BMW (BMW.DE) has reversed its stance on a contentious practice of charging a monthly fee for activating hardware-based features in its vehicles, such as heated seats. The German automaker, responding to customer feedback, has decided to discontinue the policy, known as “functions/features on demand” (FoD), as reported by UK-based Autocar.
Pieter Nota, BMW’s board member for sales & marketing, stated in an interview with Autocar, “What we don’t do any more – and that is a very well-known example – is offer seat heating by [subscription]. It’s either in or out. We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high. People feel that they paid double – which was actually not true, but perception is reality, I always say.”
Earlier this year, BMW sparked controversy when it introduced subscription pricing for heated seats in its vehicles, even for those not originally purchased with the option. Although this feature was only implemented in international markets and not the US, customers voiced their discontent through surveys and polls.
According to a study conducted by Cox Automotive in May, 75% of respondents believed that “features on demand will allow automakers to make more money,” while 69% indicated they would consider shopping elsewhere if specific features were only available via subscription for a particular brand.
A spokesperson for BMW USA clarified that subscription-based heated seats were never an option in the US market, adding, “We will continue to refine the Connected Drive offerings to make the latest technologies available to our customers and meet the demand in the markets.”
Nota, however, indicated that the company intends to extend FoD or subscription pricing for select software features, including self-driving capabilities, driving aids, and infotainment options.
Tesla pioneered the concept of subscription-based features, offering options like Autopilot and the more advanced full-self-driving (FSD) beta feature. Now, other automakers are following suit, with GM setting sights on generating $20 billion to $25 billion in annual subscription revenue by 2030.
A survey conducted in July of this year by S&P Global Mobility revealed that 82% of respondents who had experienced a free trial or existing subscription “would definitely or probably consider purchasing subscription-based services” in a future new car purchase.
While BMW has chosen to abandon subscription fees for hardware-based features, the trend of subscription-based services remains a significant part of the automotive landscape. This decision by BMW represents a triumph for consumers who have voiced their opposition to the company’s controversial policy. Despite the shift, it appears BMW may still forge ahead with other software-based subscription services.
Source: Yahoo Finance