Are subscription services moving into the auto industry?
18 July 22
Imagine it’s an early winter morning. You are in a hurry to get to work, and as soon as you get into your car you reach for the heated seat button but nothing happens. Then you remember that you forgot to renew your “heated seats subscription”.
This might sound quite ridiculous but could be the future of the auto industry as there is already an example of this. BMW is offering the heated seats option to customers in a form of a subscription.
In the UK, this “service” costs £15 a month, and if you would like to get a heated steering wheel along with it will cost you an extra £10 a month. BMW does state that all the hardware features can still be enabled the old school way by paying for it in full.
The company does not plan to stop and will likely expand their subscription hardware offering in the future. After quite a bit of backlash, the company did state that this could be helpful for users to try out certain features without committing to buying.
BMW also notes that it could prove to be useful for the second-hand buyers who would like to add certain features to the car that the original owner did not tick as options.
The critics of this new payment structure from BMW state that it seems to be disingenuous since when you buy a car you own it and everything that comes with it.
It also begs the question, if the hardware is already installed in the car and you are just paying to remove the block within the software, what stops the customer from doing it themselves, as in theory they are the owner of the vehicle and can do with it as they see fit.
Either way, it seems that subscription services are the future of most retail industries. In this case, it might be a good way for automobile manufacturers to increase profit margins as there would be less diversity between different cars ordered, which would cut manufacturing costs. It would also ramp up cash flow for the company as the car would keep on producing revenue for the company as the years go on.