11 Jun 18

Mercedes-Benz USA launches competitive vehicle subscription service

Mercedes-Benz has launched a vehicle subscription service in Nashville which starts at approximately half the price of similar programs being offered by BMW and Porsche.

Subscription programs let customers select vehicles for specific occasions (e.g. SUV during holidays when family is in town, a sports car for a weekend getaway or a compact for downtown commute)

The program, deemed Mercedes-Benz Collection, gives subscribers access to 30 different models for a monthly fee, which includes insurance, 24/7 roadside assistance and vehicle maintenance, news portal Automotive News reported.

"It allows our customers to drive different vehicles for different occasions, providing the luxury of having the right car at the right time," Mercedes-Benz USA CEO Dietmar Exler was quoted as saying in the report.

Following a one-time activation fee of $495, the program is offered in three tiers, being Signature, Reserve and Premier. While subscriptions range from $1,095-$2,995 a month, competitors BMW charges $2,000-$3,700 and Porsche $2,000-$3,000. Cadillac also has a single-tier program which costs $1,800 a month.

Mercedes-Benz A180d at Geneva Motor Show 2018 (Source: Commons) 

Subscribers use a smartphone app to access a vehicle within their tier with no mileage limitations. Vehicles are delivered by a concierge service, the report said.

Atlanta-based Clutch Technologies has developed a mobile app for this and other subscription programs. It uses predictive analytics to help the automakers plan vehicle inventory and mix as well as algorithms to recommend new vehicles to members based on their usage pattern.

Mercedes, which foresees members changing vehicles two to three times a month, expects the program to reach profitability in 12-18 months as it fine-tunes its business model and optimizes the number of vehicles in its fleet.


Authored by: Daniel Bland