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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.

2016 German Grand Prix race recap: so-so racing, great questions

We can summarize the 2016 German Grand Prix in one sentence: Mercedes-AMG Petronas driver Lewis Hamilton started second on the grid, passed pole-sitter and teammate Nico Rosberg before the first corner, and dominate to the finish. In fact, Hamilton turned his engine power output down on Lap 3 and still took the checkered flag seven seconds ahead of Red Bull driver Daniel Ricciardo. Ricciardo's teammate Max Verstappen crossed the line another six seconds back. Rosberg fell to fourth at the first corner and couldn't find the pace to reel in the Red Bulls. His questionable pass on Verstappen didn't help when the stewards penalized Rosberg five seconds; the overtake reminded us of Rosberg's move on teammate Hamilton in Austria. That penalty turned into eight seconds when the Mercedes-AMG Petronas stopwatch didn't work in the pits. Ferrari pilots Sebastian Vettel and Kimi Raikkonen finished fifth and sixth. Those six drivers all started in the top six, too. Behind them, on Lap 28 of the 67-lap race the next four drivers were Valtteri Bottas in the Williams, Nico Hulkenberg in the Force India, and Jenson Button and Fernando Alonso in McLarens. Low fuel and old tires put the kibosh on Alonso's pace just four laps from the finish, allowing Force India's Sergio Perez to pass, rounding out the top ten. The issues up for debate during the four-week break are far more interesting than the weekend's race. As bad as Ferrari's day might have been – and we'll get to that – Rosberg probably took the biggest hit, losing the race before the first corner for the second weekend in a row and falling 19 points behind Hamilton. Rosberg won the first four races of the season, then the teammates tripped over one another in Spain. Hamilton's won six of the seven races since Spain, Rosberg's best result in that time is a second-place in Hungary. Hamilton turned his engine down on Lap 3 (!) because he's used his entire season's allotment of five turbochargers and five MGU-Ks. Those early-season gremlins now have him on edge of grid penalties. Unless Hamilton's momentum cools off in August, however, that reliability danger might be the only dent in his armor. Rosberg, who once led the Championship by 43 points, will surely drown in his thoughts – and maybe schnapps – over the summer break. Whatever the Italian word for "meditation" is, there'll be a lot of it at Ferrari during the F1 summer break.

Race recap: 2016 Belgian Grand Prix is a dozen angry laps

The calm of the Formula One summer break ended with the tumult of the Belgian Grand Prix. The first two days included unusual tire pressures and grid penalties; Mercedes-AMG Petronas' Lewis Hamilton started 21st because of a 55-place grid penalty for engine and gearbox changes, McLaren's Fernando Alonso started 22nd due to a 60-place penalty for the same offenses. The bedlam rolled right into what was effectively an 11-or 12-lap race. Mercedes driver Nico Rosberg took off from pole and the cameras barely bothered with him until he took the checkered flag 44 laps later. Red Bull's Max Verstappen bogged from second on the grid, got swallowed by Ferrari's Sebastian Vettel and Kimi Raikkonen on the way to Turn 1, then attempted to recover by sticking his Red Bull's nose between Raikkonen's sidepod and the apex at the first corner. Vettel, who didn't see Verstappen, turned into La Source leaving only enough room for Raikkonen. Three cars don't fit in a space for two cars. Vettel spun, Raikkonen and Verstappen clobbered one another and all three drivers had to pit for repairs. Force India's Nico Hulkenberg zig-zagged his way into second ahead of Red Bull's Daniel Ricciardo, Williams' Valtteri Bottas, and Sergio Perez in the second Force India. On Lap 6 Kevin Magnussen lost his Renault at Raidillon at the top of Eau Rouge and flew backward into an enormous crash. Magnussen escaped with just a cut ankle. The Safety Car paraded the field for four laps before officials red flagged the race to repair the barriers. When racing resumed on Lap 10, Rosberg led Ricciardo, Hulkenberg, Alonso, and Hamilton. Ricciardo stayed ahead of Hamilton to keep second place at the end of the race, Hamilton easily got around Alonso and Hulkenberg to lock up third. Hulkenberg – who'd given up second to Ricciardo by pitting during the Safety Car period – earned another career-best fourth position ahead of teammate Perez in fifth, followed by Vettel and Alonso on recovery drives, Bottas, Raikkonen, and Felipe Massa taking 10th in the second Williams. Rosberg reignited his Driver's Championship charge with the victory, closing to nine points of leader Hamilton. We could argue that Hamilton had an equally good day by driving from 21st to third, limiting his loss to only 10 points. About that Verstappen, though... We've seen far more experienced drivers attempt the same move Verstappen made into Turn 1 – Raikkonen on Bottas in Russia in 2015, for instance.