Car Industry

BMW, Mercedes to test vehicle subscription services in the US

If the Germans have their way, we might be waving goodbye to buying or leasing.

BMW

Subscription services are the hot new thing with premium automakers right now. Cadillac, Porsche and now Volvo are all rolling them out, and the folks at BMW and Mercedes refuse to be left out of all the fun. The two German manufacturers are planning to launch limited pilot programs this year to test the business case for this new kind of car ownership.

Read: Car Subscription Service Guide

Subscription services, for those who don't already know, allow access to a car for a monthly fee that includes insurance, maintenance and the ability to switch cars. Most of these services are geared toward high-end clients with costs in the thousands of dollars per month. Volvo disrupted the subscription model by offering its all-inclusive-except-for-fuel Care By Volvo program for just $600 per month and only offering the choice between two trim levels on just one model.

Mercedes wants to make sure that those drivers who take part in its subscription service have access to the cars they want when they want.

Antuan Goodwin/Roadshow

BMW is less sure of its plans than Mercedes, based on statements from management. If it does roll out a pilot program, it will likely be very limited in scale and probably only serve a single market initially.

"We are in the phase of looking at it and evaluating together with BMW Financial Services," said Bernhard Kuhnt, CEO of BMW North America, in a statement. "And if we are going to do it, we are going to pilot it first to learn more about it." 

Mercedes wants to test the long-term merit of a subscription service, but first, it wants to iron out what it sees as some potential issues, according to Britta Seeger, global sales chief for Mercedes, in a statement to Automotive News.

BMW is taking a cautious, German approach to its subscription service by planning to only offer it in a single market initially.

Antuan Goodwin/Roadshow

"On the weekend, if it's sunshine outside and if everybody wants to have a cabriolet, and if I apply five times to have a cabriolet and I don't get it, what does this cause?" Seeger said.

Most of these services are still in their infancy, and it will be interesting to see how they can change the way we own and interact with our cars in the near future.