The future of your car is loaded with subscriptions
Pay-to-Unlock Features in Second-Handed Cars: A Review of Marshall’s Perspective on the Trend and Trends in Feature-Dependent Vehicles
It used to be that when buying a car, you just picked out the model and color you wanted, and then selected the optional extras. You didn’t pay when the dealer rang up the total. A base price for a car is becoming more common as people subscribe to the extras. Big stuff like driver assistance features or fast-charging capability and even smaller stuff like heated seats and dash cams can be unlocked in a new car by paying the automaker a yearly or monthly fee. This trend has been quickly adopted by the auto industry for new cars, and it’s now making its way into used cars too.
This week, we welcome WIRED staff writer Aarian Marshall back to the show. The trend of pay-to-unlock features in cars, and how they are being changed for the second-hand vehicle market, are topics of discussion.
Aarian Marshall and the Hotline for GadgetLab: Solar Keys from Bon Appétit, Have a Nice Future and All the Beauty
Aarian recommends recipes from Bon Appétit, especially if you’re hosting Passover seder. Lauren recommends the documentary about photographer Nan Goldin, All the Beauty and the Bloodshed. Lauren cohosted the new WIRED show Have a Nice Future.
Aarian Marshall can be found on Twitter @AarianMarshall. Lauren is called LaurenGoode. The person is Michael Calore. I want the main hotline atGadgetLab. The show is produced by a man namedBoone Ashworth. Solar Keys is the theme music for us.
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What if buying a used car is cheaper than buying one? An analysis of the BMW/Apple anti-Berger story in South Korea
news reports often get people angry, but wow, did people get mad over an article published last summer about BMW. It said the German vehicle manufacturer sells a subscription service in South Korea that costs $18 for things that drivers are used to, such as heated seats.
Consumers reacted to the news with outrage. Monthly fees are now included in many services like Spotify, coffee, and razors. It seems like something is broken at the core of global capitalism when someone asks you to subscribe to heated seats. If a car company could give or take away access to tuchus warmers with the press of a button in faraway Germany, what did it mean to “own” anything?
It’s no surprise that global carmakers are jealous of the fantastical returns of big tech firms like Microsoft and Apple: Sell software, get Googley returns, or so the theory goes. General motors has said it wants to wring $25 billion in annual revenue out of subscriptions by 2030. Mary Barra said last year that the average car buyer is willing to spend $85 a month.
Automakers’ latest target in the subscriptions push—or shakedown, depending where and how comfortably you’re sitting—is used car owners. The average lifespan of passenger vehicles has steadily ticked up in recent years and now sits at around 12 years in the US, with cars cycling through two or three or four owners before they hit the scrap heap. Carmakers are working on making those owners into subscribers too.
Gary Silberg, the head of the global automotive sector at accounting and advisory firm KPMG, says it is a huge market. He says automakers are trying to use the increasingly software-stuffed car to resolve a “silly” situation. “You spend all the money building the car, you spend all the money designing it and building factories, and yet you don’t get to talk to your customer,” Silberg says. More connected vehicles and the apps that go along with them mean that automakers can. Michael Bensel, Cariad’s vice president of mobility and connected services, says that connected cars have completely changed the landscape of customer interaction. He says that the relationship with car buyers changes from occasional contact at dealerships to continuous contact during the entire ownership period.
