BMW pilots auto subscription program

Model lets drivers constantly trade for new rides; top-tier service costs $3,700 a month

By Bloomberg News

Apr 4, 2018 @ 5:10 pm EST

Bloomberg

BMW's new U.S. subscription pilot will put drivers into the brand's top performance cars for as much as $3,700 a month as the German automaker tests a new ownership model with its most exclusive customers.

The app-based service — which begins in Nashville, Tenn., this week — provides members with unlimited access to a fleet of BMWs for a set monthly fee. The pricier "M" tier puts drivers behind the wheels of sports cars like the M5, which retails for more than $100,000, while the $2,000-a-month version lets subscribers summon top-selling models like the X5 SUV, 5 Series sedan and plug-in hybrid versions of both.

"The reason why we went with the upper tier, especially the 'M' tier, is we think we can learn an awful lot more with that clientele," said Ian Smith, CEO of BMW Group Financial Services in the Americas, which is running the pilot. "This is about learning and ensuring with our dealer partners that we're building a business model that's sustainable for the longer term and not something that's going to be a fad for this year."

The Access by BMW pilot follows in the footsteps of General Motors Co.'s Cadillac, which started its Book subscription service in January 2017, and Porsche, which launched a pilot last October that combines lease, insurance and maintenance into one monthly payment.

By allowing subscribers to swap cars with the push of a button, BMW is trying to appeal to consumers whose shopping and transportation habits have been shaped by Silicon Valley giants like Uber Technologies Inc. and Airbnb Inc.

The $3,700 price tag for the top tier is nearly three times the cost of the monthly lease payments on a 2018 M5 sedan in the Nashville area — though a lease requires a total upfront payment of $5,724. The monthly subscription price also includes vehicle maintenance, insurance and roadside assistance.

If the Nashville pilot proves successful, BMW would launch a third, less expensive tier to broaden access to the service, Mr. Smith said.

BMW Financial Services will foot the cost of the pilot and the depreciation risk of the vehicles, while the Nashville dealership will service, clean and deliver cars. Clutch Technologies, which also powers Porsche's Passport subscription pilot, is running the mobile app and predictive analytics to enable the service.

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