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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.

eGarage video features Helmuth Bott's personal Porsche 959 prototype

"We thought we were going to build a super-911," said Peter Schutz, former CEO of Porsche AG of the development of the Porsche 959. That was before it started getting expensive. At that point, Helmuth Bott, Porsche R&D director got frightened. Costs ballooned because of the all-wheel drive, sequential turbocharging and other technology Porsche had never even thought about when it set out to build a 911 to compete in Group B. Schutz continued, "The amount of resources we were committing got totally out of hand." Instead of pulling the plug, Bott doubled down and drew on the strength of his brilliant team to build a car whose impact is still echoing aross the industry.
"It's probably one of our most prized possessions" says Don Leatherwood, Director of the Brumos collection where Dr. Bott's personal prototype resides, and where Frazer Spowart went to see the car and create a video for eGarage. Check out the sights and sounds of the 959 before it was the 959, and get personal takes on the car from Hurley Haywood, Peter Schutz and Don Leatherwood. Keep reading to see the video.

All Porsche 911s to get turbos in 2015?

Currently, Porsche builds two turbocharged 911s - the Turbo and the Turbo S (and their cabriolet counterparts). The rest of the 911 range, meanwhile, is motivated by either 3.4- or 3.8-liter flat-sixes of varying outputs. This clear separation could be set to change in the very near future, though, as rumors continue to swirl that Porsche's rear-engined range could switch exclusively to turbocharged power.
This time, it's Car projecting that the 911 range will go turbocharged as part of a mid-cycle refresh, with the base Carrera's 3.4-liter dropping to 2.9 liters and adding an iron lung, bumping the entry level 911 up to 400 horsepower. Yes, a 400-horsepower, entry level 911. The Carrera S, meanwhile, will retain its 3.8-liter engine, but will also benefit from turbocharging, increasing output to 530 horsepower and 520 pound-feet of torque. So basically, it sounds like the current, 520-hp 911 Turbo will become the next Carrera S.
What does that mean for Porsche's traditional high-performance models? Well, it's a safe bet that the Turbo, Turbo S and eventual GT2 will be producing seriously huge power figures. Based on pure speculation, we wouldn't be shocked to see a 600-hp Turbo, with the S and GT2 increasing output markedly from there.