Shulou(Shulou.com)11/24 Report--

According to news from Nov. 22, automakers are now offering paid subscription services such as automatic switching of near and far lights and remote start of vehicles. They want to charge customers for the use of vehicle functions to get more revenue, but many car owners are not convinced.

The following is the translation:

What do you think if you can remotely unlock the car through the app for $5 a month? How about spending $25 a month on an advanced cruise control system or $10 on a heated seat?

With more cars connected to the Internet, carmakers are no longer satisfied with the relatively low-margin car manufacturing and sales business, and are eager to make huge profits like Silicon Valley technology companies. These companies want customers to pay monthly or annual fees to use certain in-car features, making billions of dollars in revenue.

But unlike Netflix, users don't log in to their original accounts on new cars, and car buyers don't seem to be interested in the idea.

But for carmakers, the advantages of this model are obvious. As a result, automakers can not only earn recurrent income for years after consumers buy a car for the first time, but also have a long-term relationship with customers and build brand loyalty, said Kristin Kolodge, vice president of market research firm J.D. Power.

Mark Wakefield (Mark Wakefield), head of automotive and industrial operations at AlixPartners, a consultancy, believes that this approach will also allow carmakers to further simplify production by producing cars of uniform specifications. Car owners can add functions according to their own needs.

All this is made possible by the emergence of wireless software updates. The technology was first proposed by electric carmaker Tesla about a decade ago and is now becoming the mainstream model of the auto industry. Cars are now more connected and computerized to the Internet than ever before, which means that car companies can add new features to cars remotely.

Well-known brands such as Lexus, Toyota and Subaru are inviting car owners to pay to use functions such as remote locking or starting the car. In some BMWs, users can pay to unlock the automatic switching function of the far and near lights, and the headlights will dim when there is a vehicle coming in the opposite lane. In 2020, BMW came up with the idea of paying for heated seats and steering wheels. Both GM and Ford offer paid subscriptions to the highway hands-free driving system (hands-free highway driving systems) for car owners.

But automakers still don't know exactly what features consumers are willing to pay for and which ones they will reject.

In 2019, BMW abandoned a $80 annual subscription plan to support Apple's CarPlay function in its car after widespread resistance. In December, Toyota said it would reconsider a paid subscription plan for remotely started vehicles.

"I think we're going to see some interesting ups and downs," Colloch said. "

'carmakers risk making customers feel like they're paying twice, 'Mr. Kelloch said. Users may feel that they have to pay both for the car's built-in features and for activating them again. She added that it may be easier for carmakers to make users subscribe to new services about vehicles rather than on-board features that are already familiar.

Car owners are not interested in this recurring payment model.

A study conducted by Cox Automotive in April found that 75 per cent of consumers were reluctant to subscribe to most car features. An in-depth study found that 92% of the respondents said that the seat heating and cooling function should be included in the purchase price, and 89% of the respondents said that the vehicle remote start function should also be included in the car price.

The New Jersey legislature is considering a bill that would ban automakers from charging subscription fees for features that use hardware already installed on cars and require no long-term service from the company. It is reported that hackers have been helping car owners upgrade their cars for years, and the subscription function may be their next target.

Still, carmakers see signs of making money. Automakers such as Ford and GM plan to generate at least $20 billion in annual revenue from in-car software services by 2030.

Wakefield of AlixPartners says wireless software updates present a huge opportunity for automakers to launch new subscription or pay-per-view features. Maybe one day in the future, car owners can spend more money to make their cars more efficient, more sporty, or make electric cars have higher mileage.

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