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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.

2020 Cadillac CT5 debuts at N.Y. Auto Show as a proper sport sedan

The 2019 Cadillac CT5 is here, and it's not a tweener sedan. After having done battle with the luxury sedan world through cars that were either too large or too small, Cadillac is using the CT5 to take direct aim at the BMW 3 Series, Audi A4, Alfa Romeo Giulia and Mercedes C-Class. Specifically, the CT5 replaces the CTS, but takes on vehicles one class smaller than what the CTS did. So, let's take a look at what Cadillac is bringing to the table. To begin, GM knows it has a winner on its hands with the Alpha platform used on the CTS and ATS and the Camaro, so engineers adapted it to the CT5. This seems like a great start, because we all happen to love the driving dynamics from vehicles on this chassis. The wheelbase is a couple inches longer than the CTS, but the CT5 is a couple inches shorter in overall length. As a result, the wheels get pushed toward the corners of the car, leaving the CT5 with relatively short overhangs in the front and rear. It looks different than both of the to-be-discontinued Cadillac sedans, but we wouldn't call it revolutionary. The rear end isn't quite a "sportback," but it's a "faster" shape, eschewing a traditional sedan's long decklid for a sloping-roof look instead. This shape does come at the expense of rear seat headroom, but we'll dive into the interior later. We got a little preview of the powertrain setup before this official reveal, but details were scarce. The base engine is the recently new 2.0-liter turbo four-cylinder found in the Cadillac XT4. Just as it did in that vehicle, this engine makes 237 horsepower and 258 pound-feet of torque. While it might be down on power compared to the old 2.0-liter in the ATS (272 horsepower and 295 pound-feet) we found it to be incredibly smooth, refined and not lacking in thrust compared to the old unit. We're sure the four-pot will offer sufficient power for the CT5, but the 3.0-liter twin-turbo V6 is lying in wait. This engine makes 335 horsepower and 400 pound-feet of torque. Both engines are paired to a 10-speed automatic transmission and can be had in rear-wheel drive or all-wheel drive in every configuration. So yes, you can get the V6 with rear-wheel drive, thankfully. Cylinder deactivation is also equipped to both these power units — the four-banger is able to run on two cylinders, while the V6 drops to four. Cadillac was entirely transparent about its new pumped-in engine sound strategy, too.

Why Cadillac thinks it needs to succeed in Europe to sell cars elsewhere

Ward's Auto has taken an interesting look at the renewed focus General Motors is showing towards Cadillac in Europe. Susan Docherty, president and managing director of Chevrolet and Cadillac in Europe (pictured), says in order for the luxury brand to thrive in China, it first needs to succeed in the old country. The reason? Chinese buyers look to Europe for cues as to what's deemed worthy of the term "luxury." There are hurdles to the plan, however. In addition to the fact that the EU is flooded with high-end nameplates, GM doesn't necessarily have the distribution network in place to put buyers behind the wheel.
Combine that with persistent economic woes and Cadillac's checkered past marred by a lack of diesel engine options and a bankrupt distributor, and the road ahead for the brand looks like less of an uphill climb and more like a straight-up cliff face. But Docherty is optimistic and says she has a plan for the brand. We recommend heading over to Ward's for a closer look at the full read.