While in theory consumers dislike subscription-based access to in-car features like on board Wi-Fi or heated and cooled seats, with only 25 percent interested in these subscriptions per a recent survey, a new study suggests most vehicle owners are pleased with subscription services once they actually try them.
The new study by S&P Global Mobility says “the perceived outrage doesn’t match reality” and that vehicle owners are “overwhelmingly satisfied and likely to resubscribe” to subscription-based services offered by GM, BMW, and other automakers.
A significant takeaway from the study is that auto buyers are significantly more willing to pay for some in-car subscription services than for others. Consumers showed a high willingness to subscribe for access to advanced driver assist systems (ADAS), improved navigation, high-beam assist like GM IntelliBeam automatic high-beam headlamps, and various advanced safety and utility features.
The study showed vehicles equipped with these advanced features as standard often had higher MSRP than consumers were easily willing or able to pay. However, by spreading out feature cost over time through a subscription and thus offering a lower up-front purchase price, consumers were better able to budget for these highly practical and desirable features.
On the other hand, relatively inexpensive and less life-saving or lower-utility conveniences such as heated and cooled seats were relatively unpopular as subscription services. Breaking out numerous features as subscriptions rather than a few key ones was also off-putting and seen as “overkill” according to the study.
Inexpensive comfort features that were easier to absorb in up-front vehicle cost were unpopular among many automotive consumers. While 89 percent of buyers expressed the “highest satisfaction” with subscriptions to automatic high beams and other expensive safety features, only 30 percent were willing to subscribe to heated seats, heated steering wheels, or features that are seldom used.
The study also looked at GM’s decision to drop Apple CarPlay and Android Auto phone mirroring features from its future electric vehicle lineup, replacing them with a new Google-powered infotainment system. While The General says it’s comfortable with the choice, S&P Global Mobility adds some more context.
Since 89 percent of connected service subscribers already resubscribe, the study suggests GM is dropping CarPlay and Android Auto access for another reason. S&P researcher Fanni Li says the primary motivation is “GM cannot get consumers’ usage data from the infotainment system if users only connect via third party apps.”
GM wants consumer usage data, but this creates another potential problem. While up to 80 percent of consumers are willing to give up at least some data in exchange for a free service, only 31 percent trust automakers with all of their personal data. This means GM and other OEM companies will need to balance data collection against privacy concerns to make their in-house connectivity viable.
The S&P Global study overall shows high viability for subscription in-car services, but also indicates these services must be carefully selected by automakers since consumers value some subscriptions much higher than others. Free trials were particularly good at translating into future paid subscriptions, with 82 percent of respondents saying such a trial made them willing to buy a subscription to that service on a future vehicle purchase.
GM is relying on software and service subscriptions to extend revenue streams from its vehicles to second and third owners. The company expects its Ultifi platform and software-as-service to generate annual revenues of $20 billion to $25 billion by 2030. Its plans also include offering approximately 50 different digital subscription services by 2026.
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Comments
Wrong Wrong Wrong, who did GM hire to came up with this decision?
It’s totally wrong. No one wants to foot out subscription based service.
Reverse your thinking and fire those who make those assumption, because they got the market wrong.
It’s propaganda disguised as a study.
It’s incredible how much this article making people believe, that consumer believe this BS.
It’s all about their marketing/ IT campaign, filling their revenue generating target by lossing more trust from the buyer.
Don’t do this, and it won’t generate that type of revenue like those Marketing//Revenue management idealist think they will get. GM will loose more than they will get.
By then, Mary Barra will be gone, and the next CEO will reverb her decision, or fire her executive team on this non-sense.
Onstar is already a fail of itself,
The only question asked in the survey:
What would you prefer?:
1) Repeated kick in the n*ts for eternity
2) In-car subscriptions
BS survey, nobody wants to pay every month for a feature that is already on the car.
You assume all the features they’re going to offer are already available.
We’re already paying a fortune
Story time. There was once a free-to-play online game that offered a premium monthly subscription. Subscribing meant the game gave out 10x the amount of points versus the free version. The company discovered people were willing to spend hundreds (some thousands) of dollars on this piddly game because customers felt it was worth saving years of their lives in order to upgrade their vehicles in the game.
