BMW is ready to launch its new car-subscription pilot, called Access by BMW. The pilot program will start at a local BMW dealership in Nashville, Tennessee starting April 2. Few details about the program have been released.
Car subscription services allow users to switch between different models of a brand’s vehicles for a monthly fee. The insurance and maintenance services come with the subscription. Because of these additions, the monthly payments are usually higher than what would be paid under traditional lease contracts.
The subscription pilot program is a way for the automaker to see if it can attract younger customers. Ride hailing companies like Uber Technologies Inc. and the widespread adoption of smartphones have upended traditional auto retailing. Automakers now see that subscription services could lead to more consistent and predictable revenues than depending on new car purchases every three to five years.
BMW’s plans for a subscription-type service were mentioned at the Detroit Auto Show in January, but there were no additional details given at the time. It joins several other automakers in beginning to offer this type of service. The company has also launched a flexible lease program that allows BMW and Mini brand car owners in California, Washington and Oregon to share their cars with family and friends.
Cadillac launched a car subscription concierge service called BOOK last year. The Cadillac program was first available in New York City and will expand to additional larger U.S. cities over time. Volvo is set to launch Care by Volvo this spring. Volvo’s program combines lease, insurance and maintenance into one monthly payment for the brand’s new XC40 compact SUV.
Lincoln and Mercedes-Benz will also reportedly be launching their own subscription services this year. It remains to be seen if other automakers will decide to follow suit. The ones that don’t may find themselves missing out on a lucrative new revenue stream.