Friday, September 30, 2022

Subscription-based Access Coming to Mass-market Vehicles – Mo’ Money for Auto-makers | VIDEO

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*Automakers are rolling out subscription-based access to vehicle features to make more money off of customers. 

Per The Verge, “Subscription-based access to vehicle features, like heated seats or remote-start key fobs, are the latest attempt to charge people for things their car already came with. The question is whether customers are going to lay down and take it.”

BMW was unsuccessful in its previous attempt to get customers to pay $80 a month for access to Apple CarPlay, and Andriod Aut — which are free apps in other companies’ vehicles. The German automaker is said to be giving it another go, as BMW is reportedly selling $18-a-month subscriptions for heated seats.

Per The Verge report, “Volkswagen, Toyota, Audi, Cadillac, Porsche, and Tesla have all dabbled in subscription models for certain options, such as driver-assist features or voice recognition”.”

OTHER NEWS: Sales of Electric Cars on the Rise in U.S.

As noted by Jalopnik, “No one wants the subscription model, but car companies are trying it anyway.”

Here’s more from The Verge:

Earlier this year, Cox Automotive conducted a survey of 217 people who intend to buy a new car over the next two years. Only 25 percent said they’d be willing to pay a monthly or annual fee to unlock a feature in their vehicle. The remaining 75 percent said piss off.

Of those 25 percent that don’t mind subscription, the features they’d be willing to pay an annual or monthly fee generally fell into three buckets: safety features like lane-keep assist or automatic emergency braking (although automakers have agreed to make the latter standard in new vehicles starting this year); vehicle performance features, like extra torque or horsepower; and creature comforts, like heated or cooling seats or steering wheels.

“For automakers to achieve their revenue aspirations by charging consumers extra for features and services, they have work to do,” Cox’s Michelle Krebs said.

According to the report, a majority of the subscription plans are coming from luxury automakers. “But industry analysts have said that subscriptions are coming to mass-market vehicles as mainstream automakers look for new revenue streams to help fund their enormously expensive plans to build vehicles that are electric, connected, and autonomous,” per the report. 

General Motors reportedly earned over $25 billion in subscription revenue last year. By the end of the decade, that number is expected to increase to $45 billion. 

“Automakers sure want customers to get used to this, but frankly, I’m skeptical this will fly,” said Sam Abuelsamid, principal analyst at Guidehouse Insights, an industry consulting firm.

“I think automakers will have to back down on either pricing or how many things they want to turn into subscriptions,” he said.

Ny MaGee
Ny MaGee is an entertainment reporter with over 15 years of experience working in the film industry in areas including production and post-production, marketing, distribution, and acquisitions. She has worked for legendary film producer Roger Corman, Quentin Tarantino's production team at Miramax, the late Larry Flynt, MTV/ VH1, Hallmark Channel, Paramount, Jim Henson Co., Parade Magazine, and various LA-based companies representing above-the-line talent.

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