Subscription fees for use of automobile features

Ohmess

Ohmess

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Interesting story here on BMW's attempt to turn automobile features into service fees. On the one hand, this is not entirely new - I remember calling Onstar using my free 90 day Onstar trial to unlock my Acura twenty years ago when my wife locked the keys in the trunk at the beach. Perhaps the anger here is that folks feel like heated seats should come with the car; whereas Onstar was not something we expected with any car we bought.

People who lament the fact that the parts are installed in the car don't understand the added expense that comes with installing parts in some cars and not others. This is also why the wiring for heated seats was always installed in the car, whether the seat elements were or not, so as to save on vehicle variability and parts proliferation. Installing heated seat elements in all your cars is merely an extension of this.

One issue with this is whoever is collecting the fees needs to have the ability to turn the feature off any time you don't pay your fees. This means constant contact with the vehicle, and the ability to alter vehicle function long after the car is purchased. And it will mean BMW and others will become even more protective of the software used to operate their vehicles. I tend to think this will work if they get the pricing right. I read somewhere that Tesla has been doing this with its rear seat heaters for a while now.

I would be interested to hear what folks here think about this.

nypost.com

BMW owners outraged over $18-a-month charge to use heated seats

Under subscription plans recently rolled out in the UK, Germany, South Korea and several other markets, BMW owners will have to pay the equivalent of $18 per month to turn on the heated front seats…
nypost.com nypost.com
 
Subscription of any kind is the golden goose for ANY business. Here is a way to more or less guarantee a steady stream of income for the foreseeable future. How awesome is that?

That is why so many software companies are now strictly on a subscription model. It makes financial forecasting so much easier for those companies accountants. And, conversely, that is why it is so easy to get in "Free 90 day trial, cancel anytime" and sooooo difficult to actually do that cancelling "Oh, let me transfer you to that department. If they don't answer, just leave a message.", " Oh, I can give you a discount on a toaster if you stay with us", "I'll tell you what, I'll give you a $0.99 discount on the next 3 months", etc... If I was a business owner, I would love any opportunity to get into that financial model.
 
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A friend forwarded a article about this yesterday. In a lease, I might find this ok. Though If one buys a certain spec only to have to pay to operate say the cruise control function, I would move to a different vehicle.

The article I read noted that should outstanding fees not be paid then the vehicle itself could be disabled. It went on to describe how speed monitoring and violations would be done through the vehicle itself, with the same disabling component to secure payment. Tesla has been tapping this revenue stream for sometime.

Since I can't get past the current design direction of BMW, its all moot to me.
 
BMW isn’t alone. A colleague has a Hyundai and there were features on his car that required annual subscription after the first year or so of ownership (remote start I believe).

My Audi Q7 requires subscription for traffic, and some other features. No thanks. I get them on my phone. In fact I had them remove rather than upgrade the cell service chip from the car when it was obsolete.
 
You would think that offering less franchise in your vehicle and increased ownership costs would be a disincentive to buy. There again, perhaps customers could use the same system for a credit on the free advertising a customer gives the car company through having their badge (logo) on their car :)
 
That car would prevent me from going to the dealership and any vehicle manufacturer charging hardware subscriptions would make me leave quickly. I certainly am not their target market and not sure who is.
 
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My comment on credits was tongue in cheek of course. But to me it seems to be the way it is going no matter what. Telematics is wonderful new technology, but it's appropriate application is something else.
 
Klassic said:
You would think that offering less franchise in your vehicle and increased ownership costs would be a disincentive to buy. There again, perhaps customers could use the same system for a credit on the free advertising a customer gives the car company through having their badge (logo) on their car :)
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Your comment on the logo reminds me of the time when BMW dealers were selling white t-shirts with a huge Roundel on the front.

They started at $10, and I bought four of them and wore them a lot. Great advertising, so a win win situation.

My son walked off with two of them, and the others began to wear, so whist getting parts I went to see if they had more. They had lots of them, but were asking $28 each. So now, you never see people wearing those things.

Same problem as supplying parts for our cars. Some MBA comes along and says "we need to make more money off of this", and then pricing is out of whack and revenue goes to zero.
 
What about that new electric car where you subscribe to battery usage. Drive more, pay more. No more regret about not buying the highest battery capacity.
 
There is a fundamental difference between charging a subscription fee for features on the car that rely on external services and ones that are wholly contained within the vehicle. Cellular data connections aren't free and are required for many of the items mentioned above. I'm perfectly okay having to pay extra for those features at some point because it gives me the option not to pay for them if I don't use them.

Paying a subscription fee for equipment that is already installed in the car and self-contained on the other hand is ridiculous. One thing that isn't clear to me is whether heated seats still show up on the options list, or if they're just included in all cars already and the subscription basically unlocks them. Still ridiculous as the consumer already paid for them when they bought the car whether it was called out as a separate line item or not.

I can see the special collaborative BMW/Ryan Air editions coming down the road soon: "You want to use the ABS? Please hold your credit card over the contactless payment sensor until you hear a beep." "Air bags? Please indicate how many you would like to activate for this driving session."
 
Stan said:
Next, turbocharger use subscription.
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The IC equivalent to charging to use more of the battery in an EV.

Will any of these succeed? Hard to say. Over time Tesla and other brave companies will test the market and we willl find out for what consumers are willing to pay.
 
This (in EU) will be tied into the mandatory ISA speed control systems that are being phased in now. Manufacturers will use this required technology as a way to leverage things to that might have been legally tenuous prior.
 
Want to go over the speed limit? Pay $$$/mo.

Want to have the AC on? Pay $$$/mo.

BMW will go bankrupt if they try this crap worldwide. Especially in the USA.

VinFast was going to do this initially for their batteries, but then found out later, this wasn't going to fly for the USA.
 
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