With modern cars coming equipped with more technology than ever before, car manufacturers are looking at new ways to generate revenue and that includes offering various upgrades as ongoing subscriptions.
The OnStar service from General Motors, introduced way back in 1996, was one of the first subscription options of its kind but things like this will become much more commonplace throughout the industry. For example, Ford’s Blue Cruise semi-autonomous driving system requires a $600, three-year subscription to activate.
“This is not entirely new,” principal auto analyst for IHS Markit Stephanie Brinley told NBC News. “You already have people paying for connected services (like GM’s OnStar). But it’s now going beyond safety and security. Technology has made it possible to look at a lot of other areas” where companies can charge monthly or annual fees.
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Over-the-air (OTA) updates have opened up a world of new possibilities for car manufacturers. According to IHS Markit, as many as 350 million vehicles will have OTA abilities by 2025. General Motors is already making use of this and launched a Maps+ service for vehicles that weren’t equipped with built-in navigation. Owners of roughly 900,000 vehicles built from the 2018 model year can add navigation to their infotainment systems for $15 a month.
According to GM’s vice president of Global Connected Services, Santiago Chamorro, customers want “an easy and convenient in-vehicle experience that improves over time. We listened to customer feedback and developed a product that works seamlessly with our current infotainment systems and provides a highly personalized experience that will iterate throughout the lifetime of the vehicle.”
German car manufacturers are also jumping on the bandwagon. Mercedes-Benz may charge owners of the all-electric EQS for special “soundscapes” while BMW has acknowledged that customers could be given the option of subscribing to things such as heated seats and adaptive cruise control.