As car manufacturers increasingly turn to the controversial concept of subscription services, vehicle connectivity specialist VNC Automotive has questioned whether consumers are as against the idea of subscribing to vehicle features as many believe.
“Consumers are no stranger to the subscription model, now firmly a part of daily life for many, with millions of people regularly paying to use services such as Netflix, Amazon Prime and Spotify, as well as subscribing to deliveries of groceries. This familiarity may smooth the transition for manufacturers as they look to recreate that model inside their vehicles.”
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VNC argues that, rather than paying for an expensive option at the point of sale, there was potential for customers to switch on or deactivate options according to needs and budget. Heated seats won’t be necessary in summer but could be activated for winter driving.
There’s an obvious tension between OEMs wanting to maximise their revenue, and customers wanting to use the hardware that’s already fitted to their vehicles. But the subscription model could offer a personalised and dynamic driving experience, assuming OEMs streamline the payment structure beyond ‘dumb’ annual fees.
Modern vehicles aren’t visiting the dealership as frequently as OEMs would like, thanks to longer service intervals. But regular software updates offered by OEMs could be billed as ‘digital valets’, enhancing existing features and adding new ones. Such ‘refreshes’ ought to strengthen the relationship between OEMs and used vehicle owners.
Subscription features also make the car more configurable for subsequent owners, allowing them to specify features as they would with a new car but without the associated high purchase price of a new vehicle.
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By GlobalDataAdditionally, customers switching between vehicles could have their subscribed features move with them, with options activated according to each driver’s subscription package. These packages represent an opportunity for OEMs to ‘lock in’ customers to a personalised subscription, encouraging brand loyalty.
Peter Galek, product engineering director at VNC Automotive, said: “Exciting new features or upgrades for a vehicle are a strong incentive for traditional vehicle users to subscribe. Such models give OEMs the best chance of marketing more features over the vehicle’s lifetime.”
A warning to OEMs – beware the temptation of subscription services
