Ready to Spend Even More On Cars?

Ready to Spend Even More On Cars?

In South Korea, BMW has begun to offer some car functions through subscription services. You can take a monthly fee to use them or pay for permanent use

Ready to Spend Even More On Cars?

Subscription services are slowly becoming popular in the automotive world. We know that maintaining a car has never been cheap. Now, with prices rising around the world as you read this, it is not cheap to buy them either. The idea of paying a flat rate for the time you use the car has become interesting to make it a little more affordable. However, it turns out that automakers are getting greedy about the idea.

This week, BMW has opened ConnectedDrive in South Korea. That is an online store where you can pay to use some functions in your car; there are periodic subscription services available or you can opt for a one-time fee. As you can imagine, that idea is highly unpopular among customers, and yet it is slowly crawling into the market. For now, just take a deep breath to calm down; let us give it a closer look in context.

Most functions tied to subscription services are electronic (source: WheelsAge)
Most functions tied to subscription services are electronic (source: WheelsAge)

What are subscription services?

Two famous examples are Netflix and Spotify. In short, you pay a fixed amount every month and may use the service for as long as you pay. Some services come in tiers for you to choose, each one at a different rate; others prefer to change the rate based on displaying or hiding ads. Lately, that business model has superseded DVD rental and digital music downloads, respectively – remember Blockbuster and iTunes?

There are two undeniable advantage for users. One is that we get access to millions of titles anywhere as long as we have Internet access. The other is that we can keep all that content only for as long as we are using it. In other words, subscription services have given us unprecedented flexibility. It is a much better situation than accumulating discs and tapes which we will effectively use only every once in a while.

When it comes to cars, both rental companies and the very manufacturers have established subscription services. In general, the only thing you have to pay for besides the fee is fuel; insurance and maintenance are part of the deal. That idea is particularly handy to non-enthusiasts because they can use cars purely as means of transportation. There is no need to deal with insurance, check-ups, or repairs by themselves.

Heated seats are another item which became part of BMW's subscription services (source: BMW)
Heated seats are another item which became part of BMW’s subscription services (source: BMW)

What is BMW doing now?

As the Korean website shows, it is offering software functions as subscription services. Drive Recorder, for example, is essentially a built-in dashcam. You get a one-month trial period, then can choose to pay for a month, a year or three years of access. And there is the “Limitlessness” option, where you pay a single fee for permanent use. There are four other items available right now, which you can buy independently.

Now, to put things in context, offering items at an additional cost is not new. Up to not long ago, almost every car had standard and optional items; the latter are available either individually or in bundles. In fact, sticking to the standard list would often get you unpainted bumpers and plastic hubcaps. Despite looking bad and being undesirable, they became the signature feature of low-cost cars up to the early 2000s.

The thing is, those optional items were a purchase; you could get your car either with them or without. In BMW’s recent case, the car is manufactured with all the necessary equipment to use those functions; their use is now tied to extra charges. To put it differently, you will have to pay once for the car as a whole and again merely to use some of its functions. People did not like that and there is already research on it.

The BMW iX was one of the first models to use the company's curved screen (source: WheelsAge)
The BMW iX was one of the first models to use the company’s curved screen (source: WheelsAge)

Why are these subscription services bad?

Years ago, cars were much simpler as a whole. Offering, say, an audio system simply implied installing the device or not. Automakers could design cars in a modular way, where it was possible to add items and/or replace them with better options rather easily. That strategy used to be a strong sales argument because it allowed customers to have only what they wanted in the car; it helped avoid unnecessary purchases.

Nowadays, everything works as a group. Cars are using navigation systems to predict the road ahead and adjust driving parameters; audio systems will analyze where the car is to select appropriate music; and so on. Besides, there are more items available than ever. It would be too expensive to replicate that modular concept; they would have to properly work with every possible combination of present and absent items.

On the other hand, packing every car with all that comes at a cost; it implies using many high-end items and materials. Besides the recent supply issues, automakers are facing reduced profit margins as a result of their investment in EVs. Thinking rationally, it is understandable that they need to make more money out of every car. Making us pay more money for the same thing periodically, in turn, is definitely not.

Software-enhanced engine sound is another item on BMW's on-demand items (source: WheelsAge)
Software-enhanced engine sound is another item on BMW’s on-demand items (source: WheelsAge)

What can we do about that?

First of all, expressing our opinion. Last April, Cox Automotive released a report that pretty much confirms that people disapprove those subscription services. It also helps to engage in social channels, especially in official ones. Automakers invest in extensive research to guide their medium and long-term plans; if only few people voice that opinion, they may conclude that they can gradually force that as a new standard.

There are more direct actions to take as well. More often than not, things like paint colors or delivery time make us give up on a purchase; why would an undesirable trend not be valid? A part of making conscious purchases is standing for our opinions. Besides, companies will always favor what is the most profitable; if they see that subscription services are significantly harming their sales, they will quickly drop that idea.

Actions like those are important to keep drivers away from the bitter reality of modern video games; they already force players to pay for the base game plus each and every function they offer. It will be difficult to stop subscription services, especially in the crazy moment we are living, but we can always try. What other car functions you would hate to see offered as part of a periodic payment over the next few years?