BMW and Mercedes are planning to test car subscription services this year.
The car industry is highly cyclical, which can result in volatility.
Auto companies hope subscription-based and other mobility services will make revenue more consistent.
The auto industry has posted strong sales numbers in recent years, which has made car manufacturers and dealerships scared about the future.
That’s because the auto industry is a cyclical business and the industry is bracing for a downturn.
But the auto industry thinks it might have the solution to its boom-or-bust nature: car subscriptions. Under this model, consumers would pay a subscription fee each month for the right to use a certain brand’s vehicles. Instead of buying a new car every few years, customers would pay car companies every month, which could make revenue more stable for manufacturers.
Brands like Cadillac, Lincoln, Porsche, and Volvo have tested subscription services in recent years, and BMW and Mercedes are set to join them this year, according to Automotive News. While neither brand has released details of what the services will look like, each hopes to test them on a limited basis to determine their long-term viability.
In general, automakers see mobility services like ride-sharing, car …read more
Source:: Businessinsider – Technology