This is basic human psychology. If you offer a monthly subscription, you will convince people to spend more money than they intended or would have spent if it were offered as a lump sum purchase. What makes GM’s situation worse is they want your data so they can sell it. This isn’t about offering smart services. This is bilking the customer. And as for hiding automotive safety features behind a paywall…it’s just wrong.
“ hiding automotive safety features behind a paywall…it’s just wrong.”
^^^THIS!
GM isn’t losing Android functionality. The vehicles run Android Automotive. It can run the same apps natively the same way it runs mirrored in Android Auto. CarPlay is a different story.
It’s still losing phone mirroring capabilities for android users. Meaning, you can’t just use your phone’s data plan for navigation and app streaming. You will have to pay a separate data plan to GM.
$600 heated seats or $16.50 a month. If you trade your car in three years, you will get nothing for it in resale. If you keep your vehicle for 6 years you will pay $1200 for those heated seats, and get nothing for it in resale. Etc. So think hard before you subscibe to a bunch of monthly payments.
I agree with what you’re saying, but what if I only payed for heated seats the 4 months out of the year I used them during the winter months – $396 over 6 years?
Do you trust GM to ALLOW you to pay only by the months you will use a single subscription service?
Some services, like heated seats, will be available monthly, then a few years down the line, the service will only be available for a year at a time and finally, it will be mandatory at the time of purchase.
The article says GM ultimately will offer 50 subscription services. Is that across its whole line or on each vehicle? If it is a single vehicle, you will never actually own the car. It will just be on a constant lease to the initial and all subsequent owners.
GM will likely sell the heated seats (and other things) with 12 month contracts.
Sorry, but when I read studies like this, I stop to read it again because I can’t believe what I just read. Hasn’t OnStar been enough of an example of subscription services? I really think the GM board of directors need to clean house of upper management starting with Mary Bara. I read every week of something that GM is doing, going to try to do, or proposing…. and then just shake my head.
Not allowing motor options and bed sizes in a Colorado/Canyon, charging $600 for paint colors other than black…. on and on. I used to be proud to be a retired GM employee!!
Study is WAY wrong. Just look at GMs OnStar subscription rates (after the trial period). And then GM tried to sell OnStar to other brand owners, which bombed. And the backlash over including 3 years of OnStar in the purchase price was another disaster. I pay for OnStar but most don’t and if anything else was a forced subscription, I’d buy another brand.
I used to pay for OnStar to have the hands-free phone service, but since they cut that off, they can keep that and any other “service” they might offer. That proved that they cannot be trusted.
Are people morons? Who finds it acceptable to purchase a toaster that will allow you to make toast for the first 90 days and then after that you have to pay a monthly subscription to use the toaster to make toast?
This is in effect what the automakers are trying to do. These entities that perform studies that say people find this acceptable and are willing to pay, from whom did these entities collect their data? Doesn’t really matter. Obviously these entities have been collecting data from morons.
The analogy would be more like,
You have to pay a subscription to toast more than one slice at a time.
And another subscription if you want to use the bagel feature.
And another if you want to be able to control how toasted (lightly to very) the bread comes out.
And another if you want the toast to automatically stop toasting when it reaches the set time.
And another if you want a chime or alert when the toast is ready.
I like how myself and people I’m close to have never had the opportunity to take part in any study like this, focus group, early polling, etc. yet it gets put out as news and we’re supposed to believe it. Seems these “studies” are really just propaganda used to create an Overton Window.
I think it’s safe to assume that just like political surveys these can be skewed anyway they want.
CNN’s been doing it for decades.
Not me, never. If I want those options I will buy the model that has them but no monthly subscriptions. I buy my vehicles outright and don’t want any payments.
Why is it that when I check the like box for a comment it zeros out the numbers in the box? Almost like GM doesn’t want to see the truth spoken on the forum! Tomg
Refreshing the page causes the correct like and dislike numbers to be visible again, with the new upvote/downvote included.
