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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.

Automakers tussle over owners of 'orphan' makes

When General Motors put down several of its brands in recent years, it also let loose thousands of brand-loyal customers who will eventually need another car.
R.L. Polk Associates estimates there are more than 18 million cars from 16 discontinued makes on the road today. Those "orphan owners" have sales-hungry competitors seeing dollar signs. GM is offering Saturn owners $1,000 cash toward a Chevy Cruze, Cadillac CTS or a GMC Acadia. Ford is giving its Mercury lease customers a chance to get out of their contracts with no early-termination penalty and offering to waive six remaining payments if they drive off in a Ford or Lincoln.
Edmunds.com research shows the efforts are paying off somewhat for GM, with 39 percent of Pontiac owners, 37 percent of Hummer owners and 31 percent of Saturn owners taking delivery of another GM-branded vehicle. But that leaves as much as 69 percent of owners going elsewhere. Ford, Honda and Toyota seem to be attracting many former GM owners.

Lincoln Continental brings back suicide doors with Coach Door Edition

Remember that teaser image from last week indicating the Lincoln Continental would get suicide doors? Well, it's happening, and we got to check out a prototype late last week. As you can see from the photos, the vehicle is essentially a stretched Continental with rear doors that latch forward. Lincoln doesn't call it the suicide door edition, of course. No, the proper name is 80th Anniversary Coach Door Edition. Semantics aside, the car is here to pay homage to the suicide doors of the 1960s Continental and celebrate 80 years since the original Continental was introduced. That's the why; now here is the how. To build this special edition, a Continental begins life as a normal Black Label model, and leaves the factory with normal doors intact. From there, Lincoln ships the car to Cabot Coach Builders in Massachusetts for the stretch and other modifications we'll get into later. Before you start cursing Lincoln for not really screwing together a suicide door Continental, know this: Lincoln engineered all the components, metalwork and everything else that goes with the build. It then gives the car and components to Cabot for the fabrication work. So yes, somebody else is doing the conversion, but you're still getting a Lincoln-engineered vehicle. Make of that what you will. Cabot has done work for Ford before with the MKT and Transit Van, but Lincoln says it's much more involved in this build than it ever was before. To begin, the Continental gets a six-inch stretch. It was a relatively long car before, but boy does this thing look like it's lounging now. That's exactly what you'll be doing once inside those suicide doors. Lincoln claims best-in-class legroom, and yes, to our eye that is surely accurate. Someone well over 6 feet tall could easily stretch all the way out and still have room to spare back there. The only problem we noticed? Headroom. A sloping roofline combined with seats that are well pushed back doesn't leave a whole lot of space up there. It looks like Lincoln noticed this and carved out little spaces in the headliner, but it might not be enough for those who are closer to the sky than most. A flow-through center console occupies space where the middle seat would typically be. This has all sorts of controls for things like audio and climate control. Lincoln said the one we sat in wasn't entirely finished with all the features and electronics that will be included.