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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.

Aston Martin and Mercedes-AMG formalize technical partnership

The development of a partnership between Mercedes-Benz and Aston Martin has been a long time coming. The news dates back to 2008, and over the five years since was supposed to lead to a rejuvenation of both the Maybach and Lagonda brands. That program ultimately fell apart, but the tie-in was forged afresh in July when the two automakers signed a letter of intent over a renewed partnership. And now that partnership has been formalized.
In a deal just announced, Mercedes-AMG will build a new V8 engine for Aston Martin that will power a new generation of luxury GTs for the British marque, presumably to replace the 4.7-liter V8 in the Vantage. The relationship appears to be similar to the one already in place between AMG and Pagani, only in this case, will involve Daimler taking as much as a five-percent stake in Aston Martin and an observer seat on Aston's board.
The technical partnership is also set to lead to the supply of electric and electronic systems, and could incorporate "additional areas of cooperation in the future." Whether that will include a fresh attempt at reviving Lagonda remains to be seen, as does the future of Aston's long-serving, Ford-based 6.0-liter V12 engine. But for now you can read the full announcement below.

BMW reclaims US luxury sales crown from Mercedes

The numbers, they are in: BMW has reclaimed the luxury-sales crown from Mercedes by a margin of 9,347 cars. Mercedes donned the king's headgear in 2013 after a strong final quarter of 2013 when the new CLA and S-Class poured out of dealerships. This year, led by the 3 Series/4 Series and X5, BMW sold 339,738 units – a 9.8-percent increase year-on-year. Mercedes, led by the C-Class and M-Class, saw its sales go up by 5.7 percent to 330,391 units. We'll have to wait a bit to see if there's another registrations-vs-sales challenge as in 2012, when BMW was anointed US luxury ruler. Behind them, a dark horse named Lexus nudged closer to the leading Teutons, selling 311,389 cars. The Japanese luxury automaker also had the biggest gain among the top three, its sales rising by 13.7 percent compared to 2013. Audi had the biggest sales of anyone among the top five, though, with a 15.2-percent gain to 182,011, which moved it a spot ahead of Cadillac; the Wreath-and-Crest brand dropped 6.5 percent to 170,750. Acura (167,843), Infiniti (117,300), and Lincoln (94,474) took the final positions. Speaking of Lincoln, sales at the once-mighty luxury marque stand as the mightiest jump of any on this list, up 15.6 percent. That's the power of Matthew McConaughey... and better cars and a new crossover, sure. So now that we're back to Round One of 2015, in case no one else has said it yet: "Ok, fight!"