BMW And Mercedes Will Test Subscription Services In The US

Industry News

This may be the ideal way to own a BMW or Mercedes in the future.

Subscription services are taking over the consumer market in a big way. Services like Netflix and Hulu are replacing traditional cable providers, and even companies like Google and Disney are trying to get in on the action. Not to be outdone by the entertainment industry, the car industry is also trying its hand at offering subscription services. Volvo will already let people subscribe to an XC40 for $600 a month and Porsche will let people switch from several different cars for $2,000 to $3,000 per month.

These prices may sound a bit expensive, but these subscription services do include all maintenance and insurance costs. Cadillac was the first to market with its subscription service called "Book By Cadillac" and now Automotive News reports that BMW and Mercedes want to give it a shot as well. Like Cadillac's service, BMW and Mercedes subscription models will just be a pilot, so they won't be available everywhere. Mercedes-Benz global sales chief Britta Seeger said "We need to learn. In different markets, we want to try this out." We would expect Mercedes to choose large markets such as New York or Los Angeles.

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BMW of North America CEO Bernhard Kuhnt said "We are in the phase of looking at it and evaluating together with BMW Financial Services and if we are going to do it, we are going to pilot it first to learn more about it." Steeger did point out what he calls a "big threat" to subscription models. "On the weekend, if it's sunshine outside and if everybody wants to have a cabriolet, and if I apply five times to have a cabriolet and I don't get it, what does this cause?" Seeger said. These are details that will have to get worked out if the subscription model is going to succeed.

We really like the idea of paying a monthly fee to be able to switch out cars within the BMW or Mercedes range. Although, changing cars isn't easy for a lot of people, and we could imagine most drivers will want to stick with one car. Subscription services for cars may only attract a certain type of customer, but we'd like to see if the idea could eventually be worked out.

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