Subscription-based access to vehicle features are among the most unpopular ideas automakers have ever pursued. But as the industry transitions into EVs and profit margins dwindle, automakers are coming up with creative ways to make more money off of customers. No one wants the subscription model, but car companies are trying it anyway. BMW caught heat for proposing subscriptions for optional comfort features before; now, the company is trying it again, this time in South Korea.
Editor’s Note, July 14, 2022: A few days after we published this article, a representative from BMW of North America contacted Jalopnik to reassure us that the company will not be pursuing the subscription-based model currently implemented in South Korea for North American customers. We’ve included BMW of North America’s full statement at the bottom of this article.
BMW tried and failed to get people to pay $80 a year for Apple CarPlay and Android Auto. Then, in early 2020, BMW rolled out a software update to its vehicles that brought new connected features. Among these updates were new connected car services BMW was trying to sell as “ongoing software updates” for things like navigation and charging services for plug-in hybrids. It was a preview of the slow march into a money-grab dystopia of having your car’s features locked behind software you have to pay to activate. BMW reps told our own Jason Torchinsky that the company hadn’t really decided whether it would pursue subscription-based options. But as we can clearly see, the decision had already been made in other markets.
A BMW rep spoke with The Drive and explained that the decision was motivated by low take-rates on certain features like adaptive cruise control. In a way, this reasoning makes sense to a certain extent: Why build thousands of cars with a feature most customers will never use? Let people pay for what they want.
Don’t let that argument take you in, though. This is all very bad.
Now, BMW has gone all-in on feature subscriptions in South Korea. Available for purchase through an online digital hub called BMW ConnectedDrive Store, customers in South Korea will have to pay extra for even the simplest of features. Take heated seats: Customers can pay the equivalent of $18 a month, $176 for a year, $283 for 3 years, or $406 for permanent access. If you want a heated steering wheel, that’ll be extra: roughly $10 a month, $161 for three years, or $222 for unlimited. Permanent access to Apple CarPlay will cost South Korean customers just over $304, while enhanced engine sounds played through the stereo will be $137. Even driver safety assistance features will cost our friends in South Korea: High-beam-assist headlights, which automatically brighten or dim the headlights depending on traffic, will cost $8 a month, $84 for a year, $122 for three years or $183 for unlimited use.
It’s maddening, but this business model probably isn’t going away any time soon. As we transition to EVs, automakers will lose out on dealer service center profits from stuff like oil changes and routine maintenance. It’s unclear whether BMW intends to bring this subscription model from South Korea to the U.S., and if so, how the prices will compare.
BMW of North America’s statement clarifying how Functions on Demand will work for U.S. customers:
As premium vehicle purchasers, BMW customers in the USA demand a high level of equipment in their vehicles. Options like heated seats are ordered on over 90% of the BMW’s sold in the USA. BMW of North America does not expect factory option purchase levels to change significantly going forward. BMW Functions on Demand on the other hand is designed to offer premium features through software upload that use data and sensors from factory option hardware already built into BMW vehicles. As an example, some BMW models equipped with certain specific options from the factory can currently add the first two Functions on Demand features available in the US – namely a dash cam function called BMW Drive Recorder and BMW Remote Engine Start function—through a software download in a customer’s vehicle. The BMW Drive Recorder feature uses the cameras needed for advanced driver assist systems for dash cam functionality. This gives customers the possibility of adding new software based functionality and a degree of flexibility in that they will be able to test, and then decide whether or not to purchase a vehicle feature that was not initially available at the time of the original vehicle purchase.
With BMW Functions on Demand, customers will be able to explore new software based features on a short-term basis by purchasing a trial, or buying that feature outright for a period of time or for the life of the vehicle. It is important to note that BMW Functions on Demand is intended primarily as a digital aftermarket solution and will not affect options that were ordered at the time of the vehicle purchase. For example, if a vehicle is initially ordered with heated seats, that option will not go away nor be subjected to a monthly fee.
Please note that BMW Functions on Demand and the possibility to test or purchase select options after the point of purchase is part of a global aftersales strategy that BMW has introduced in various markets around the world, including on a small-scale basis in the U.S. The features that are available in this digital aftermarket will vary from market-to-market. Customers can browse available features in their local ConnectedDrive store online.
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