2014 Cadillac Xts Premium on 2040-cars

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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.

GM threatens predatory dealers with order cancellations, non-transferrable warranties

General Motors will launch a second salvo against misbehaving dealerships next week with a new set of policies aimed at curbing predatory markup strategies. With the new Chevrolet Corvette Z06, GMC Hummer EV SUV and Cadillac Escalade-V about to head into production, GM is putting its foot down yet again. Dealers that attempt to circumvent GM's markup restrictions by dealing directly with brokers or other resellers could find themselves in a particularly nasty spot, as the company is threatening to withhold future allocations and end the transferability of warranties when dealers facilitate the reselling of vehicles within 12 months.  While this may help curb some dealership chicanery, it's possible the real loser in such a deal could end up being the customer who unwittingly ends up with an un-warrantied vehicle. We suspect GM has accounted for that, but we'll have to wait until next week to find out exactly how these new policies will be enforced.

Cadillac chief says ATS convertible, wagon on the table

What we do know is that the ATS will wear at least one more bodystyle. That comes from Cadillac head Bob Ferguson, who answered "Absolutely" when Automotive News asked him about the possibility of another variant. What we don't know is what that bodystyle or styles will be.
We now have a sedan and coupe ATS, there's supposedly a V sedan coming. After that, a convertible is a likely option given that the man who just became the global product honcho at General Motors, Mark Reuss, admitted to having one already designed in 2012. The decision on it can't get out of the underworld and a wagon is the other option, but the droptop would seem to make the most sense if one considers the competitive set: the BMW 4 Series and Audi A5 convertibles are hot property and Mercedes is bringing a C-Class convertible. Meanwhile wagons are the sentimental utility vehicles that, refusing to die, seem forever destined for life support... CTS Sport Wagon, anyone?
Based on Ferguson's statements, it appears that what Cadillac definitely won't do is play model variant catch-up with the European luxury brands it has spent years hunting down, telling Automotive News, "We want to keep our focus on a limited number of vehicles and do them very well."