In This Article Show
Key Takeaways
- Due to customer pushback, BMW canceled its subscription services for hardware-based features like heated seats.
- The German automaker initially believed that such subscriptions would become popular and offer flexibility to future owners of used BMWs.
- Despite the setback, BMW continues to succeed with software-based subscription services like parking assist. The U-Turn on Heated Seat Subscriptions
BMW has recently made headlines—but not for the reasons they’d hoped.
The German automaker has decided to pull the plug on its subscription services for hardware-based features, most notably heated seats. Pieter Nota, BMW’s board member for sales and marketing, cited a “lack of understanding from customers” as the primary reason for this decision.
Flexibility for Future Owners
Initially, BMW’s subscription model for hardware-based features was designed to add value throughout the vehicle’s lifecycle. The idea was simple: Future owners of a used BMW could activate features that the previous owner didn’t need or want. Market analysis even suggested that the popularity of such subscriptions would only grow over time.
However, a year into the experiment, BMW has admitted defeat and reverted to the traditional model of factory-installed features.
Perception vs Reality
One of the major stumbling blocks for BMW was the perception of cost. For instance, the traditional one-time payment for heated seats was around $409.33, while the subscription would cost $18 monthly.
Over the span of three years, the subscription would cost $648—significantly more than the one-time payment. Pieter Nota acknowledged this, stating, “People feel that they paid double—which was actually not true, but perception is reality.”
A Silver Lining
While hardware-based subscriptions may have hit a roadblock, BMW is still finding success in software-based services.
Features like parking assist are well-received when offered as a subscription. According to Nota, “People know it’s a certain piece of software they can download that costs money. It’s the same as downloading a film or an extra feature on an app.”
Final Thoughts
BMW’s heated seat subscription saga is a cautionary tale for automakers looking to monetize hardware-based features. While the concept seemed promising, it ultimately failed to resonate with consumers.
However, the success of software-based subscriptions suggests that the subscription model isn’t entirely flawed; it just needs to be applied in the right context.
