The verdict is starting to come in on automotive subscriptions, and it’s looking like a resounding flop. A recent study conducted by Smartcar, a company specializing in connected car management platforms, reveals that 76 percent of vehicle owners have not subscribed to any paid connected services offered by their manufacturer.
While the future of vehicles is undeniably tied to greater connectivity (it’s expected 96 percent of new models will be connected by 2030), motorists do not seem ready to pay for features that were once free.
Too expensive, not essential enough
The study, which surveyed more than 1,000 vehicle owners in Europe and the U.S., highlights a clear trend:
- • 76 percent of drivers do not pay for a subscription
- • Among those who are subscribed, 49 percent pay for a service and 51 percent get free access
- • 50 percent of non-subscribers would agree to test a subscription... but only if the price dropped
The problem is simple: drivers don’t see the added value of these subscriptions. Many of them believe the features should be included in the vehicle price, as was previously the case.
Manufacturers' missteps
Some brands have already tried (and failed) to impose subscriptions for functions that are already integrated into vehicles. BMW wanted to charge for heated seats via a subscription... before backing down in the face of customer outcry. Audi removed climate control synchronization to then offer it... as a paid option.
Mazda provoked anger on forums by making remote start a for-pay feature. The Canadian division explains, however, that it launched Mazda Connected Services with the MyMazda app as a mid-cycle update for CX-5 and CX-9 models 2021.5, then progressively on other models from 2022. When first introduced, the app included features such as remote start, door lock/unlock and vehicle location, with a two-year free trial subscription on purchase. Prior to the introduction of Connected Services, Mazda offered third-party remote start solutions for interested customers, but had never offered factory remote start on key.
GM, for its part, is still betting on subscriptions, convinced that customers will agree to spend up to $135/month for its connected services.
Services that really interest drivers
The study shows that motorists are not completely closed to subscriptions, but that they want more services for their money:
- • 61 percent believe their current subscription lacks features
- • 67 percent would agree to pay more, but only for really useful services
The most requested services are emergency assistance, vehicle maintenance and tracking, and navigation. The least “valuable” service in the eyes of owners? Virtual keys.
Budget considerations, but also perceived value
The study doesn’t break down the results by vehicle range. However, it’s obvious that owners of high-end cars are more inclined to pay for the services than owners of lower-end ones.
Let's take the example of the Nissan Versa, one of the least expensive cars on the market. It offers a Wi-Fi hotspot on its SR finish, but how many drivers actually use it?
Motorists saturated with subscriptions
After tip fatigue and screen fatigue, here comes subscription fatigue. Consumers, already faced with rampant inflation, no longer want to pay for options they considered to be acquired.
Automakers will have to reinvent their business model if they want their connected services to finally find a taker.