TECHNOLOGY

With subscriptions, Automakers mimics Netflix’s playbook


In 2021, credit Card statements are loaded with routine monthly charges: Netflix for videos, Spotify for music, Xbox game passes for gaming, Peloton for fitness – etc. Financial services firm UBS estimates that the “subscription economy,” driven by epidemic-induced changes in buying habits, will grow 18 percent a year for the next four years, reaching 1.5 1.5 trillion by 2025.

Now car manufacturers want to join the party.

The idea is simple: we’ll sell you a car with a dash cam, or it could be hands-free, or it could train you with telematics data to be a better driver. But if you really want to Use Any new toy, you have to pay extra. Credit Tesla popularizes the idea that cars can be updated with software even after many have been driven.

General Motors told investors this month that subscription services could bring in $ 20 billion to $ 25 billion annually by 2030. The company says 4.2 million customers have already paid for its Onster security services, including an app that costs 15 15 per month. Electric car startup Rivian said in a recent financial filing that it could bring an additional ,500 15,500 to the life of each car, including an automated driving feature and software-enabled services with infotainment, internet connections and subscriptions for diagnostics. BMW created buzz and excitement last summer with plans to charge via subscription fees for features like heated seats. In the United States, Automaker offers subscriptions to an onboard dash cam and a remote car starter.

Over the past few years, automotive companies have “planned to transform from an industry that sells products to an industry that sells services and products,” says Brian Irwin, head of automotive and mobility practices at Consultant Accenter. Today’s vehicles come with multiple computer chips, cameras and sensors – and thus, an interesting opportunity to use detailed information in both creating and selling new products.

The industry’s move towards electrification may make the concept more attractive. “Consumers are looking at EVs as a new technology that enables new things,” said Alan Wexler, who oversees services and data insights at General Motors. This means that they are willing to think about paying for the car in a new way. In fact, if you start thinking of your wheels as a “platform”, a device like a smartphone that will need to purchase some extra apps to fit nicely into your life, if car manufacturers like it.

In 2019, BMW withdrew plans to charge drivers an annual fee for using Apple CarPlay in the image above.

Photo: BMW



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