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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 CT6 uses aluminum to save 200 pounds

In Cadillac's recently launched ad campaign, the luxury brand's tagline is "Dare Greatly," and the two words suggest a brand willing to take big swings, even if they don't always connect. From what the company is promising, the forthcoming CT6 seems like an embodiment of that new motto. With an eventual range of turbocharged engines, reportedly including a turbo V8, a possible plug-in hybrid and streaming rearview mirror, the sedan is certainly pitched as tech showcase. Of course, extensive use of aluminum is practically mandatory to play in the luxury field these days, and Caddy is proving its latest creation can do that too. Despite the weighty appearance of the sedan's squared-off exterior, 64 percent of the CT6 is aluminum, including the entire exterior. Caddy claims that using so much of the lightweight metal sheds 198 pounds off the scales compared to using conventional steel. There still is some steel in the CT6; although it's predominately the high-strength variety. The engineers use the heavier metal for portions around the cabin and B-pillar for added safety. Cadillac also claims using steel "close-out panels" on lower portions of the sedan make the cabin quieter without needing as much sound deadening. The buildup to the CT6's public unveiling has been a long time coming after Cadillac pinned the flagship (for now) sedan's debut at the New York Auto Show nearly a year ago. When the sheet finally comes off on March 31, we get the first good idea about just how great Caddy's latest act of daring really is. Cadillac CT6 Elevates the Science of Mass Efficiency 2015-03-13 Technology DETROIT – Cadillac will use an advanced mixed-material approach for the lightweight body structure of the upcoming CT6 range-topping sedan. The structure is aluminum intensive, but the new Cadillac also includes 13 different materials customized for each area of the car to simultaneously advance driving dynamics, fuel economy and cabin quietness. The CT6 will debut March 31 at the New York International Auto Show and go into production late this year at General Motors' Detroit-Hamtramck assembly plant. "This is the rocket science of automobile construction and manufacturing today," said Cadillac President Johan de Nysschen.

Weekly Recap: New bosses try to jump-start Cadillac and Lincoln

Both of America's domestic luxury brands seem to be stuck in neutral.
It's ironic that Cadillac and Lincoln got new bosses within days of each other this month. It's also a commentary on the fact both of America's domestic luxury brands seem to be stuck in neutral.