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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's EV tech is being used to resurrect the Karma

Saying that luxury electric-vehicle manufacturer Fisker was beleaguered before its demise a few years back would be a gross understatement. But despite the cars self-immolating and Tesla CEO Elon Musk criticizing everything but the Karma's design, a Chinese auto parts manufacturer is resurrecting the brand under a different name: "Revero." That's according to a report from Wall Street Journal. Wanxiang Group is moving production to EV-hotbed California from Finland and will unveil its new ride either in July or August, but pricing hasn't been announced yet. The previous Karma sold for $100,000. Perhaps most interesting, though, is how it's going to address the reliability issues that plagued the company's predecessor. WSJ says that the automaker is licensing BMW's electric vehicle control and charging systems – a deal finalized last year. "There are huge, serious, major upgrades throughout the electronics systems, wiring, charging, battery," Karma's chief marketing officer Jim Taylor says. In terms of looks, though, it doesn't sound like you should expect anything to change in that department because the overhauls aren't going to be visible, according to Taylor. Wanxiang picked up Fisker's remains for $149 million a few years back. This deal is important, especially for BMW: If the German automaker's licensed tech can help Fisker outrun its smoky, checkered past, that's a high-profile win for everyone involved. Related Video: This article by Timothy J. Seppala originally ran on Engadget, the definitive guide to this connected life. News Source: Wall Street Journal Green BMW Fisker Electric Future Vehicles Special and Limited Editions Performance Sedan transportation gear karma revero

Translogic 189: 2015 LA Auto Show

The LA Auto Show has become known for its green cars and concepts, and 2015 was no exception. Translogic host Jonathon Buckley gets all the details on BMW's 330e plug-in hybrid straight from BMW President of North America Ludwig Willisch. Then we get up-to-date on Honda's latest FCX Clarity hydrogen fuel cell car. We round out our tour with a stop at the Elio Motors booth for a look at their updated, three-wheel P5 concept and a chat with CEO Paul Elio. But first, we jump in a time machine at the Volvo booth to discuss Concept 26, an interpretation of how car interiors might evolve in the era of self-driving cars. "The reason why we talked about it as a time machine [is] because, really, Concept 26 is giving you back something that is so precious," explained Volvo senior director of design Tisha Johnson. "We're letting you delegate driving to the car, so that you can then have that time to yourself." Click here to learn more about our host, Jonathon Buckley.