Subscription Fees Get Mixed Results from Car Buyers

A year after BMW began selling subscriptions to use its vehicles’ heated seats in South Korea, and with General Motors predicting annual software and services revenue of $25 billion by the end of the decade, S&P Global Mobility has surveyed nearly 8,000 consumers on the topic of vehicle feature subscription services.

S&P Mobility reported the results of its survey yesterday, saying that car-shoppers are largely satisfied with subscription-based infotainment services, but data security and privacy are concerns.

According to S&P Mobility, fewer than 30% of survey respondents are willing to pay for heated seats or a heated steering wheel by monthly subscription, and navigation and safety/security features were the ones most desired in respondents’ next vehicles.

As for infotainment subscriptions, the survey found that consumers favor their smartphone over their vehicle where features are redundant. Gen Z and Millennial respondents are most likely to drop connected-services subscriptions because of similar services on their smartphones, says S&P Mobility.

This could explain GM’s decision last year to remove Apple CarPlay and Android Auto user interfaces from its forthcoming electric vehicle lineup, opting for the company’s own infotainment system instead. According to S&P Mobility, GM sees an opportunity in consumer usage data.

"GM cannot get consumers' usage data from the infotainment system if users only connect via third party apps like Apple CarPlay and Android Auto," says Fanni Li, connected car services research lead at S&P Global Mobility. "Having this data on their own will become one of the competitive advantages for OEMs."

When it comes to data collection, 37% of respondents worry about security issues, while 32% fail to understand the value that a connected service would provide from the shared data, says S&P Mobility. At the same time, the survey reported 31% of consumers “feeling comfortable” with OEM’s collecting their data.

These concerns did not seem to alter respondent subscribers’ attitudes towards subscription services, however. S&P Mobility reports in a subset of about 4,500 respondents who had experienced a free trial or an existing subscription on a model year 2016 vehicle or newer, 82% said they would definitely or probably consider purchasing subscription-based services on a future new vehicle purchase.

Other key statistics from the report are:

• “89% of current connected-services subscribers resubscribe.”
• “45% of respondents had the service activated at the dealership, typically as part of a free trial period.”
• 28% of respondents “either did not know that connected services were available, and/or noted the dealer did not offer (or even mention) them.”
• “Paid upgrade safety features, such as high-beam assist and driving-video recorder, earned the highest satisfaction—89%—of all connected services.”
• “74% of respondents are willing to share data in exchange for free services, with Gen Z and Millennials being the most (80%) likely.”