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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.

Porsche wants a better 'connected car' [UPDATE]

UPDATE: In an earlier version of this story we mistakenly identified Joe Lawrence as the CEO of Porsche Cars North America; Lawrence is in fact the Chief Operating Officer, COO, of PCNA. The text has been changed to reflect this. Porsche is known for great engineering, but it's usually the type that leads to fantastic engines and sublime handling, rather than cutting-edge infotainment systems. The company wants to alter that balance in the future to put a greater emphasis on connectivity in its models. Porsche Cars North America COO Joe Lawrence outlined the brand's goals during a speech at the Bloomberg Innovation Forum in Atlanta, according to Automotive News. "Recognizing the phone is so ubiquitous in every sector, how do we integrate that into driving experience in a way that is safe and enjoyable?" he said. Lawrence suggested the company might be working with Google and Apple on future solutions. Even if Porsche is working on making more tech savvy models, don't expect the company to forget its roots. Brand boss Matthias Muller also broached connectivity during his recent speech at a conference and said the sports car business' customers didn't want "a smartphone on four wheels." He promised investments in research and development to come up with an answer. In the same speech, Muller strongly suggested fully electric Porsche models were on the way and also announced a seventh model line coming in the future. Lawrence reiterated the company's future, as well, in his address. "We will see further electrification of our product line," he said, according to Automotive News. Rumors of Porsche building a Tesla-fighter have been circulating as of late. The vehicle is possibly in the body of the smaller Panamera called the Pajun, and it could offer a 300-mile range with an electric motor at each axle kicking out a reported total of 600 horsepower. Related Video:

The exotic '80s: Ferrari, Lamborghini, Lotus and the Porsche 959

There's no secret that we are big fans of the MotorWeek Retro Review series around here. In an automotive world that often focuses on the latest tech and what's coming in the future, it's refreshing to take a look into the past to get a new perspective. That said, the show is really outdoing itself this time by posting a full episode from the '80s to YouTube, complete with the original, jazzy opening. The video is an absolute standout, too, with drives of some of the best supercars that Europe could offer at the time. Among the now classic sportscars that MotorWeek got to drive are the Ferrari 328, Lotus Esprit Turbo, Lamborghini Jalpa and Autokraft AC Mark IV. There's even a preview that sings the praises of the tech in the Porsche 959. The episode is basically a showcase of most of the exotics from young enthusiasts' walls and school folders during the '80s and is not to be missed. News Source: MotorWeek via YouTube Ferrari Lamborghini Lotus Porsche Performance Classics Videos lotus esprit ac