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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.

GM says over 40% of new China launches in next five years will be EVs

SHANGHAI — General Motors is planning an electric car offensive in China with more than 40% of its new launches in the country over the next five years set to be electric vehicles (EVs), the U.S. carmaker said on Wednesday. GM's electric vehicles, many of which will be all-electric battery cars, will be manufactured in China with almost all parts coming from local suppliers, the company said in a statement released at its Tech Day event in Shanghai. Reuters reported earlier on Wednesday that GM was planning to overhaul its Chinese line-up to stem a slide of sales after more than two decades of growth in a country that contributes nearly a fifth of its profit. GM's new China boss Julian Blissett told Reuters that new technologies, such as EVs and cars with near hands-free driving for highways, would play a key role in GM's China initiatives, which are part of a push to get annual sales in the country back to the 4 million peak it hit in 2017. GM did not say in its statement how many new or significantly redesigned models it was planning to launch in China over the next five years. "China will play a crucial role in making our vision a reality," GM CEO Mary Barra said in the statement, referring to its initiative to create what it describes as a future of "zero crashes, zero emissions and zero congestion" through electrification and smart-driving technologies. GM has said it plans to invest more than $20 billion in electric and automated vehicles globally by 2025. It was not clear how much of that investment will be spent in China. (Reporting by Norihiko Shirouzu in Shanghai; Editing by David Clarke) Related Video: Green Buick Cadillac Chevrolet GM Electric China

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.