AD #1223 – JV Probelms in China, Toyota Boosts U.S. Exports, BMW Downsizes M Engines

September 26th, 2013 at 11:45am

Runtime: 7:03

Several European automakers and their Chinese joint venture partners are battling over who gets to sell imported cars. Toyota will start exporting Corollas built in the U.S. to 18 countries in Latin America and the Caribbean. The new twin-turbo V6 in the upcoming BMW M3 will be the smallest displacement engine offered in that car in over two decades. All that and more, plus Autoline Daily correspondent Sean McElroy takes a look at the refreshed 2014 Toyota Tundra.

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Welcome to Autoline Daily, here’s some of the latest developments in the global automotive industry.

There’s a very interesting tug of war going on between three European automakers and their Chinese joint venture partners. It’s all about who gets to sell imported cars. Right now those imports are controlled by the European OEMs and sold in separate dealer networks. And they are a source of massive profits for those companies. Reports from China say Mercedes-Benz is battling with Beijing Auto over this issue, Jaguar-Land Rover is battling with Chery, and Volkswagen just agreed to let SAIC use its dealer network to sell imported vehicles. Here’s my Autoline Insight. This is going to hurt the profitability of these three European companies. Up to now, they did not have to split the profits of those imported vehicles. And the import market is booming in China.

Meanwhile, Volkswagen wants to increase its ownership in its joint venture with First Auto Works to 50% from the current 40%. But FAW says it’s not going to happen. Analysts in China say FAW would lose face and probably lose money if it gave up 10% equity in the joint venture. But FAW needs VW’s help in launching its own brand and they say it will probably have to give Volkswagen more ownership, but not 10%.

Toyota is boosting exports from the U.S. Last year, the company shipped more than 124,000 cars made in America, to 21 different countries, up 45%. And now Toyota just announced it will start exporting Corollas built in the U.S. to 18 countries in Latin America and the Caribbean next year. Production of the 2014 model begins in April and the company expects to ship 7,500 Corollas to the region during the first year of sales.

Hertz’s Dream Car program allows you to rent cars out of most people’s reach, including brands like Aston Martin, Lamborghini, Porsche and Ferrari. And now it’s adding another high scale brand to the list. Hertz customers can now rent the Tesla Model S and Roadster from its San Francisco and LA airport locations. But it ain’t cheap. Bloomberg reports that there are 5 models between the two airports which will cost $500 a day to rent.

Engine downsizing has been the name of the game at BMW’s M division in recent years and with the introduction of the new M3 sedan and M4 coupe comes yet another smaller unit. The new 3.0 liter twin-turbocharged inline-6 that replaces the outgoing 4.0 liter V8 is the smallest displacement engine that has gone in an M3 since 1991. It will officially produce 424 horsepower and what’s said to be significantly more than 370 pound-feet of torque. Despite being smaller it produces 10 more horsepower than the V-8 and should propel the new coupe to 60 miles-per-hour faster than the previous model, somewhere in the 4.5 second range. The coupe and sedan will make their official debut at the Detroit auto show and go on sale in mid-2014.

(Our Toyota Tundra overview is only available in the video version of today’s show.)

Don’t forget to join us tonight for Autoline After Hours. Our guest will be John Davis, the chief engineer of the Ford Fiesta ST, which I think is the best enthusiast car for the lowest price. So join me and the Autoextremist Peter De Lorenzo for the best insider information in the business. That’s tonight at 6 pm eastern time at

And that wraps up today’s report. Thanks for watching.

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45 Comments to “AD #1223 – JV Probelms in China, Toyota Boosts U.S. Exports, BMW Downsizes M Engines”

  1. Tony Gray Says:

    Will be fun to see how the new M3 handles. I thought my 335i Coupe was a wonderful car and putting an inline 6 back into the M3/4 gets it back into that exclusive cache that really made them what they are today. Let the others have their V6s and V8s…its inline Bimmer M Power baby!

