake in a deal that would also include the transfer of Volkswagen's supercar brand Bugatti to Rimac, Automobilwoche said. Volkswagen and Rimac were not immediately available for comment on Sunday.

Porsche 911 GTS gets Rennsport Reunion Edition

Porsche is taking over Mazda Raceway Laguna Seca this weekend to celebrate Rennsport Reunion V. In addition to some beautiful cars on display, it's giving the brand's superfans something extra special by unveiling the 911 Carrera GTS Rennsport Reunion Edition there. Limited to only 25 examples, they're exclusively for customers in North America. As the model's name implies, this special edition is mechanically based on the 430-horsepower 911 GTS, and gets a manual gearbox and PASM Sport Suspension. Porsche Exclusive then applies special styling bits to each one. For the exterior, paint is a custom shade called Fashion Grey, with black-and-red decals applied to the hood, roof, decklid, and doors. To complete the fashionable look, gloss black adorns the radio antenna, around the LED headlights, the lower part of the mirrors, and 20-inch Sport Classic wheels. The interior offers some sportiness with carbon fiber dashboard trim, a SportDesign steering wheel, and 18-way Adaptive Sport Seats Plus. A little extra flash comes from Carmine Red for the seatbelts, tachometer and much of the stitching. As a nod to the event, a Rennsport Reunion V logo is also on the center console lid. With such a low production run and a price of $149,330 with the $995 destination charge, this is a way to proclaim a serious passion for Porsche. Related Video: PORSCHE 911 CARRERA GTS RENNSPORT REUNION® EDITION DEBUTS IN MONTEREY 25/09/15 Special edition model limited to 25 units worldwide built by Porsche Exclusive Atlanta, Georgia. In honor of the fifth Rennsport Reunion®, Porsche has unveiled a special edition of the 911 Carrera GTS at this year's gathering at Mazda Raceway Laguna Seca. The Rennsport Reunion Edition is limited to 25 units worldwide and will be sold exclusively in North America. Built by Porsche Exclusive, the Rennsport Reunion Edition is based on the 430 hp 911 Carrera GTS. The limited edition production model is painted in the custom color Fashion Grey. Decorative black and red decals cover the front hood, the roof, and the rear decklid. The driver and passenger doors are decorated with black and red decals featuring the PORSCHE logotype. 20-inch Sport Classic wheels painted in high-gloss black give the Rennsport Reunion Edition a very striking appearance. The lower exterior trim of the side mirrors as well as the satellite radio antenna are also finished in high-gloss black. LED headlights in Black including PDLS Plus complete the black accents on the exterior.