Genesis GV80 Coupe (motor1.com)
Genesis provides complimentary access to telematics services, bucking the subscription-based trend in the auto industry. The move aims at boosting customer satisfaction and addresses consumer resistance to recurring charges.
Genesis, the South Korean luxury car brand, has made a notable departure from the automotive industry’s subscription trend by offering free and unlimited access to its telematics suite, Genesis Connected Services, for owners and lessees of 2023 and newer model-year vehicles. This suite includes various features related to safety, maintenance, convenience, and remote services. The shift towards this consumer-friendly model is seen as an effort to enhance customer satisfaction and loyalty. Previously, Genesis had provided these services for free during the first three years of ownership.
This move from Genesis aligns with changing consumer sentiments, as more buyers express reluctance to pay recurring subscription fees for individual vehicle features. It acknowledges that first-time owners, in particular, may be hesitant to commit to additional subscription costs immediately after purchasing a vehicle.
In contrast, some automakers have faced challenges selling feature subscriptions to their customers. A case in point is BMW’s recent decision to eliminate subscription fees for heated seats, which highlights the complexities and consumer resistance associated with such offerings. Pieter Nota, BMW’s board member for sales and marketing, acknowledged that “user acceptance isn’t that high” for certain subscription services. Customers may feel that they are being charged twice—first during the initial purchase and again for subscription features.
Recent studies show that consumers are open to subscription models for specific features that genuinely enhance their driving experience. According to an S&P Global Mobility study, consumers express a strong desire for advanced navigation and driver-assist systems. Moreover, a Cox Automotive study revealed that over half of respondents viewed subscription services as beneficial only if they led to a lower upfront vehicle price.
These findings emphasize the delicate balance that automakers must strike when taking into consideration subscription-based models. While certain features can genuinely enhance value and convenience, others may be perceived as unnecessary add-ons that inflate the cost of vehicle ownership.