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.