BMW AG will start testing its car-subscription pilot in Tennessee next week, joining other automakers experimenting with new ownership models as ride-hailing and smartphones turn over traditional auto retailing.
Automakers are looking for ways to reach younger consumers whose shopping and transportation habits have been shaped by Uber and Airbnb.
BMW is following in the footsteps of GM’s Cadillac, which launched its Book subscription service last year, and
Generally, car subscription services let users change between different models of a brand’s vehicles for a frequently higher monthly fee than the one a customer would pay after buying or leasing a vehicle.
Part of that premium comes from the user’s access to multiple vehicles, and part of it comes from the insurance and maintenance services that come with the subscription.
Access by BMW
The service, called Access by BMW, will be offered by a local BMW dealership in Nashville starting April 2, according to the person familiar with the company’s plans. Also, the pilot program will be available this year but the date of when the program begins will be determined.
BMW’s North American chief Bernhard Kunht said the company was contemplating such a service at the Detroit Auto Show in January. A BMW spokesperson said that the company is planning a subscription program for 2018 but declined to give further detail.
The auto industry sees subscription services as a potential solution to its boom-or-bust nature. By having users pay a consistent, monthly fee rather than buying a car once every three-to-five years, auto companies can create more predictable revenue streams.
While the auto industry has posted strong sales numbers in recent years, car manufacturers and dealerships worry that a downturn is close.
This isn’t BMW’s first venture into new models for transportation.
In January, its captive finance arm introduced a flexible lease program that allows owners of its BMW and Mini brand vehicles in California, Washington, and Oregon to share their cars with peers or use them to drive for ride-sharing services. The leases are designed to help BMW integrate itself into “the fabric of the sharing economy,” the company said at the time.
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