Get a 15 year old kid to hack into your car’s system and get the features for free,like they should be. You already paid for them.
Absolute BS survey or study. WHO THE HELL IN THEIR RIGHT MIND would pay for basic features like heated seats, power this and that when it is basic features already and for decades that they paid for in the gas and now EV cars? I for one will avoid any company that tries it. Fine you want to charge for built in navigation go ahead I one dont need it. Fine you want to charge for wifi, etc. If people want it they can pay for that enhancement. I dont need it nor use it regularly and my phone does just fine. PAY ATTENTION GM! How many ON STAR subscribers reenrolled fromt he original freeby? I bet not as many as one thinks.
Go ahead, put those heated seats in my car, I won’t pay any monthly fees to get them activated. I have been working on vehicles for 45 years, it is easy enough to rewire them into the the fuse box or directly with a new switch and use them that way.
If they are installed in my new vehicle, that means I paid for them and they damn well better work!
LOL, there will be a huge aftermarket business activating the heated seats and etc. this idea will backfire and piss off customers.
“Consumers Don’t Mind In-Car Subscription Services, Study Finds” – LOL, yeah right.
exactly, those are the idealist markters, trying to milk customer for all the GM grandeur of getting revenue.
It won’t be profitable, and will piss more people off.
This might works for higher end like cadillac’s, but not chevy, gmc. no.
consumers also love paying 80k for a base truck, study finds. only 4% of consumers want low vehicle prices, the study concluded
there. this one might actually be true if we go sales figures tho
More bs from the General and others, Consumers keep taking it on the chin and the wallet and keep asking for more. When they do put this in place there has to be a big backlash from Comsumers to walk away from these purchases. The bean counters keep looking for more juice from the orange, in reality there is only so much that will come out. Unless the public starts complaining and voting with their pockets expect more of this BS.
The “revolt” has already begun.
Ford has stopped making sedans and now only makes pickups, which were their high profit cash cows.
Go to any Ford dealer right now and you will see line after line of top trim PUs, Mach Es and Lightnings at $80,000 and up. You might find one base model Ranger at under $40K, but that is about it.
Those high priced vehicles are sitting there because they are not selling. People are either not able, to pay those prices due to inflation, can’t qualify for that much of a loan, or are simply not willing to pay as much as they did for the house they are living in. They will hang on to their present vehicle and let the dealers go broke.
The dealers don’t seem to get it. They are still adding “market adjustments” and packing the cars with nitrogen filled tires ($200), door guards ($300), LoJack ($1,500) and other things at outrageous prices. Most dealers finance the cars on their lots. If they don’t drop prices soon the system is going to crash.
GM has similar issues but nowhere near as bad as Ford. Now GM wants subscriptions? That will be one more log on the fire that kills sales.
I read BMW started this , sure follow the leader , it will never fly , Ill rewire my seats myseld.
I have purchased GM cars for many years. I will not purchase again if you drop CarPlay!
You may find GM going down the road that BudLight and Ben&Jerrys are traveling.
Did you hire the Budlight VP that made the decision to put a trans on the can?
I find having to pay for In-Car Subscription Services a total mess. Why should I pay a monthly charge for features to work when I have to lay out in excess of 100K for a premium vehicle? I received my 2022 Denali Ultimate in Oct. 1022. When I discovered I needed a subscription service for the maps etc. I was very disgusted. Especially when they included some google map access for 2023 models
I will be selling the Denali and by my next truck from a manufacturer that isn’t trying to increase profit through the back door.
It may be a “back door” to increase profits, but GM has been very open about its intentions.
In a public statement many months ago, GM CEO, Mary Barra, said that they way forward for GM was to have a new revenue stream of $25 BILLION dollars/year from software in the company’s vehicles (AKA subscription services) in addition to vehicle sales.
Unfortunately, Ms. Barra seemed unaware or oblivious to what subscriptions will do to sales (see BMW).
Their focus should be on selling high-volume, entry-level and mid-level cars. You know, like they used to do.
The absence of GM products on the roads and highways around my area is shocking.
That’s where the real money is.
