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Mazda previews straight-six, affirms upcoming crossover with Toyota hybrid system

Buried in Mazda's generally bleak second-quarter earnings report were a few juicy nuggets of news. Though the company had an operating loss of $502 million and sales are down 21 percent in part due to the COVID-19 pandemic, the Hiroshima-based firm has big plans for the future. Enthusiasts and environmentalists alike should take note. Firstly, Mazda showed an image of its upcoming straight-six engine. Essentially, it's the SkyActiv four that powers all of Mazda's current lineup, but with two additional cylinders. Unsurprisingly, the company says that it can be engineered to fit any of the current SkyActiv guises — the standard octane-variable gasoline powered G, the diesel D, and the sparkless-ignition X. The big six will pair with a new eight-speed automatic and can be combined with either a plug-in or 48-volt mild hybrid system, promising big power and efficiency. Reassuringly, Mazda says it's committed to offering this six in a rear-wheel-drive platform, which will underpin the 6 sedan's successor, as well as a midsize SUV. Both the platform and powertrain are said to be compatible with all-wheel-drive layouts as well. Which brings us to the second bit of news. Mazda also pictured a four-cylinder engine with hybrid technology. The financial report confirmed that Mazda will employ  Toyota's wildly successful hybrid system in an upcoming SUV. It's not that Mazda is taking advantage of Toyota's free access to all its hybrid patents until 2030. Mazda and Toyota have a capital tie-up and are nearing completion on a $2.3 billion joint-venture factory in Alabama with a 300,000-vehicle annual capacity. According to the Huntsville Business Journal, the firms have hired 750 employees so far, with room for 3,250 more. In return, Mazda will launch a European compact based on Toyota's Yaris Hybrid. The move is necessary for Mazda, which has lagged behind in electrification and in meeting the fleet emissions requirements in the European market. In return, by 2022, Mazda may even share the inline-six engine with Toyota and Lexus. While the hybrid crossover and compliance with EU rules will no doubt help the environment, we not-so-secretly hope that these strategies will keep Mazda profitable enough to bring that straight-six, rear-drive sports sedan to market.

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 cuts production target by 300,000 vehicles due to parts and chips shortages

TOKYO - Toyota cut its annual production target by 300,000 vehicles on Friday as rising COVID-19 infections slowed output at parts factories in Vietnam and Malaysia, compounding a global shortage of auto chips. "It's a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact," Kazunari Kumakura, an executive at the world's biggest car maker, said after the company revised its production target. Unlike other big global automakers that were forced earlier to scale back production plans, Toyota had managed to avoid cuts to output because it had stockpiled key components along a supply chain hardened against disruption following northeast Japan's devastating earthquake in 2011. Toyota's announcement on Friday is a further sign that no part of the global car industry has escaped the affects of a pandemic that has sapped sales and is hobbling its ability to take advantage of the recovery in demand that followed the initial waves of COVID-19. Car sales in China in August fell by almost a fifth from a year earlier because there were fewer vehicles for people to buy. Toyota now expects to build 9 million vehicles in the year to March 31, rather than 9.3 million. It did not revise its 2.5 trillion yen ($22.7 billion) operating profit forecast for the business year. Adding to a 360,000-vehicle cut in worldwide production in September, Toyota said on Friday it will reduce output by a further 70,000 this month and by 330,000 in October. It hopes to make up some of that lost production before its year-end. Demand for chips has soared during the pandemic as consumer electronic companies rush to meet stay-at-home demand for their smartphones, tablets and other devices. A heavy reliance on Southeast Asian factories for parts is a headache for Toyota, but its also a problem for its rivals that have struggled with what Volkswagen has described as "very volatile and tight" chip supplies. The German carmaker has warned it may need to cut production further as a result. Ford last month shut down production at a plant in Kansas that builds its best-selling F-150 pick up because of parts supply woes, with Renault extending partial stoppages at factories in Spain. Mercedes this month said it expects chip shortages to significantly lower third quarter sales. (Reporting by Tim Kelly; Editing by Muralikumar Anantharaman and Kim Coghill) Plants/Manufacturing Lexus Toyota