There are basic rules for coming up with these types of product subscriptions:
Is it something a large number of customers can’t live without?
Is it something that costs money to support and continue developing? Subscriptions help defray that cost and loyal users are happy to keep it going.
Will the feature be actively used on a regular basis, going forward?
Now apply these to seat warmers, suspension adjustments, self-driving, or whatever else shows up in the future. If you don’t hit all three, head back to the drawing board.
P.S.: This isn’t limited to cars. It’s equally true for any hardware product.
BMW is always making headlines with this crap, are there any other brands doing this shit? I know Hyundai IONIQ has a free trial for you to be able to unlock your car and whatnot with an app, later they will do it subscription based.
As someone who owned a 1993, a 2000, and a 2008 BMW in succession, I cannot believe anyone would buy the pieces of crap they have turned into.
I stopped buying them when they started piping in fake engine noise into the cabin and dropped all pretense that the cars would last beyond the lease period (I don’t buy new cars).
Imagine suffering an accident and having to pay a plus because of a feature you can’t even use on the parts you replace. I feel this is non-competitive bullshit that is following the trend Elon Musk started, although it probably started much earlier.
People act like subscriptions are a new thing for cars, and somehow mentally gloss over the fact that they have to physically go in to renew their energy subscription weekly, not to mention the quarterly, and bi-annual subscriptions for oil and various maintenance respectively.
Everything has always been a subscription, you’re just a frog that’s well done.
The key differences is utilities you’re paying for the generation & maintenance of key resources - without gas, water and electricity we wouldn’t be able to survive. Road tax you’re helping to pay for the renewal and upkeep of the road surface (among other local services)… Left alone the road will degrade & will become unusable.
Suspension as a Service is milking what should be a perpetual cost when purchasing the vehicle. If the hardware is already installed, it should be available for the owner to use. They’re not paying for the upkeep of the vehicle, or even ensuring the suspension remains functional… All they’ve done is placed the function behind a pay wall. They can argue they’re maintaining the software, but it’s utter bullshit and I hate the fact this has become a norm within B2B (for example network appliances)
At least with luxury subscriptions such as Spotify, Netflix, NYT, etc you’re getting access to their content, which they renew. Here you get access to something you should have had access to from day 1.
Gas oil need money to drill and refind from sources and car suspension does not, it maybe need to get a check up or replace once in a long while and not every months
Now, I can "kinda" see the rationale behind optional features on a car being either enabled via software or subscription. I believe the permanent enable price should be the same as if you added the hardware to the car as an option.
As to why this might make sense for a carmaker. In my work I've visited car manufacturers before, and from what I could see it's quite expensive and adds time to support the various options when building a car. You see they have the main production line, and units are pulled off the main line to fit the options at various points and then reinserted and this causes problems for efficiency and price per unit I think.
So, there's probably a cost saving to making the base car have all the options fitted and having a completely standardized production line. However, the expense is likely going to mean if they sold the base car at the usual base car price they would either lose money, or at the very least, the profit margin wouldn't be worthwhile.
However, if you know a certain percentage of people will want the options, and you can enable it with software later, it's possible building the hardware into every car as standard would work out overall cheaper. They might also be able to upsell to more people by making a subscription option, perhaps with maybe a free trial for the first say 3 months of ownership. That is, they turn everything on for 6 months for free, then revert you to the package you paid for. Hoping that you liked some of the features and will pay or subscribe to keep them.
What I don't like is when this stuff might become ONLY available as a subscription, the overall move toward subscription models for everything irks me a lot. I'd much prefer we still get to choose a package, and have the ability to upgrade later.
So I think my point is, the argument "the hardware is there anyway" doesn't really work, because they are likely going to install the hardware at a loss, on the assumption (backed up by their own numbers) they will sell enough to make a bigger profit overall.
They also likely bake into the numbers that a very small number of people will hack the car and enable the features anyway. The vast majority will not do this, though.
Well, I would say it SHOULD bring overall prices down. If the cost to build the top of the line model comes down to say the same as the mid-range model AND more people are say buying up. It means that competition would push overall prices down.
But of course not, it benefits the companies most, and given the choice of lower prices or more profit, they'll choose the profit every time.
If they go subscription only (because recurring revenue is the current business buzzword, so of course they will go subscription only) then overall cost for the life of the car will definitely be higher yet "feel" more affordable.
You’re right that the idea has come from the mind boggling number of options in vehicles these days. The company I worked for recently had over a million different combinations, and making more physical parts standard fit saves them money.
However that saving is not passed on to the customer. The company pockets it all, and makes more money on top with the subscriptions.
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