Study says…..Total BS Mary! Over the years my father and I have owned at least 75 Chevrolets, including a dozen Corvettes, many trucks (Chevy Truck Legend) etc. We have been looking at updating my wife’s ’18 Cruze and my ’19 LTZ Silverado (10K miles) but Mary and her staff have killed that idea. I will never pay a subscription to something like heated seats or steering wheel. It kills me to say it, being a “Bowtie” guy my entire life, we are looking at other manufacturers to trade with.
Shareholders need to find out who is doing this and remove them, immediately! Anyone remember Roger Smith?
Nobody wants to pay monthly subscription fees to use something already installed on their car.
Many, however, are dumb enough not to notice or care about a couple extra bucks hidden in a monthly car payment though as long as the total number fits their budget.
What next? Charging us for the air we breathe everyday? Don’t give the you know who idiots (censored adjectives here) another law to propose.
Soon you will be able to defeat the paywall courtesy of Chinese hackers.
Subscribe for heated seats? My Bolt EUV is the first plug-in I’ve owned (my eighth) that did *NOT* have a heated steering wheel, nor heated seats…. I’m in Buffalo, NY and there are plenty of days that are VERY COLD. But the standard ‘Cloth Seats’ are both comfortable and intrinsically warm…. To my great surprise heated seats ARE NOT NECESSARY IF you take the Cloth. The optional Leather is probably hot in the summer and bone-chilling cold in the winter….
I wouldn’t think anyone would be dumb enough to ‘subscribe’ for this.. But then again – I’m the only person on my street with an 8-bow-tie-phased array ROOFTOP tv antenna… I get about 30 stations, including high-def ones when the station offers them… I pay for cheap INTERNET only. Every Week I get offers to take TV service from either the cable or phone companies… But I like free. My ‘Tenna Rotator’ kaklunker works just fine, and is ‘handshaked with what is going on in the roof. Every few degrees of turning causes the control box to ‘kaklunk’ over to the next position.
I also have an ancient JVC (Japan Victor Corporation) DVD recorder that performs a ‘TIVO’ function – also free of charge – for recording programs on a weekly schedule. No one makes that kind of thing anymore….. Too bad. And yes, I have had to fix my ancient one a few times, successfully fortunately.
What GM is counting on is the fact that so many people will piss away their last nickel on any of this trash. People only look at the monthlys, whether it is purchase or lease. Instead of looking at what they can afford, they look at what they “want” which is just one ups-manship. The reason car prices are so unrealistic today is that the auto companies know fools will spend what they don’t have.
i would like to see the demographics of the survey and read how the questions were worded. I bet you can get a survey to prove almost any opinion that you want to that way.
If GM gets rid of Car-Play or Only goes to Google and charges a monthly fee, I WILL buy another brand of vehicle.
Over the years, my brother has bought countless GMs, mostly Chevrolets. I used to buy GM as well, but they presently don’t have anything I want, mostly due to the cramped interiors with those chest freezer size center consoles.
My brother just had this delightful experience: Bought a ’23 Colorado in order to have something that would pull a small trailer with his belongings from out west to his new home near me. He was able to drive it 47 miles (not a typo) before the engine surged, faded, then died. The instrument panel and radio went bang and nothing was visible. It was towed back to the dealer, and the deal was “unwound” before the paperwork was processed. Note: just before it went onto the tow truck, it started and ran fine. But, would YOU chance keeping it?
Got a second Colorado (the dealer actually had a few). Successfully drove it across the US, towing a light trailer, and all was fine. Got here to his new home and while the drivetrain ran, there were further electronic issues. No one had answers, no one could fix it, no nothing. The engineers at Chevrolet had no answers either, and this was AFTER firmware upgrades. Fortunately, he was able to sell it for a very good price. Now, he drives a car made in Indiana, and it runs like a top. It is NOT a General Motors product.
This brings to mind a paraphrase of something Ronald Reagan said: I didn’t leave General Motors; they left me. This subscription nonsense, along with taking away phone connectivity, does it for me. If nothing else, it is the nuisance of having to give the new phone number to those one calls that may want to call back. Pfui on that.