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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.

Mercedes-Benz C-Class 'bleeding seat' problem resurfaces [UPDATE]

UPDATE: We received the following statement from Mercedes-Benz: "In rare instances, we incorrectly ordered some of the replacement parts for the seating surfaces. The approved replacement parts will not demonstrate the previous symptoms." It appears Mercedes-Benz has another problem with "bleeding seats" in 2015 C-Class sedans. As we reported in January, an oily residue has been appearing on some versions of the C-Class with man-made MB Tex upholstery, making it look as though the seats were grimy or "bleeding." Mercedes issued a technical service bulletin to its dealers to remedy the problem, but now we're hearing the fix isn't complete. Small parts of the seats – the rear bolsters and a piece below the center armrest – weren't replaced during service and then developed the oily reside again, a source tells us. This occurred within a few days of their service appointment. The dealer followed Mercedes' instructions, our source said, and their C-Class appears to have been one of the first cars fixed. "I'm absolutely flabbergasted at this point ... The new C-Class is such a good car. This is just a shame," they told Autoblog. The bleeding seat issue appears to affect US-built C-Class models with the MB Tex vinyl and possibly other interiors. The bleeding often occurs when a car has been sitting in the cold and then heats up quickly. The number of cars affected is unclear, though the C-Class owners have been vocal in the MBWorld.org forum. At the time of our original report, Daimler AG, parent of Mercedes-Benz USA, said it was aware of the issue and that no injuries had been reported. The residue usually washes off with soap and water. The National Highway Traffic Safety Administration had no recalls, complaints or investigations recorded about the issue as of Wednesday. The fix at the dealer involves changing out the headrest and seat covers, except for a part of the passenger seat that needs to be calibrated by the factory, according to the bulletin. The C-Class is a critical car for Mercedes as it battles BMW, Lexus and others for supremacy in the ultra-competitive luxury segment. The C-Class, which launched last fall, is moving upmarket as Mercedes reshuffles its lineup with the addition of the CLA sedan. The C-Class was the company's best-selling model in January with volume of 6,236 units.

Pre-Race notes from the 2015 Nurburgring 24-Hours

Autoblog has come to the German countryside to watch the Nurburgring 24-Hour race, and just one day in, we have to say it's outstanding. Le Mans has been the highlight of our summer racing schedule for the past few years, the 'Ring 24-Hour event being the appetizer we always skipped. Earlier this year, however, while visiting Miami to check out the Cigarette Racing 50 Marauder GT S, we met Scott Preacher. He oversees digital marketing for both Cigarette and AMG during the week, then comes to Germany to compete in the VLN race series on the weekends, driving an Aston Martin Vantage GT4 for Team Mathol. If Le Mans is the Oscars of endurance racing, the Nurburgring 24-Hour race is the Screen Actors Guild award – the one voted on by the actors, for the actors. In this case it's the race by the teams and fans, for the teams and fans, even though the increasing manufacturer presence has altered the team equation. We were told that it wasn't so long ago that true privateers could win the overall, but that's not really the case anymore. Front-running teams have heavy factory involvement – Audi Sport Team Phoenix, for instance, which finished in first and third last year, has its own 'Ring race center and is running the 2016 R8; Aston Martin is represented by Aston Martin Racing and Aston Martin Test Center, and Bentley has a Bentley Motors team and uses HPT to run another team. The fan component hasn't changed, though, and you can't talk about the race for more than 60 seconds before someone brings up the battalions of spectators. Every driver we spoke to cited them as the most incredible part of this race after the track itself. It feels to us like a giant German Sebring, with thousands of people camped out in the ginormous, forested infield, many of whom have been here since Monday erecting their ornate camping compounds. There will be parties everywhere Saturday night, and so much bratwurst on the grill that the drivers can smell it when as they're blasting full speed through Wehrseifen. Even when we drove a Mercedes S63 AMG Coupe on a lap before the race, the fans waved like it was a competition. Scott Preacher's Australian co-driver Robert Thompson said, "You come around a corner and it's like you're driving full speed through the middle of a carnival." The race field itself could also be called a carnival, with an officially invited field of more than 170 cars. Even on a track that's 24.4-km long, that's like racing on the 405 at midday.