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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.

Weekly Recap: 2016 CTS-V gives Cadillac new momentum for the new year

It's been a rough year for Cadillac. The historic luxury carmaker been in the news for all of the wrong reasons: Declining sales, ditching its advertising agency and the relocation of its headquarters from Detroit to New York. But in late December, Cadillac reminded everyone what it does best: Build some of the rawest and most compelling luxury sedans in the world, as evidenced by the 2016 CTS-V. This monster churns out 640 horsepower from a supercharged 6.2-liter V8. Sound familiar? That's the Corvette Z06 engine, and it makes this CTS the most powerful production Cadillac ever. It also puts the sporting divisions of the Germans on notice. The new CTS-V easily overpowers the Mercedes-Benz E63 AMG S 4Matic and its 5.5-liter biturbo V8 rated at 577 hp, and the BMW M5 (with the competition pack) and its 4.4-liter twin-turbo V8 that pushes out 575 hp. The rear-wheel drive Cadillac can sprint to 60 miles per hour in 3.7 seconds, which is close to the 3.5-second time turned in by the 4Matic-driven E63 S, and a bit quicker than the 4.1 seconds posted by the M5. With Magnetic Ride Control, General Motors' stout eight-speed automatic transmission (also used in the Corvette), Brembo brakes and a carbon-fiber option package that pretty much builds your car out of carbon fiber – it's clear this Cadillac means business. Truth be told, we expected this CTS-V to deliver. It's been a serious sports sedan for a decade, and the recent generation and its 556-hp arrogance have been particularly memorable. But notice what we're doing here? We're talking about product. Not who makes Cadillac's ads, or if the brand's headquarters has a mailing address in NYC. Like the 2016 ATS-V that's due in the spring, the debut of the 2016 CTS-V (on sale in late summer) is a shot in the arm for Cadillac, and its arrival comes during time of transition. The brand is trying to reinvent itself as a modern luxury maker. It wants new customers, a different image and obviously more sales. Those things are going to take time, but with a 640-hp sledgehammer of a sports sedan on tap for next year, Cadillac can still maintain some of its swagger through all of the change. Other News And Views 1984 Audi Sport Quattro heads for the auction block If you're into '80s rally cars, you're really a car person. But if you're into that stuff – and we are – this 1984 Audi Sport Quattro is sure to get your blood flowing.

Comparing Cadillac's crazy classy coupes

I just returned from the press launch of Cadillac's new ATS-V, a high-performance version of the US luxury marque's entry-level compact car. While ordinary ATVs offer a choice of a 202-horspower, 4-cylinder, a 272-hp turbocharged four or a 321-hp V-6, this one packs a twin-turbo V-6 that pumps out 464 thoroughbred horses and 445 pound-feet of hard-charging torque. Starting at $62,000 for the sedan and $64,000 for the sexy coupe, ATS-Vs are available with a 6-speed manual (with Active Rev Matching and no-lift shift capability) or an 8-speed automatic with steering-wheel shift paddles. They comes with GM's latest 4-mode Magnetic Ride Control, 5-mode Performance Traction Management (with launch control), competition-spec traction and stability controls, an electronic limited-slip differential, specially-tuned electric power steering, huge Brembo brakes, and added air cooling for their engine, transmission, and rear axle lubricants. They roll on 18-inch Michelin Pilot Super Sport tri-compound summer tires on 9-inch-wide front alloy wheels and 9.5-inch-wide rears. And they will rocket from rest to 60 miles per hour in less than four seconds while delivering 16 city EPA miles per gallon and 24 highway with the automatic and 17/23 with the manual transmission. The obvious purpose of all this technology is to effectively endow Cadillac's latest V-Series models with a rarely achieved true dual personality: go, stop, and corner like race cars on a track, then sooth, coddle, and entertain like luxury cars on the way to and from the track, or work. We had ample opportunity to verify both personalities with multiple hot laps of the Circuit of the Americas (COTA) Grand Prix course, followed by a more leisurely drive on public roads near Austin, TX. Even lacking wheel-to-wheel comparisons, we believe these hot new ATS-Vs are fully competitive with their pricier German competitors, and probably superior in some ways. So now, Cadillac will offer not one but two very sharp-looking, upscale, small-volume, 2016 compact coupes, almost the same size and at similar prices, but with totally different missions: this new high-performance ATS-V and the soon-to-be-upgraded ELR extended-range EV. The key question: why? Aside from its cramped back seat and ridiculous $76,000 starting price, I loved the ELR when it was introduced for 2014.