BMW Still Loves Vehicle Subscriptions

Despite taking a surplus of criticism for attempting to normalize subscription-based heated seats, BMW says it remains committed to vehicle subscriptions.

Based on recent actions, the brand's official stance on the matter could have been predicted. But it's always nice to have confirmation before making any sizable purchases.

According to The Drive, the German automaker remains convinced that the “features-as-a-service model” will be a core aspect of its current and future business. This mimics the global push toward goods or products-as-a-service we’ve seen over the last decade. It’s the direct result of companies (not just automakers) connecting their products to the internet and then using it as a way to gatekeep ownership.

The reasoning is obvious. Businesses believe the profit potential is astronomical. They see little reason to assemble a bunch of variants with different components that can only be sold once when a manufacturer can build a single type of car for less money and then sell features à la carte on a monthly basis.

Subscriptions also allow companies to upsell features that customers might have viewed as too costly in the past. Even if the monthly (or annual) payments end up being more over the lifetime for the vehicle, it’s often harder for the average buyer to rationalize spending an extra thousand dollars to climb the trim ladder.

“BMW remains fully committed to the ConnectedDrive environment as an essential part of the global BMW Aftersales strategy,” a BMW spokesperson explained to The Drive via email.

“With these established digital offerings, we offer our customers even more comfort and flexibility in line with their individual wishes after they purchase a vehicle,” the company continued. “This allows customers to opt for additional functions and services retroactively.”

Historically, aftersales has pertained mainly to automotive maintenance by way of the dealership. OEMs would make money by selling replacement parts and branded fluids while having service centers license their diagnostic equipment. Aftersales have always been an important revenue driver for both manufacturers and dealerships.

But the term is getting increasingly broad. Modern trends have led the industry to entertain subscription models for all sorts of features. Initially, this only pertained to connected features that could be downloaded. These days, subscriptions could include activating hardware that’s already been equipped to the vehicle. It’s something customers have repeatedly pushed against, requiring automakers to walk things back before they can try again.

This is exactly what has happened with BMW. The automaker took loads of criticism after attempting to link heated seats to subscriptions and quickly abandoned the concept following the public outrage. However, it remains committed to leveraging subscriptions wherever possible and it’s hardly alone.

Plenty of manufacturers have already tied driver assistance packages or entertainment features to subscriptions. But the needle has continued to move. These days, it's relatively common to see automakers selling features like remote start via subscription and requiring users to pair their vehicle with their phone. One could even argue that leasing borders on a vehicle subscription.

I’ll not beat a dead horse. We’ve covered the encroachment of subscription services for years and the trend has continued, despite few drivers signaling their approval. The question is how much further do automakers think they can go with the concept. With most brands following the same trends, there is little recourse for modern car buyers without abandoning the relevant features, snubbing the worst-offending automotive brands, or bucking dealerships to see what the aftermarket can do for them.

BMW and a plethora of other brands may indeed be committed to the subscription model. But that doesn’t mean shoppers have to stay committed to them.

[Images: BMW]

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