Premium brands are dipping their toes into subscription offerings

Premium brands are dipping their toes into subscription offerings

Mercedes-Benz has launched a subscription service for its cars in the US. For an entry price of just over US$1,000 a month, 'Mercedes-Benz Collection' is designed for 'those drivers who prefer the variety and convenience of a subscription service'.

Mercedes' new subscription scheme and monthly fee echoes that of Volvo Cars - 'Care by Volvo'. Volvo estimates that a quarter of its sales could be through its subscription service by 2023.

'Audi on demand' is offered in some Chinese cites as well as in San Francisco and at Munich Airport.

The new Mercedes subscription service allows subscribers to switch between different types of vehicles depending on their immediate needs or lifestyle, Mercedes says. The service is available as a pilot in two cities: Nashville, TN and Philadelphia, PA.

It is a collaboration between Mercedes-Benz USA, Mercedes-Benz Financial Services USA and Mercedes-Benz dealers.

"We're always looking to stay ahead of our customers' needs and wants, as well as to bring new people to the brand," said Dietmar Exler, president and CEO for MBUSA. "We know there is a market opportunity for people who would like the ability to move in and out of vehicles, depending on what they need or want at a particular point in time, or who don't want to own a vehicle right now. That's why we are excited to test the waters with Mercedes-Benz Collection."

"Customer's appetites are changing when it comes to how they access products and services, and our financial and mobility services are evolving to fit those demands. Adding Mercedes-Benz Collection's subscription services to our product portfolio is a natural fit," said Geoff Robinson, vice president, Mercedes-Benz Financial Services USA LLC. "We are working to provide one of the most diverse offerings in the market today and expect to learn a lot from this pilot."

There are three tiers in the program – Signature, Reserve and Premier – with two offered in each city and prices ranging from $1,095 to $2,995 per month (depending on city/level). Subscribers pay a one-time activation fee of $495 and may then choose from all the vehicle body styles offered in that subscription tier, including Mercedes-Benz SUVs, sedans, coupes, cabriolets, roadsters and wagon models. Each tier also allows access to the company's popular high-performance Mercedes-AMG models.

The Mercedes-Benz Collection works through a combination of the new Mercedes-Benz Collection app and a local concierge. Once subscribed, customers initiate vehicle exchanges, concierge communication and other actions via the app. Concierge staff then ensure the delivery is consistent with the details and preferences in the customer's profile. Subscribers can access any type of vehicle within their tier with no mileage limitations. The monthly subscription fee for the tier also includes insurance, 24/7 roadside assistance and vehicle maintenance.

How the Mercedes subscription service works:

  • Those interested can download the Mercedes-Benz Collection app via the Apple App Store or Google Play Store and hit "Sign up"
  • Users then create an account (provide a credit card, select a plan and provide a picture of the driver's license associated with the account).
  • Information is verified, and driving and credit history are checked (subscriber may be contacted with any questions). In most cases, the application is processed and the subscriber is contacted within one business day.
  • Subscriber is contacted to find out his or her vehicle needs and desired delivery time and location. After the first delivery, subscribers put their requests in via the app. Requests received by noon can typically be fulfilled the next day, Mercedes says.
  • Concierge delivers the new vehicle washed, with a full tank of gasoline and takes away the previous vehicle.

Further information on Mercedes-Benz Collection is available at collection.mbusa.com.