  2. XA351GT Says:

    Interesting about the new Tundra. The front looks like a Ford the fender bulges like the GMC/Chevy twins. What no RAM in there? tisk tisk, still don’t know if it’s enough for them to climb up higher on the ladder. Glad to hear that they understand that Toyota styling is vanilla bland. That goes for nearly everything they sell. The new Camry is a little better, the Corolla is much better styled ,but the rest are really boring to look at.

  3. T. Bejma Says:

    Somehow I think that no matter the bickering, in the end the Middle Kingdom is going to win against the European OEMS. No sense fighting…

  4. C-Tech Says:

    It will be interesting to see where Tundra and Titan pick up (no pun intended) their sales. Ford, GM, and Chrysler pay particular detail to what owners and prospects want in their trucks and cater to them. There are a multitude of accessories available to adapt the trucks to your business or hobby. The Tundra is just not there yet.

  5. HtG Says:

    AAH Question

    I will give away one free Hyperloop ride around the Nurburgring to which ever panelist can explain what in the world is going on with the Chrysler IPO. Wait, I read it was a UAW IPO. Wait, today young Elkann warned that two companies was a different thing than one company. Wait, how can there be two Ron Blooms?

    (Elon Musk not included with Hyperloop)

  6. Bradley Says:

    ” Production of the 2014 model begins in April and the company expects to ship 7,500 Corollas to the region during the first year of sales.”

    Is that production for the exports? I think the 2014 Corolla is already on dealer lots, isn’t it?

  7. XA351GT Says:

    C-Tech @ # 4 ,also truck owners are very loyal to their brand of choice. It’s hard to get a substantial number of converts to really show a difference. They have to hope for a lot of 1st time truck buyers giving them a shot.

  8. Kit Gerhart Says:

    John Davis should be interesting. The Fiesta ST has one huge advantage over “higher” versions of most of today’s Fords. You can get it without MyFord Touch.

  9. Kit Gerhart Says:

    Yeah, I’ve already seen 2014 Corollas at the dealers. I think John meant that production “began” in April, rather than “begins” in April, as in April 2014.

  10. HtG Says:

    I saw a blue Corolla on the road the other day.

    Or didn’t I?

  11. Kit Gerhart Says:

    You probably did see one.

    Much to my surprise, one of the two I saw at the dealer where I bought my Prius, had a manual transmission.

  12. ColoradoKid Says:

    BMW – They downsize the engines …. while super sizing the size and weight . BMW’s M division has completely lost the plot


    Automotive privacy – On another site ( jalopnik ) today the question was asked .. and I paraphrase ;

    When will the government start spying on you thru your car ?

    Hate to tell y’all this ….. but if you’ve got OnStar .. MBrace etc or especially if you drive a TESLA S …. they already are …. even if you haven’t activated the system … wink wink


    America’s Youth – As their debts soar rapidly towards the stratosphere ( auto , college , credit card debt etc ) ….. their SAT scores are plummeting into the very depths of Hades ( CNBC etc )

    That sure as heck doesn’t bode too well for our overall future …


    HtG – 5 – You owe me one very long ride around the ‘ Ring ‘ there mien freund … though not in that stupid Hyper Umpa Loompa Musk(rat ) Thingy … I’ll have mine in a GT3 ….. Because you’ve already got the very correct and complete explanation … from me ….. so pay up …. or need I call the ‘ family ‘ in ? Ecco … va bene .. capire ??? ;-)

  13. ColoradoKid Says:

    5 – cont…..

    BWTM … yeah ….methinks ( along with several others more informed than I ) that Elkann the Elder ( the younger is still an idiot ) is finally beginning to realize he may be watching his and his party boy brothers entire inheritance going straight down the proverbial drain with Marchionne’s current sword waving …. and may FINALY be deciding to get directly involved before its all just a pleasant and over spent memory . We’ll see .

