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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.

Cigarette Racing unveils the AMG GT S-inspired 50-foot Marauder

The Cigarette Racing stand at the Miami Boat Show this morning hosted the latest in the eight-year collaboration between Mercedes-AMG and Cigarette Racing: the AMG GT S parked next to the fast-boat it inspired, the Cigarette Racing 50 Marauder GT S Concept. The vinyl ester resin and fiberglass go-fast boat is more than a matching Solarbeam yellow paint job with the coupe that inspired it. Like other carmakers who have partnered with companies outside the industry - such as Nissan's recent tie-up with NASA - there's an exchange of technology involved; Cigarette said that working with AMG on composites and bonding helped them drop 1,000 pounds off the Marauder GT S Concept compared to the standard Marauder twin-engine, which comes in at 14,200 pounds. Customers who order standard Marauders can request the weight reduction (for a price), but we were told that unless they plan to spend most of their time above 100 miles per hour, the extra weight contributes to a smoother ride. Mercedes head designer Gordon Wagener penned the exterior paint job and worked with Cigarette to design the cockpit trim, which would have seen him in familiar surroundings: Cigarette Racing owner Skip Braver is a long-time AMG customer, and the boat company based its bespoke department on the AMG Design Studio in Affalterbach. Every one of its boats is handbuilt in its factory in Opa-locka, Florida using some of the same processes seen in automaking, like bar codes to track the progress of hulls and components, computer controlled paint samples with digital files that can be sent around the world for matching, and doing all the stitching in-house to keep tabs on quality control. The engine compartment holds two, nine-liter, four-valve, DOHC, quad-cam, twin-turbocharged Mercury Racing engines with all-aluminum blocks, each one of them good for an electronically-limited 1,550 pound-feet of torque, and either 1,350 horsepower or 1,550 horsepower depending on whether you run regular 91-octane fuel or 116-octane race fuel. So yes, that's 3,100 hp and 3,100 lb-ft at once, if you go all out. Mercury says they're the most powerful powerful emissions-certified gas-powered marine engines you can buy. The engines don't have knock sensors, though, so you have to turn a key to register the kind of fuel you're putting in, and you can switch from one to the other when two 150-gallon tanks are down to 10-percent full.

Mercedes CLA a sub-$30k car no more

To be honest, the sub-$30,000 Mercedes-Benz CLA was more a theoretical than a real thing. Squeaking in at $100 below that magical threshold, not counting a $925 destination charge, snagging a CLA anywhere near $30k meant exercising extreme self-control with the options catalog. Perhaps with that thinking in mind, Mercedes is set to effectively scrap the entire idea, with Cars Direct claiming the price on a new CLA is set to increase by about five percent, to $31,500. Adding 4Matic all-wheel drive brings the starting price to $33,500. Even the hot CLA45 AMG is getting a price bump, from $47,450 to $48,500. Frankly, it's impossible to miss where Mercedes is coming from with this move, if it actually happens. The CLA has been one of 2014's unmitigated success stories, selling so well that Mercedes has struggled to keep up with demand. Considering that, a modest price hike is to be expected.