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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.

Cadillac teases camo'd ELR ahead of Detroit debut

With the 2014 Cadillac ELR being introduced next week at the Detroit Auto Show, General Motors has revealed another picture of its luxury range extended electric vehicle. Last month, we saw a dark, teaser photo showing some of the body detail for the electric coupe, but this recent photo shows the Cadillac in full camouflage testing in California back in September.
If this car looks familiar, it's because our spy shooters got a jump on GM by catching the car in action and providing pictures from all angles. There are still no official details for the ELR yet aside from the fact that it will share the Voltec system with the Chevrolet Volt, but we'll finally see the car unveiled in Detroit a week from today.

Cadillac ad boss is happy controversial Poolside TV ad created debate

Remember Cadillac's controversial commercial for it ELR plug-in hybrid? Did you find it provocative? If so, that's a good thing according to the brand's advertising director, Craig Bierley. First aired during NBC's coverage of the Olympic opening ceremony, the minute-long spot returned to the tele again this weekend, bookending the Academy Awards on ABC. Titled Poolside, the bit was meant as "brand provocation" and whether you enjoyed it or not – sentiment is said to run 3:1 on the pro side – we can probably all agree it fulfilled its role as such. If you were one of those who felt the ad erred on the side of nationalistic consumerism (or what have you), your anger might be somewhat assuaged after reading this article from Advertising Age in which Bierley addresses most of what he believes are misconceptions about the message. For one, the spot isn't aimed at the One Percent, just those who make $200,000 a year. Or, as Craig Bierley, Cadillac's advertising director, calls them, "people who haven't been given anything." Bierley told Advertising Age that the spot doesn't celebrate workaholicsm, instead, "We're not making a statement saying, 'We want people to work hard.' What we're saying is that hard work has its payoffs.'" While our commentors seemed mostly to enjoy discussing the value proposition that is (or is not, depending on your point of view) the Cadillac ELR, the majority appeared to enjoy the commercial. If you were one of those offended, however, let us know if your opinion has changed upon reading Cadillac's defense. If you don't remember what all the fuss was about, scroll below to take another dip in Poolside.