Consumers Willing To Adopt Some In-Car Subscriptions According To Survey

Consumers Willing To Adopt Some In-Car Subscriptions According To Survey

Time Stamp: July 22, 2023 1:14 PM
Source Node: 2180837

A recent study by S&P Global Mobility reveals that consumers are willing to pay for connected-car services, but only ones offering clear value or available with a free trial. However, they are less interested in features they won’t use or are already available on their smartphones.

Automakers like BMW and Mercedes-Benz have faced backlash introducing subscription-based products and services in their vehicles. But according to the S&P Global Mobility survey, consumers are generally receptive to subscriptions when they offer exposure to new features and technologies. When offered free trials or existing subscriptions on newer vehicles, 82 percent of the survey’s respondents said they would consider purchasing subscription-based services for future new-vehicle purchases.

The survey also highlighted the importance of offering value-added services through subscriptions. Paid functional upgrades, especially enhanced navigation and advanced driver-assist system (ADA) functionality, are highly desirable. Safety features like high-beam assist and driving video recorder received the highest satisfaction ratings among connected services. However, features like heated seats or remote start garnered less interest because consumers are used to paying for these items as part of an options package.

GM’s decision to eliminate Apple CarPlay and Android Auto in favor of their native infotainment system is intended to leverage this trend by increasing subscription retention and providing access to more consumer usage data. The S&P Global Mobility survey highlighted that while consumers have concerns about data privacy, 74 percent of respondents said they are willing to share data for free services and consider automakers more trustworthy than technology companies like Google or Meta.

What was not evident in the survey was whether most consumers were willing to pay a monthly subscription for added performance. Mercedes-Benz is offering Acceleration Increase, a performance subscription that on its electric vehicles increases a car’s output by 20 to 24 percent. However, BMW has no intentions to offer over-the-air performance upgrades for its future electric vehicles. Not because it sees any issues in doing so but because it believes the income generated by the subscription fees won’t be profitable enough to cover the technical requirements and regulations.

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