BMW and Lexus Launching Car Subscription Services

More automakers want their share of the subscription economy.

Subscription News: BMW and Lexus Launching Car Subscription Services

Two more automakers – BMW and Lexus – have announced they want to get in on the subscription economy, each with their own version of a car subscription service. BMW first revealed their plans during the Detroit Auto Show, but details were not disclosed at that time. BMW has now launched its pilot program, called Access by BMW, an exclusive service that gives members unlimited access to their choice of BMWs for one monthly fee which includes insurance, maintenance, taxes, car washes, detailing, personal delivery by a concierge and roadside assistance.

For $2,000 a month, at the Legend tier, subscribers can select a vehicle from BMW’s M2, 4 series, 5 Series or the X5. For $3,700 a month, at the BMW M tier, subscribers can select an M car, including the M4 convertible, M5, M6 convertible, X5M or X6M. There is a $575 joining fee, but it is being waived for the program’s first 50 members. The program is currently being launched in Nashville, Tennessee, but could expand across the U.S. if it is successful.

Subscription News: BMW and Lexus Launching Car Subscription Services

Source: BMW

According to BMW Blog, Access by BMW members will select their vehicle based from an iOS or Android mobile app, facilitated by local BMW dealers. A concierge will personally deliver the vehicle, fueled or charged, detailed and ready to go. The program requires a 32-day commitment. Daily vehicle upgrades are available. Access by BMW offers a few features that other car subscriptions are not yet offering: movement between subscription plans, pausing a subscription for a $200 convenience fee, and corporate memberships.

‘As customers continue to explore the growing mobility market, service-related offerings are becoming more in demand. With Access by BMW, our members will enjoy the freedom of personal mobility with access across a broad range of our highly emotional vehicles’ said Ian Smith, CEO of BMW Group Financial Services USA and Region Americas, in a news release. ‘Subscription-based services are of emerging interest for our customers, and we’re excited to be offering a mobility service to meet their individual and evolving needs.’

‘A pilot program is a great opportunity for us to learn.  In the future, the nationwide network of BMW dealers will be integral to the success of Access by BMW,’ added Smith. ‘”We will depend heavily on their close collaboration to continue to meet and exceed consumer expectations, and to ensure the sustainable development of this new business model.’

Lexus, the luxury division of Japanese automaker Toyota, is also getting in on the subscription economy. In December, Lexus will launch a car subscription for its new Lexus UX Compact US 200 and UX250.

‘When the UX goes on sale in December of 2018, there will be a new option in addition to the usual purchase and lease processes. For the first time in the history of Lexus, the UX will be offered through a subscription service. Details will be announced closer to the UX on-sale date,’ said Lexus in a news release.

Subscription News: BMW and Lexus Launching Car Subscription Services

Source: Lexus

Insider Take:

More and more automakers are looking for new ways to appeal to consumers. Though car subscriptions have features similar to traditional car loans and leases, they have some unique features which appeal to buyers: lack of long-term commitment, all-inclusive pricing, and low-hassle ordering and delivery. Automakers are testing their subscription programs out in limited markets, so they can learn from their customers – what works, what doesn’t, what price point is appropriate, what risks they face, etc. It will be interesting to watch as the market shakes out as to who succeeds and what best practices will emerge.