Subscription "features"

[HangTime]

I think the crux of the matter is that people feel uneasy about subscribing to a product that carries no ongoing marginal cost to the provider. In other words, it doesn't cost Mercedes anything on an on-going basis if you have improved acceleration (although you could make an argument that it could result in more warranty claims if the hardware is being worked harder).

A potential analogy I thought of is tiered tickets on public transport. Once a train is commissioned the first class zones are already implemented. It doesn't cost the rail service any more if someone is sat in first class or not. Yet they charge extra for it on a marginal basis. You could think of it like paying subscriptions on top of your normal train ticket to be able to use first class, which is already manufactured, already part of the vehicle just like the engine on a car.

I think this would make more sense if it wasn't an annual fee but was on a shorter timeframe like weekly. So most of the year you don't need better acceleration for your daily commute. But then you are going on holiday or doing a track day or whatever and want to pay the £39.99 or whatever to have more power that week. That might be a more attractive proposition, meaning you pay less of front for your vehicle compared to something more powerful but with the ability to boost performance on a short term basis.

It might even help reduce the 'itch' people get to upgrade their car. i.e. you buy your Merc, then after a couple of years you subscribe to the upgrade, and it feels like a new car. A bit of a stretch, for sure, just mulling it over.

 

[Siliconslave]

difference with the train thing is your paying for more space (usually) and services, or at the very least a more exclusive section not packed to the gills with people.

I'd also say on your final point theres nothin stopping them offering this as a single payment to alter the tune (etc) - I can see the value in offering one engine in two states of tune to allow people to select between economy and performance, and a fee to switch the tunes isn't too unreasonable (but why they couldn't put it in as a feature i don't know...).

 

[Greebo]

Don’t like it, don’t want it, but I won’t be buying a car that has a subscription model any time soon so good luck to you guys.

Ultimately they are testing the waters, if it becomes profitable it be here to stay and they all will be doing it. Good times.

Depends on how its done. So long as they have the lifetime one off payment as well, i dont see an issue with it. makes buying a second hand car easier as you can buy/subscribe to any spec you want.

I am not against what bmw have done. X amount to have your heated seats switched on permanently which is no more than they would have cost to spec when buying the car or so much per month to just rent them.

 

[Greebo]

Depends if all cars having the same hardware is cheaper than having multiple different parts depending on model, wouldn't surprise me if just having one set of hardware worked out cheaper, plus they have the option of additional revenue via subscription.

This. people are saying they manufacturer has already had the cost of fitting the kit so why charge as there will be lots of cars where nobody pays the extra but I presume the economies of not having to make loads of different cars with different specs and they can just be all the same car must save the manufacturers a good chunk of money

 

[Rroff]

This. people are saying they manufacturer has already had the cost of fitting the kit so why charge as there will be lots of cars where nobody pays the extra but I presume the economies of not having to make loads of different cars with different specs and they can just be all the same car must save the manufacturers a good chunk of money

Only if they have poor design and production flow - if you have a decent design and production process it won't save money - hence why loads of manufacturers these days share a common platform and produce their own variants like Renault and Nissan, etc.

 

[Doobedoo]

Depends on how its done. So long as they have the lifetime one off payment as well, i dont see an issue with it. makes buying a second hand car easier as you can buy/subscribe to any spec you want.

I am not against what bmw have done. X amount to have your heated seats switched on permanently which is no more than they would have cost to spec when buying the car or so much per month to just rent them.

It won’t stay like that though. It’s about revenue generation, not for the customer. They know they have a revenue stream left untapped with second hand car sales.

 

[Semple]

I'm awaiting the subscription fee for the braking system.

 

[Greebo]

It won’t stay like that though. It’s about revenue generation, not for the customer. They know they have a revenue stream left untapped with second hand car sales.

Still its extra revenue even if its a one off fee for lifetime. they may well get somebody paying £499 when the car is 7 years old to switch a feature on and they may well have had a few years with somebody else subscribing as well. Still a massive win for the manufacturer.

 

[Doobedoo]

Still its extra revenue even if its a one off fee for lifetime. they may well get somebody paying £499 when the car is 7 years old to switch a feature on and they may well have had a few years with somebody else subscribing as well. Still a massive win for the manufacturer.

Yes no one is disputing wether it’ll be a win for the manufacturer, it’s how bad the consumer (I hate that word) will be shafted in the process.

Basically they understand that at the minute they only make money at the point of the sale. Now they can make money for the lifetime of the vehicle, if the car changes hands they may make money from each owner. Great for them, I’m skeptical by nature though.

 

[Greebo]

Yes no one is disputing wether it’ll be a win for the manufacturer, it’s how bad the consumer (I hate that word) will be shafted in the process.

Basically they understand that at the minute they only make money at the point of the sale. Now they can make money for the lifetime of the vehicle, if the car changes hands they may make money from each owner. Great for them, I’m skeptical by nature though.

But only if somebody had subscribed before it changes hands rather than either buying it outright or speccing it on the car when they bought it new. Nobody is forcing the second or third owner to buy/subscribe any missing options. No different to looking for a car with the right spec to what you want. Now it will be much easier/better for the used buyer as they have more options.

Downside is that it will be a nightm are buying one as you will need to check which options were either specced when new or a lifetime sub bought later. I am sure some people will lie and say the car comes with x and y and then once you have bought it they stop their subs.

 

[gc123]

eventually as said there will be companies set up to activate the features , and if like tesla they try to lock them on service they will either be unlocked or not be serviced by dealers. as soon as manufacturers realise that they are potentially losing service work they will rethink it.
hmm 8year old motor secondhand having to pay a subscription.....not.
on a further note if they did alter the spec because you had something enabled that they deemed wasnt on when sold new , how long before challenged in court. bottom would fall out of there second hand market and thus with resale affected many people would not buy new.
either dont fit it when building it or fit it and charge for it or as said one off within first couple of years , but definately not ongoing sub.