Mercedes Shames BMW’s Subscription Model, Accuses of Overcharging Customers

Mercedes’ Paid Features: Is It Worth the Extra Cost?

Vehicle subscriptions have emerged as a fresh source of income for car manufacturers, enabling them to generate additional profits beyond the initial purchase. This trend initially took hold in the luxury market, but has now spread to include several mainstream brands who have established virtual storefronts. Similar to purchasing downloadable content for a video game, customers have the ability to augment their vehicle with extra features.

Mercedes serves as a stellar illustration of how a car manufacturer can significantly increase its profitability by implementing fees for specific features after a car is purchased. Top Gear magazine recently interviewed the company’s Chief Software Officer, Magnus Ostberg, for his thoughts on BMW’s choice to add an additional cost for heated seats.

The brand from Stuttgart has a unique strategy of providing a “premium and comprehensive encounter” while refraining from “charging our customers for every little thing.” The representative further acknowledged the availability of subscription plans at Mercedes, but emphasized that their customers “do not appreciate being constantly charged for small expenses.”

In the year 2022, BMW caused a stir with its new policy that made headlines for all the negative reasons. They introduced a subscription plan for their heated seats, which caused much outrage. It became apparent that the cars were originally equipped with the necessary hardware, but it was deliberately inaccessible unless customers paid for it separately. Those who bought a car without selecting the heated seat option could only unlock this feature after taking possession of the vehicle. Due to strong criticism and low demand, BMW eventually decided to retract this contentious subscription. However, the renowned German brand continues to offer several other features that require payment.

Mercedes caused quite a stir in 2021 with the release of a subscription option for their advanced rear-wheel steering system on the EQS. The standard version of this luxurious sedan offers a modest 4.5-degree steering angle at the rear in certain markets, but customers have the option to upgrade to the full 10-degrees for an additional fee. It should be pointed out that the more advanced system comes as standard on the EQS available in the US. And let’s not overlook the subscription service that offers access to extra power on specific EQ models.

When it comes to additional features that can be obtained after purchasing, both Mercedes and BMW offer a wide range of options. Mercedes offers an Excellence Package which includes 22 “digital extras” such as auxiliary heating/ventilation, remote door locking/unlocking, and remote window/sunroof control. Other add-ons that can be purchased for an extra fee include digital radio, headlights with an adaptive high beam, adaptive cruise control, and more. The complete list of available features can be found here, but their availability may vary depending on the country, model, and whether the car already has the necessary hardware installed.

How about BMW? We took a look at the UK store where we came across a wide array of products. The German brand provides adaptive cruise control and high-beam assistant, as well as integration with Apple CarPlay and adaptable M suspension. Additionally, there are options for subscribing to map updates and simulated engine noises, as well as package deals that include specific driver assistance and safety systems. It’s worth noting that certain items can be purchased with either monthly or yearly plans, while others require a one-time payment to permanently activate the function.

According to industry experts, automakers are confident that subscription services will become a lucrative source of revenue. Stellantis, in particular, has projected a significant increase in profits thanks to its “monetizable connected cars.” The company predicts an extra €4 billion in earnings per year by 2026, with this number rising to a whopping €20 billion by the end of the decade.

It can be challenging to accept the idea of paying for a feature that is already built into your car’s hardware. Despite this, automakers appear confident that individuals will continue to shell out money on a monthly or yearly basis for access to a feature intentionally blocked by the manufacturer. According to a survey conducted by S&P Global Mobility in the previous year, 82 percent of participants expressed their willingness to pay for a subscription.

Source: Top Gear