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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.

McLaren shoehorned the F1's V12 into a BMW M5 wagon test mule

Automakers are known to utilize preexisting vehicles as test beds for major research and development purposes. But some of the zombie mashups produced in-house can result in pretty interesting combinations. Case in point, when McLaren was developing its BMW-sourced naturally-aspirated 6.1-liter V12 for the legendary F1, the company put the engine in … a BMW M5 wagon? Yup, you read that correctly. ItÂ’s no mystery that the legendary F1 came with a BMW-sourced V12. That "M70" V12 originated from its placement in the E32 7 Series and E31 8 Series “50” models in the 1980s up through the 1990s. The version that went into the F1, however, is more closely related to the M-tuned "S70" V12 found in the E31 850CSI, which was the pseudo M-variant to the 8 Series that wasnÂ’t officially designated an M model. But it did feature full-fledged tuning from the M Division. On "Top Gear" presenter Chris HarrisÂ’ podcast, "Collecting Cars", Harris interviewed David Clark, the former director of McLarenÂ’s cars for both the road and motorsports between 1994 and 1998. Clark revealed that they took an E34 BMW M5 wagon and shoehorned the S70 V12 into its engine bay as the mule for testing the F1Â’s engine. Clark even said he drove the car himself as they were fine-tuning the V12Â’s engine output. YouÂ’re probably wondering, how the heck did that thing fit? But it isnÂ’t that surprising. The E34 5-Series was designed to house either the BMWÂ’s venerable straight-six or the new-at-the-time V8. And there was room enough to house the V12 as well, particularly since BMWÂ’s V12 was essentially two of its “M20” straight-sixes bolted together at the crank in a vee. When Clark was testing the S70 V12 in the wagon, he and his team ended up with the 627 horsepower and 479 pound-feet of torque the F1 became known for. ThatÂ’s nearly twice the power the production M5's 311 hp and 266 lb-ft at the time. Clark also divulged that the actual prototype mule still exists, but itÂ’s in BMWÂ’s secret collection of prototypes, and itÂ’s never been revealed to the public. He does, however, hope that one day, BMW will open its doors and show off the incredible mashup of an automobile. Until then, youÂ’ll have to rely on the few custom engine swaps done by owners to get a taste of what a V12-powered E34 M5 is like. Rumor also has it that McLaren could be working on a new direct F1 successor with help once again from Gordon Murray.

Auto execs surveyed say VW, BMW most likely to grow

A new survey of top global automotive executives indicates both Volkswagen and BMW are the most likely to grow their market share over the next five years.
Tax advisory firm KPMG LLP has released its 14th annual Global Automotive Executive Survey, which includes responses from over 200 executives. A total of 81 percent of respondents said they expect to see Volkswagen make gains, compared to 70 percent last year. BMW, meanwhile, saw 70 percent of those surveyed say they believe the company will increase its market share. That's a jump of 7 percentage points over last year. This is the first time in the history of the survey that BMW has claimed the second-place spot.
Meanwhile, Hyundai has seen its perceived market share potential slacken for the third year in a row. Around 61 percent of those surveyed predicted gains for Hyundai, down from 63 in 2012. Toyota also has a surprising year, but for just the opposite reason. While the manufacturer had slipped in ranking since 2011, it enjoyed the largest increase of any company in the 2013 survey, jumping to 68 percent from 44 percent last year.