    And then …. there’s that Spectre lurking in the background just waiting to pounce like a hungry leopard in the middle of a wounded antelope herd . Now who could that Spectre be I wonder ? Vincenzo’s Ghost perhaps ? No… Not him . I know that guy ( as do you HtG ) …. hmmmm … I wonder ( as I wander ….. )

  14. ColoradoKid Says:

    For your $500 a day …Does that TESLA rental Hertz is offering come with a charger , free towing as well as a free prescription for anti anxiety meds ?

  15. HtG Says:

    12,13 The upper levels of the IPO strategy are too intriguing for me. The Consigliere di Firenze would even turn his head.

  16. pedro fernandez Says:

    Yesterday there was a report saying that Hertz’s profits were way down in the US, no wonder with this policy of renting expensive cars and instead should concentrate on the core business, families and businessmen just looking for a decent set of wheels at a good price. #14 with my luck, my rental Tesla will die out in East LA and I’ll become burrito meat!

  17. M360 Says:

    Tundra: “A level or rolling treeless plain,…, consists of black mucky soil”, according to Webster’s Dictionary. Why does Toyota want to call their truck “dirt”?

  18. pedro fernandez Says:

    John did say that Corolla will start production in April but there are already quite a few out there, they must have been made in Canada, although they also have an plant in Miss. I’m confused!!

  19. pedro fernandez Says:

    a word about engine downsizing, it must also be accompanied by weight and girth reduction otherwise what is the point? smaller engine pushing (pulling) heavier, larger vehicles? makes little sense.

  20. ColoradoKid Says:

    HtG – totally OT ( apologies to all the rest )

    This !–six-sonatas-for-violin-and-piano

    Sublime doesn’t even come close

  21. Kit Gerhart Says:

    This article indicates that the new Corolla has already started production, both in Mississippi and Ontario.

  22. pedro fernandez Says:

    I’ve been seeing quite a few brand new ’13 Corollas around here, I guess dealers are giving good discounts to get rid of them and when you consider that the drivetrain in the base models has not changed at all, it makes sense to get the outgoing model and save a few thousand bucks!

  23. Kit Gerhart Says:

    That’s especially true, if you want other than a “base” car, and don’t want the new CVT.

    Still, while the pundants are bashing the new Corolla, I suspect it will sell well, once the old ones are gone.

  24. cwolf Says:

    pedro,Hertz is down because their prices are above the others. And believe it or not, the car sharing programs are taking a toll on the rental market. Another interesting tid-bit; Though home sales have been on the incline, Hertz moving truck rentals have not experienced a proportional increase.

  25. pedro fernandez Says:

    cwolf wherever there is an Enterprise or Budget agency, they kick Hertz’s ass in price, albeit not in service or quality of their vehicles but people are just looking to save $$$. I know a frequent business renter who swears by National. Kit I wonder if long time Corolla buyers will shun the CVT and the “new” sophisticated engine and stick with the base, tried and true 1.8/4 speed auto. BTW I read a critical review of the Corolla saying that it’s a “rehashed” 2013 model, I don’t think so, the wheelbase has increased a lot and I don’t think you can do that with an existing platform.

  26. pedro fernandez Says:

    According to Autotrader, the same dealer in Fl has both 2013 and 2014 Corollas base automatics with only a $250 premium on the ’14. I find that hard to believe!!

  27. cwolf Says:

    A tradesman at the VW plant in Tenn. said those who filed a complaint against the UAW are very anti-union, perhaps have a cushy job or husbands with high incomes. The talk, he claims,is more about forced O/T and various unfair rules, rather than money. All is up in the air at present, but a birdie says plans for another transplant is already in the making.

  28. Kit Gerhart Says:

    I don’t rent cars often, but the last time I did, Avis was the cheapest in the Cocoa Beach area. That was ~5 years ago, though.

