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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, Hyundai score big in JD Power's first Tech Experience Index

While automakers are quick to brag about winning a JD Power Initial Quality Study award, the reality, as we've pointed out before, is that these ratings are somewhat misleading, since IQS doesn't necessarily distinguish genuine quality issues. JD Power's new Tech Experience Index aims to solve that problem. The new metric takes the same 90-day approach as IQS but focuses exclusively on technology – collision protection, comfort and convenience, driving assistance, entertainment and connectivity, navigation, and smartphone mirroring. It splits the industry up into just seven segments, based loosely on size, which is why the Chevrolet Camaro is in the same division (mid-size) as Kia Sorento and the Mercedes-Benz GLE-Class is in the same segment as the Hyundai Genesis (mid-size premium). It makes for some screwy bedfellows, to be sure. Still, splitting tech experience away from initial quality should allow customers to make more informed and intelligent decisions when buying new vehicles. In the inaugural study, respondents listed BMW and Hyundai as the big winners, with two segment awards – the 2 Series for small premium and the 4 Series for compact premium, and the Genesis for mid-size premium and Tucson for small segment. The Chevrolet Camaro (midsize), Kia Forte (compact), and Nissan Maxima (large) scored individual wins. Ford also had a surprising hit with the Lincoln MKC, which ranked third in the compact premium segment behind the 4 Series and Lexus IS. This is a coup for the Blue Oval, whose woeful MyFord Touch systems made the brand a victim of the IQS' flaws in the early 2010s. But Ford and other automakers might not want to celebrate just yet. According to JD Power, there's still a lot of room for improvement – navigation systems were the lowest-rated piece of tech in the study. Instead, customers repeatedly saluted collision-avoidance and safety systems, giving the category the best marks of the study and listing blind-spot monitoring and backup cameras as two must-have features – 96 percent of respondents said they wanted those two systems in their next vehicle. But this isn't really a surprise. Implementation of safety systems from brand to brand is similar, and they don't require any input from users, unlike navigation and infotainment systems which are frustratingly deep.

Hyundai, Kia, Genesis and Subaru clean up in IIHS 2018 safety ratings

Hyundai, its partner Kia and its Genesis division are the big winners in the latest vehicle safety ratings from the Insurance Institute for Highway Safety, accounting for six of the 15 models that earned the Top Safety Pick+ awards for 2018. Subaru was right behind with four, Mercedes-Benz had two, and Toyota, BMW and Ford each had one. Another 47 vehicles earned the Top Safety Pick designation, where Toyota had 10 vehicle models, with Hyundai recognized for nine models. All but one of the seven vehicles in Subaru's lineup, the BRZ, qualified for one of the awards. IIHS strengthened the criteria for the Top Safety Pick+ award for 2018 to require headlights to earn a "good" rating — an "acceptable" rating was previously enough to notch the "plus" award — and good or acceptable passenger-side protection in the small overlap front crash, which replicates a crash involving just the front corner of a vehicle. It also required vehicles to have acceptable or good headlights for the first time to earn a Top Safety Pick award. Most of winners for both awards qualified on the basis of optional upgrades. IIHS in October began evaluating the passenger side of vehicles in its small overlap front crash test after it said it became clear that automakers were neglecting that side of the vehicle as they focused on improving driver-side protections. IIHS first began conducting driver-side small overlap crashes in 2012. It began measuring both how well low and high beams illuminated the road and the amount of glare they produce for oncoming vehicles as part of its ratings in 2016. The Top Safety Pick+ winners are listed below. The list doesn't include any minivans, pickups or minicars, which don't appear on either list of awardees. Small cars Kia Forte Kia Soul Subaru Impreza (sedan and wagon) Subaru WRX Midsize cars Subaru Legacy Subaru Outback Toyota Camry Large luxury cars BMW 5 series Genesis G80 Genesis G90 Lincoln Continental Mercedes-Benz E-Class sedan Midsize SUVs Hyundai Santa Fe Hyundai Santa Fe Sport Midsize luxury SUV Mercedes-Benz GLC The full list of Top Safety Pick winners is available here.Related Video: Image Credit: IIHS BMW Genesis Hyundai Kia Lincoln Subaru Toyota Safety Crossover SUV Wagon Sedan crash test