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BMW Adaptive Suspension Can Be Added via Subscription. Suspension As A Service (SAAS)
(www.bmwblog.com)
this post was submitted on 20 Aug 2024
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Now, I can "kinda" see the rationale behind optional features on a car being either enabled via software or subscription. I believe the permanent enable price should be the same as if you added the hardware to the car as an option.
As to why this might make sense for a carmaker. In my work I've visited car manufacturers before, and from what I could see it's quite expensive and adds time to support the various options when building a car. You see they have the main production line, and units are pulled off the main line to fit the options at various points and then reinserted and this causes problems for efficiency and price per unit I think.
So, there's probably a cost saving to making the base car have all the options fitted and having a completely standardized production line. However, the expense is likely going to mean if they sold the base car at the usual base car price they would either lose money, or at the very least, the profit margin wouldn't be worthwhile.
However, if you know a certain percentage of people will want the options, and you can enable it with software later, it's possible building the hardware into every car as standard would work out overall cheaper. They might also be able to upsell to more people by making a subscription option, perhaps with maybe a free trial for the first say 3 months of ownership. That is, they turn everything on for 6 months for free, then revert you to the package you paid for. Hoping that you liked some of the features and will pay or subscribe to keep them.
What I don't like is when this stuff might become ONLY available as a subscription, the overall move toward subscription models for everything irks me a lot. I'd much prefer we still get to choose a package, and have the ability to upgrade later.
So I think my point is, the argument "the hardware is there anyway" doesn't really work, because they are likely going to install the hardware at a loss, on the assumption (backed up by their own numbers) they will sell enough to make a bigger profit overall.
They also likely bake into the numbers that a very small number of people will hack the car and enable the features anyway. The vast majority will not do this, though.
How does any of this benefit the buyer?
Asking for a friend lol
Well, I would say it SHOULD bring overall prices down. If the cost to build the top of the line model comes down to say the same as the mid-range model AND more people are say buying up. It means that competition would push overall prices down.
But of course not, it benefits the companies most, and given the choice of lower prices or more profit, they'll choose the profit every time.
If they go subscription only (because recurring revenue is the current business buzzword, so of course they will go subscription only) then overall cost for the life of the car will definitely be higher yet "feel" more affordable.
You're right that the idea has come from the mind boggling number of options in vehicles these days. The company I worked for recently had over a million different combinations, and making more physical parts standard fit saves them money.
However that saving is not passed on to the customer. The company pockets it all, and makes more money on top with the subscriptions.