We’re used to paying a membership fee as consumers for a variety of services. Our cell phone data plans, the monthly fees we pay to stream music and TV shows, and now we have to pay memberships to access functions on our car?
Contrary to popular belief, automakers are increasingly paying for services and features for their automobiles, even those that are physically integrated into the vehicle.
This week, BMW garnered media attention after it was discovered by numerous news organizations that it was offering subscriptions for heated seats in several countries, including the UK, where the service starts at £15 (€17.70) per month.
Some people have criticized such actions as being avaricious and exploitative. However, the sector has had to deal with issues including shortages and clogged supply chains as a result of the ongoing COVID-19 pandemic and the conflict in Ukraine.
Matthias Schmidt, a market analyst for the European automobile sector, claims that this move by automakers toward paywalls and subscription models has been in the works for a while.
He told Euronews Next, “It makes perfect sense since the business model in the automobile market is evolving.
The primary profit area, he continued, “was so before that, when the vehicle was driven off the factory and delivered to the buyer.”
The vehicle is evolving into a profit center during the course of its life, which is what is currently altering.
Pay more to access greater features and services.
Although BMW‘s heated seats subscription may have made news, the automaker also provides a wide range of additional pay-to-use options.
For instance, you can add a heated steering wheel function in the French BMW ConnectedDrive Store for €15 for one month (€110 for one year, €160 for three years, and €240 limitless).
You may also add a feature that automatically turns on and off your high lights when there is oncoming traffic or a car in front of you, starting at €10 for one month.
“Customers have the option to add certain features they did not order when the car was built at a later time through the ConnectedDrive Store. If a new customer’s circumstances change after making a purchase, this information may be useful.
She added that such subscriptions also allowed drivers to “experiment” with certain features before committing to full purchase with a one-time payment. “For secondary owners, this functionality is particularly useful, as they now have the opportunity to add features the original owner did not choose,” she said.
Other automakers like Volkswagen, Audi, Toyota, and Tesla have experimented with subscriptions for specific features and services that are available on demand, so it’s not just BMW that offers paywalled extras.
The Drive reported in 2017 that Toyota was locking its key fob remote start function behind a monthly subscription, meaning that owners of specific models would not be able to use the proximity remote start function on the fob unless they were signed up for a more comprehensive connected services plan.
Later, the news source quoted Toyota as saying that it never planned to sell the key fob remote start as a functional feature and that it was examining the requirement for membership.
the automobile market is in trouble
Manufacturers are attempting to figure out how to maintain their profit margins amid supply chain instability, geopolitical unrest, and the shift to green mobility, Schmidt added.
The lockdowns in China and the crisis in Ukraine affected output, thus auto industry consultants JD Power and LMC Automotive earlier this year significantly reduced their prediction for 2022 global light vehicle sales.
Additionally, the move to electric vehicles is posing challenges for conventional automakers, particularly in regions like Europe where politicians have approved a ban on new gasoline and diesel cars starting in 2035.
As more cars become internet-connected, they are able to incorporate new technological technologies, making it simple to deliver updates and unlock capabilities over the air.
As long as it’s black or white, any colour will do.
Because of persistent supply chain disruptions around the world, some automakers are being forced to reconsider both the interior and exterior of the vehicle.
For instance, it is rumoured that Renault and Tesla are reducing the number of colours available to expedite delivery.
According to Automotive News, Tesla’s Berlin factory is only producing the Model Y in black or white; the company’s Shanghai production will provide automobiles in either red, blue, or silver.
Customers who select white or black may anticipate receiving their vehicles in October, while those who select the other colours won’t get their vehicles until March 2023 at the earliest.
Tesla did not immediately react to a request for comment from Euronews Next.
For its part, Renault is giving owners of its Arkana SUVs three simple colour choices: black, white, or grey.
With its “Fast track” offer on the Arkana, which is now being delivered in France, it promises a new vehicle in as little as 30 days, as opposed to the five months that customers typically have to wait.
Instead of the typical full variety of six colours, the cars are only available in three. There is only one engine option and only one trim level (RS Line) available. Half of the new Arkana automobile registrations in France in June were fast-track orders.
According to Schmidt, because they improve the effectiveness of the production process, these kinds of standardizations may be here to stay.
In any case, that makes perfect sense because most automobiles are two or three colours if you just glance out your window.
Your newest “wheeled iPhone”?
Additionally, as software becomes an increasingly important component of cars, automakers will need to carefully consider how dependent they want to be on companies like Apple and Android.
With the “next generation” CarPlay technology that Apple unveiled last month, users will be able to purchase gasoline directly from their dashboards as early as this fall.
With the new functionality, CarPlay users can bypass the customary process of entering or tapping a credit card and instead use an app to travel to a nearby pump and pay for gas directly from a screen in the car.
The Fuel applications are the most recent step in Apple’s ongoing campaign to enable tap-to-buy functionality from the navigation screen.
It already allows applications for parking, charging electric vehicles, and placing food orders through CarPlay, and it is now adding apps for driving-related tasks like keeping track of business trip mileage.
Using the vehicle data, CarPlay will seamlessly display the speed, fuel level, temperature, and more on the instrument cluster, according to Apple. “Deeper integration with the vehicle will allow users to do things like control the radio or change the climate directly through CarPlay,” the company said.
There will be more details regarding the upcoming version of CarPlay, and announcements of compatible automobiles will start late in 2019.
Carmakers must now make a difficult decision, according to industry analyst Schmidt.
“They must determine whether or not to take on the tech sector. Are we going to create our own software and offer Apple CarPlay or Android a rival?
He continued, “And I think automakers are terrified of surrendering their soul to the devil, if you will, the devil for them potentially being the software business.
They will soon need to make a significant decision.