2014 Cadillac Srx Performance Collection on 2040-cars

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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.

Question of the Day: Worst year of the Malaise Era?

The Malaise Era for cars in the United States spanned the 1973 through 1983 model years, and featured such abominations as a Corvette with just 205 horsepower (from the optional engine!) and MGBs with suspensions jacked way up to meet new headlight-height requirements. There were many low points throughout this gloomy period, of course. The horrifyingly low power and fuel-economy numbers for big V8s during the middle years of the Malaise Era make a strong case for 1974 or 1975— the years of Nixon's resignation and the Fall of Saigon, respectively— as the most Malaisey years. But then the GM-pummeling debacles of the Chevy Citation and Cadillac Cimarron could make an early-1980s year the low point. 1979, the year of the ignominious Chrysler bailout? You choose! Related Video:

Cadillac planning its own engines, halo cars

Cadillac is in the midst of some big changes. It's got a new chief executive. It's taking some distance from parent company General Motors and moving to a new headquarters in New York. And it's instituting a new naming scheme that will allow not only for a more clear progression in its lineup, but also for more models. But that's not the end of the story. Not by a long shot.
Speaking with Automobile magazine, Cadillac's new president Johan de Nysschen revealed his intention to develop several new models and powertrains. For starters, he does not want Cadillac to continue borrowing engines from the GM parts bin, but intends to develop a new range of engines specifically for the luxury automaker. The program will likely start with smaller-capacity engines but eventually lead to new V8s as well, taking the place of the long-serving Northstar engine that finally ended its lifespan a few years ago after some two decades of production. Along with other technologies, de Nysschen envisions possibly sharing these powertrains with other GM divisions, but developing them first and foremost for Cadillac.
The bigger question, however, is where those engines would go, and de Nysschen had some thoughts to share on that front as well. For starters, the former Infiniti and Audi exec sees room for an even bigger sedan above the upcoming new CT6 that will cap the current range. Maybe even two of them. But that's not all. Johan wants to see Cadillac get (back) into the sports car game with a new halo model or two - something it hasn't really done since the Corvette-based XLR roadster. A pair of new crossovers are also said to be in the works, flanking the SRX on both sides with smaller and larger models.