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Dealers mobilize to protect their margins from automaker subscription services

Six individual auto brands — Lincoln, Cadillac, Porsche, Mercedes, BMW and Volvo — have established or are trialing a vehicle subscription service in the U.S. Three third-party companies — Flexdrive, Clutch and Carma — run brand-agnostic subscription services. And three automakers — Mercedes-Benz, BMW, and General Motors — have also launched short-term rental services. Dealers, afraid of how these trends might affect their margins, are building political and lawmaking campaigns to protect their revenue streams. So far, three states are investigating automaker subscriptions, and Indiana has banned any such service until next year. It's certain that those three states are the first fronts in a long political and legal battle. Powerful dealer franchise laws mandate the existence of dealers and restrict how automakers are allowed to interact with customers to sell a vehicle. On top of that, Bob Reisner, CEO of Nassau Business Funding & Services, said, "Dealers and their associations are among the strongest political operators in many states. They as a group are difficult for state politicians to vote against." In California earlier this year, the state Assembly debated a bill with wide-ranging provisions to protect against what the California New Car Dealers Association called "inappropriate treatment of dealers by manufacturers." One of those provisions stipulated that subscription services need to go through dealers, but that item got stripped out when dealers and manufacturers agreed to discuss the matter further. In Indiana, Gov. Eric Holcomb signed a moratorium on all subscription programs by dealers or manufacturers until May 1, 2019, to give legislators more time to investigate. Dealers in New Jersey have taken their campaign to the state capitol, asking that the cars in subscription programs get a different classification for registration purposes. Automakers run the current subscription services and own the vehicles. Sign-ups and financial transactions happen online or through apps, leaving dealers to do little more than act as fulfillment centers to various degrees, with little legal recourse as to compensation amounts when they're called on to deliver or service a car. That's a bad base to build on for business owners who've sunk millions of dollars into their operations.

BMW Recalls 1.6 Million 3 Series Cars For Air Bag Problem

DETROIT (AP) - BMW is expanding a recall of its most popular models to fix an air bag problem that is hitting much of the global auto industry. The German automaker says it will recall 1.6 million 3 Series cars from model years 2000 to 2006 across the world, including 574,000 in the U.S. The company said Wednesday that it's a precaution because other automakers using similar systems have reported problems. Air bag inflators in systems made by Takata Corp. can rupture. If that happens, the bags might not work properly, and shards could fly out and cause injury or death. The problem is responsible for millions of recalled vehicles during the past few years made by manufacturers such as Chrysler, Ford, Honda, Mazda, Nissan and Toyota. Here's a look at the long history associated with this problem, that affects millions of cars. BMW said it has no reports of problems in its vehicles. Dealers will replace the passenger-side front air bags. The new recall excludes 42,000 BMWs recalled in May 2013 for the same problem. The company says it is recalling all vehicles equipped with potentially faulty air bag systems regardless of where they were sold. In June, the U.S. National Highway Traffic Safety Administration began investigating air bags made by Takata, a Tokyo-based supplier of seat belts, air bags, steering wheels and other auto parts. The agency said it received six reports of air bags rupturing in Florida and Puerto Rico. Three people were injured in those cases. It had estimated 1.1 million vehicles in the U.S. could be affected, but the total is likely to climb. The government says it wanted to act quickly in warm states while it continues to investigate the issue. "Based on the limited data available at this time, NHTSA supports efforts by automakers to address the immediate risk in areas that have consistently hot, humid conditions over extended periods of time," the agency said in a statement. Takata said in a statement Tuesday that it is supporting the NHTSA investigation and its customers with technical analysis and replacement parts. "Our objective is to do all that is possible to ensure the safety and well-being of the public," the statement said. Related Gallery AOL Autos Test Drive: 2014 BMW 428i

Mercedes and VW battling Uber and Apple to spend billions on Nokia mapping division

Whether for autonomous driving or simply better navigation, digital mapping is closely linked with the future of motoring. The sale of a major player in that industry is spurring a showdown between automotive behemoths and tech giants, and it's a fascinating battle to watch unfold. Nokia is selling its Here mapping division, and while the company might not have the name recognition of Google, it controls about 70 percent of the auto market. The business is valued at $785 million, according to Reuters, but is likely to sell for significantly more. Case in point: Uber reportedly submitted a $3 billion bid. Apple has also been rumored to be among those interested in purchasing Here. A trio of German automotive heavyweights is mounting a challenge to Silicon Valley, though. According to Reuters speaking to two unnamed insiders, Daimler, BMW, and Audi are teaming up to submit a joint bid for an undisclosed sum. They're worried that if Here falls under the control of tech companies, then automakers might have limited availability to these vital maps in the future. Nokia bought Here for $8.1 billion in 2007, according to Reuters. The company operates a fleet of vehicles with cameras and LIDAR that drive around the world to create high-definition maps. It also generates even more information by using the GPS data from shipping and trucking companies.