While Most Car Subscriptions Struggle, Volvo and Porsche Expand
BMW and Audi are both shuttering their subscription services at the end of the month, joining other automakers that have ended their plans.
Yet Care by Volvo and Porsche’s Drive subscription services both continue to flourish.
The secret to success might be keeping drivers in the same vehicle for the duration of the subscription, rather than letting them change vehicles frequently.
The idea of swapping out a sedan for an SUV or a coupe for a convertible on a whim seems great. With a subscription service, you pay one flat fee each month, you’ve got access to many or all of an automaker’s lineup, and insurance and maintenance costs are included. You can also cancel your subscription much more easily than you can get out of a traditional lease. However, in practice, automakers have found that the frequent swap gets old for most customers. The companies that have successful car-subscription programs have found that customers prefer to pick one model and stay with it—and that’s what Care by Volvo and Porsche Drive are doing.
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BMW and Audi have both announced they will be shuttering their subscription services by the end of January. Ford, Cadillac, and Mercedes-Benz subscription offerings have also been closed down. All of these former services were united by one feature: the ability to swap vehicles on a regular basis at a pricey rate.
Costs ranged from $1000 per month for Audi’s lowest tier of its car-swapping service to the $3600 a month subscribers had to shell out to drive multiple AMGs in the Mercedes service. Allowing subscribers to switch out vehicles hasn’t been cheap for the automakers, either, as Gartner VP and analyst Mike Ramsey told Car and Driver: “They have to build out a ton of inventory ahead of time to allow for people to swap in and out of vehicles. In order for it to make sense, you have to charge a fortune for it.”
Porsche’s subscription service still allows for vehicle swapping and starts at $2100 a month, but its Porsche Drive single-vehicle subscription tier, started last August, accounts for a large percentage of its subscriber business. A Porsche spokesperson attributes the business model’s success to its flexibility, which includes “single-vehicle subscription, multi-vehicle subscription, and rental using the same fleet of vehicles, which offers a range of short-term access to our sports cars.” The program has expanded beyond its initial pilot city of Atlanta to Las Vegas, Los Angeles, Phoenix, and San Diego.
Care by Volvo got off to a rocky start in the summer of 2018, overwhelmed after essentially receiving a year’s worth of orders in three months. Toss in some regulatory issues with the State of New York, and customers were left waiting and wondering when their vehicle would arrive. The automaker says it eventually caught up with demand before the fall and adjusted how the subscription service works to appease both regulators and retailers. Since then, it’s been doing quite well.
Care by Volvo head Peter Wexler told Car and Driver that the service is currently experiencing double-digit growth month over month coming out of pandemic lockdowns, perhaps because the program is structured like a smartphone purchase: People buy a phone on an installment plan and at some point swap it out for a new phone. “It’s not like you switch [phone] models back and forth,” Wexler said. “A newer model comes out and you upgrade on your terms.”
Audi
Ease of use is also a selling point. Signing up has been optimized both online and at dealerships to determine eligibility within minutes. Plus, the single-vehicle option offers the all-inclusive cost without the high prices of a feature that might not be what customers want in the long run.
“At the start, customers enjoy changing the car,” Mercedes’s Adam Chamberlain told Automotive News last July, as the automaker shut down its own car-subscription service. “After a certain period of time, that sort of gets old and they want to leave their car with their stuff in it.”
But don’t count out some that have retreated from subscription programs. Cadillac is likely to restart its Book by Cadillac subscription plans at some point, although its signup page does point to an early 2020 reboot that hasn’t occurred. And a BMW spokesperson told Car and Driver that Access by BMW, launched in 2018 in Nashville, was “always intended to be a pilot program” but said the company is working on “the next iteration,” details of which aren’t yet available. How it’ll differ from the automaker’s last service is unknown, but don’t surprised if at some point you can subscribe to a 3-series for a few years without the ability to swap it out for an X3.
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