    I may have seen the same review bashing the new Corolla, Jalopnik at:

    They whined about it having the twist beam rear suspension, and the same engine, among other things. They don’t seem to realize that people who buy those cars don’t care, as long as the car keeps running.

    If I were buying a new car with the idea of keeping it for 20 years and 300K miles, a Corolla would be near the top of my shopping list, if they sold it as a hatchback here. I really like my Prius as a daily driver, but it’s not a car I would want to have when it’s 20 years old.

  29. Kit Gerhart Says:

    Yeah, unless I’m missing something, I’d much rather have the ’14 in base trim. It looks better, it’s roomier, and the interior is nicer. In base form, they have the same power train, so you wouldn’t need to worry about “teething problems” with the engine or transmission.

  30. pedro fernandez Says:

    #29 I agree with you, you gotta remember that the previous gen goes back all the way to 2003, that is a very long time to wait for a re-do in this competitive field and yet it was the best selling model in the segment for many years, even though new models of the competition were being introduced left and right and the critics bashed it incessantly but as you say loyal owners just want something that is gonna last a long time, low maintenance and decent mpg/s without exotic technologies.

  31. HtG Says:

    The one I saw coming at me was deep blue. With all its creases and bright elements, the ’14 is pretty exciting.

  32. cwolf Says:

    My soon to be new neighbor runs the finacial side of a dealer conglomorate in the area,which sells a few Japanese brands. He said,with the incentives, the 13 Corolla is sold out,Civics going fast and a waiting list grows daily for the Corolla shipments. For some unknown reason Prius sales have been flat. Are you guys seeing the same in your area?

  33. Kit Gerhart Says:

    The others are a little cheaper than a Prius, but not that much. The 2014 Corolla S at the local dealer was only about $1K less than a base Prius, MSRP, but, I think, had a sun roof.

    I’d buy a Prius over a US Corolla or Civic, just because it’s a liftback, but that’s just me.

    A basic Corolla would be $3-4K less than a Prius, which would help sales.

  34. HtG Says:

    20 my shipment is being prepared. KJ, eh?

  35. pedro fernandez Says:

    I think a lot of people are put off by the looks of the Prius plus they think it’s a lot more expensive than it is, Toyota should put out ads showing the real cost of the car.

  36. ColoradoKid Says:

    27 .. Thanks for filling in the details Cwolf … I was wondering what all the commotion today was about over VW way with the Unions


    HtG – 34 – Good ! Thought you’d appreciate that . Yeah I’ve been a KJ fan since 1972 .

    BTW … heres one last attempt to outline the Marchionne vs UAW – VEBA thingy … lets see how this sits with ya ;

    1) In order to access Chryslers cash reserves for any purpose other than for Chryslers benefit … FIAT SpA must buy out the UAW-VEBA shares ( the one intelligent stipulation of all the bailout agreements and the only one Obama has held true to)

    2) Marchionne has made a pennies on the dollar offer to buy those shares from the UAW-VEBA and acquire access to Chryslers cash reserves … for which the UAW-VEBA wisely told Sergio where to shove it

    3) After repeated attempts to ‘ sell ‘ con or manipulate [ don't bet against the current Cherokee delay being a part of that ] the UAW-VEBA on his pathetic offer … Marchionne then tried [ again ] recently to get an IPO for FIAT SpA in order to raise enough cash to buy out the UAW-VEBA’s shares at a reasonably fair price ( you already know why he cant get an IPO for FIAT )

    4) In response … the UAW-VEBA has forced the situation … which is their right as 2nd largest shareholder … to get an IPO for Chrysler ( not FIAT SpA ) which would then pay off the UAW-VEBA shares …. as well as keep Chryslers cash reserves the ____ out of Marchionne’s hands [ unless he can come up with the cash to buy out the new shareholders] because FIAT will still not have enough controlling shares to meet the required stipulations … thereby both protecting the UAW’s current and future Health Care … as well as keeping all of Chrysler’s cash reserves being used for Chryslers benefit only …. not to bail out FIAT SpA ( yes … all of it .. even Ferrari w/all their Middle Eastern monies etc is on the ropes ) .. which is what Marchionne wants that money for

