American consumers are accustomed to paying monthly for all kinds of services, from movies to dog entertainment. Automakers are now the latest to join the growing list of companies that are finding ways to use their subscriptions to steal their revenue.
Many drivers are willing to pay for safety, security, and entertainment features such as satellite radio and naval technology. The question is, how far will manufacturers go, how much will car buyers be willing to pay continuously rather than in advance?
Recently, BMW began to heat up the idea of making a monthly charge for seats. And Mercedes can charge “audio” for its new EQS electric car. Ford’s Blue Cruise Semi-Automatic system already raises the price of the sticker by $ 3,200, but drivers will also have to pay $ 600 for a three-year subscription to activate the technology.
“This is not new at all,” said Stephanie Brinley, chief IHS Markit spokeswoman. “You already have people who pay for related services (like GM OnStar). But now it goes beyond security և security. “Technology has made it possible to look at many other areas where automakers could charge monthly or annual fees,” Brinley said.
From the earliest days of the car, automakers have offered a variety of upgrades, from larger engines to leather seats. But today’s vehicles have become wheeled computers, some using 100 or more microprocessors to run everything from their engines to infotainment systems. And the possibilities of two-way communication have opened the door to endless possibilities.
Introduced in 1996, OnStar allowed customers to remotely open the car door or ring the horn if they could not find it in a crowded parking lot. The system can also warn the authorities in the event of a serious accident.
The next step is to remotely upgrade the software on board or send new features via smartphone or OTA updates in the style of smartphones.
By 2025, a new IHS Markit study estimates that 350 million vehicles will have OTA capabilities. It is projected that by 2030, one-third of all vehicles will have such opportunities.
This is possible for semi-automated systems that require regular software upgrades, such as frequent map updates. According to the manufacturers, continuous improvements justify subscription fees, as well as charges for any payment.
Sirius / XM satellite radio station may soon have a lot of competition as other services try to transmit audio and video to your car. Something that is expected to grow in popularity as fully autonomous vehicles become commonplace. At the 2020 Consumer Electronics Show in Las Vegas, Daniel Kirchert, then CEO of the troubled start-up Byton, told NBC News that the company expects to make as much money to transfer audio and video to its M-Byte electric car as it did. : the sale of the vehicle itself.
Adding new features to an existing vehicle can be a great opportunity. The new GM Maps + are aimed at vehicle owners who are not equipped with built-in navigation. For $ 15 a month, owners of around 900,000 vehicles built since the 2018 model year can now add navigation on their car touch screens to existing services.
Customers want an “easy, comfortable vehicle experience that improves over time,” said Santiago Chamorro, GM, Vice President of Global Connected Services. “We listened to customer feedback, developed a product that works seamlessly with our current infotainment systems, and provides a highly personalized experience that will be repeated throughout the life of the car.”
Tesla has often used OTA technology to fix software. It was also one of the first manufacturers to sell remote digital upgrades. Initially, it allowed Model S buyers to opt for the low-end version, which actually shared the same battery as the longer package. Owners can then pay for the extra capacity of the battery to be “unlocked”.
When the new Mercedes-Benz electric car hits the market later this year, it will feature several “sound scenes” or digitally created sounds that replace the “notes” emitted by the engine by a car using an internal combustion engine.
“We are considering the creation of a future recording” for which the car manufacturer may charge for the download. This was reported to NBC News by Thomas Coopers, a recording engineer.
Some automakers are even looking for familiar ways to turn familiar functions into current revenue generators. BMW is exploring the idea of ”subscribing” to customers to use things like heated seats and customizable cruise control. Buyers may not want to pay for these features in advance, but may decide to activate them later, BMW said.
Some car manufacturers now allow customers to subscribe to the car itself. Through Volvo Care, the buyer receives an inclusive package that includes everything but gasoline. PorschePassport allows you to change cars and get out of different cars whenever you want.
It seems clear that the auto industry is lagging behind in terms of how it pays to make plans to transform the retail world, with automakers looking for ways to use those models to change the car ownership experience.