Automakers might be ready to capitalize on the emerging market of Features on Demand (FoD), but in order to do that, they will need to educate their customer base. According to a new study, only 21% of car buyers are aware of the subscription-based features in the automotive world. While there is skepticism around the new technology, people are interested in discovering what’s in store for them.
FoD is considered one of the hottest upcoming trends, allowing automakers to generate huge profits by unlocking certain software-related features on their models for a monthly fee. Some companies including BMW and Mercedes-Benz already offer a number of software-activated features, while many others are set to follow in the near future.
In that context, Cox Automotive spoke with over 2,000 individuals who are looking to buy a car sometime in the next two years, asking them about Features on Demand. The study showed that around 75% of the respondents believe that FoD will allow automakers to make more money. The biggest concerns are they might be too expensive (58%) and not represent a good value (41%), alongside fears about data security (41%) and privacy issues (40%).
Read: Shockingly (Not), Consumers Of All Ages Aren’t Buying Into In-Car Subscriptions
Despite the low consumer awareness and skepticism, an impressive 41% of the respondents said they are interested in FoD. 65% liked the fact they will be able to test new features in their cars without the commitment of buying them in the first place. Similarly, 61% will enjoy the option to upgrade or downgrade their vehicle as needed, and 54% like the ability to access new technology all the time.
Another part of the study reviews the systems that represent the greatest revenue opportunity for automakers. These include stolen vehicle location and recovery system, parking assist, digital keys, and in-vehicle Wi-Fi, joined by streaming services, virtual assistants, and sophisticated ADAS in the longer term. Customers of Tesla, Jeep, Dodge, and Ford proved to be more prone to consider buying vehicles with FoD.
Analysts believe that the right way for automakers to market subscription-based features is by offering free trials. This would allow vehicle owners to try them out and experience the benefits of FoD. In the survey, 65% of the respondents said that free trials would be a “positive selling point” and make them “more likely to consider a brand”.