    Capire ? That any clearer mien freund ? Cause yeah if you don’t break it all down into its most basic elements it can get a bit overwhelming and confusing … but … errr … pay up ! :o

    Five laps around the ‘ Ring ‘ in either a self driven GT3 … or sitting passenger w/ Sabine the Ring Queen in what ever she’s driving these days ( just ribbing you a bit HtG )

    Enjoy the CD .. it is exquisite …

  37. Richard Arnold Says:


    You may want to correct the typo in the intro para above: “V6″ should be spelled “inline-6″ as it is correctly shown in the “SMALL IS BEAUTIFUL” para.

    Your hunting buddy,
    Dick Cheney

  38. T. Bejma Says:

    Toyota continuing their dubious honor of being the recall Queen with over 600,000 Sienna minivans for faulty shifters…

  39. HtG Says:

    36 I’m not there yet. Yesterday, I read that Elkann said the IPO creates two companies, and that this is different than one. What’s he saying? Was that a threat?

  40. ColoradoKid Says:

    The ‘ median ‘ new car price is now …….. $37,000 + ???
    ( 4th story down )

    Hey !!! . That makes ‘ Franz ‘ median ! Yayyyyyyyyy … Im not a perceived ‘ snob ‘ anymore and am simply just …. median … now I know I’s keepin him …. yayyyyyyyyyyyyy ( remember with the hail damage discount and my bargaining that was the price I leased ol Franz for despite all the ‘ goodies ‘ he came with )

    But errr ….. $37k + as a median … is IMO …. more than a bit scary …. Damn frightening in fact …

    39 – If the ‘ Chrysler ‘ IPO succeeds ( and I hope it does ) that will create a major division of authority etc between Chrysler and what would then be its partner FIAT SpA …. rather than its current ‘ owner ‘ FIAT SpA

    Capire ? And no …. thats not a threat from Elkann … thats the voice of abject fear raising its ugly head . Seriously …. he and the bro are staring down the throat of a Black Hole when it comes to grand pa’s legacy he left them ..

    Question being … does either of the Elkann’s have the stones or the brains to do something about it before its too late ?

    I for one … kind of doubt it . Both being more party/playboy/jetsetter … than businessmen

  41. cwolf Says:

    HtG,the Kid won fair and square. How can an IPO create two companies when they already remain so? Only when Fiat SpA purchases VERBA shares can the two become one. The threat is only a scare tactic to discourage potential investors and effect stock value, so the shares can be bought quickly and on the cheap. Marchionne wants that 14B Chry has real bad and will gladly (F…) the retired workers to just the moola! When all is said and done, I think Marchionne and the UAW will settle behind closed doors.The UAW has to fulfill its obligations to the retired or risk loosing present/future members. VW workers may view this as “weak” if the UAW gives in. The UAW will call his bluff… and that’s what it is; a bluff!

  42. ColoradoKid Says:

    Well … thats all from me for today …. SG returns from a ‘ business ‘ trip …. and we’ve got the weekend planned

    See y’all Monday and ……

    Rock On – Drive On – Remain Calm ( despite the idiots in DC ) and Carry On ( my wayward son(s) ;-)

  43. HtG Says:

    40,41 Yes, these are the contours of the matter. Now let’s see how Wall Street figures out how to make out with the pricing event. The players are building leverage. I’m a little surprised there hasn’t been more fuss in the media.
    42. I need to step away from the computer. I could sense something was different at chez CK.

  44. Kit Gerhart Says:

    I guess I buy cheap cars, even more than I realized. The most expensive car I’ve ever bought new was about $13K below the median.

  45. pedro fernandez Says:

    #44 Ditto, my friend