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Car subscription services: A slow, expensive start — but the potential is huge

Americans are used to paying for subscriptions — to magazines and cable television, for instance — but experience shows they'll cancel when the price of admission gets too high, or there are more tempting alternatives. Cord cutters ditched nearly 1.5 million pay-TV subscriptions in 2017, according to a survey by Leichtman Research Group. Cable TV started out cheap with basic offerings, and then got expensive. The auto industry's subscription offerings are new, but they're starting out costly, and not price-competitive with traditional leasing. The upside is that they take the hassle out of car ownership for busy people by letting the service take care of maintenance, insurance, licensing and taxes. And they give consumers choice, often allowing relatively painless switches between different cars in the automakers' lineup. Subscription services also point the way toward an ownership-free auto experience, and offer an easy transition to a potential world where ride- and car-sharing will be dominant. Subscriptions are here to stay, but consumers may take a while to "get" them. Lincoln's subscription service for lightly used 2015 to 2017 models, offered through the Ford-owned Canvas beginning this year, got off to a slow start. Many early subscribers canceled. Last month, Cadillac announced it would " temporarily pause" its $1,800-per-month Book subscription service for "adjustments" as of December 1. According to the Wall Street Journal, "Snags with the back-end technology used to support the service made some customer-service functions tedious and time-consuming, adding costs for the company." The challenge for automakers is to come up with a strategy that offers consumers a compelling, affordable option to regular ownership, and one that can also make a profit. I think they'll find that sweet spot, but they're not there yet. Jack Nerad, former executive editorial director at Kelley Blue Book and author of " The Complete Idiot's Guide to Buying or Leasing a Car," points out that "A lot of people expected that subscriptions would be very valuable for people who wanted inexpensive transportation, but the reality is quite the opposite. Subscriptions are offering more choices for the wealthy.

BMW bringing two new concepts to Pebble Beach

BMW has announced that it will reveal not one, but two new concept cars during Monterey Car Week next month. The Bavarian automaker released this teaser image in conjunction with the announcement, showing what looks like a rather racy steering wheel to suggest that at least one of those concepts will be focused on performance. The signature red and blue stitching on the wheel and the participation of the M division's R&D chief in the press conference also hint at its nature. We're intrigued, though, by some of the buttons on the wheel with labels like "Flash," "Cool," and "PSL." The Roundel marque has been known to create concept cars to showcase at classic car concours, but they're more often presented at the Concorso d'Eleganza Villa d'Este that BMW has supported for over a decade on the shores of Italy's picturesque Lake Como. That's where BMW revealed in recent years the 3.0 CSL Hommage, the Pininfarina Gran Lusso, and the Zagato Coupe concepts (to name just a few). It did, however, follow up on the latter with Zagato Roadster concept at Pebble Beach that same year. We might project that at least one of the concepts would represent another brand affiliated with BMW – like Mini, Rolls-Royce, or BMW Motorrad. However the announcement below seems to indicate fairly clearly that they'll both be "concept cars" (not bikes), and that they'll be presenting the BMW brand itself (not another from the group). The show cars are also likely to veer more toward the design-study end of the spectrum than previewing any specific upcoming production models, and we wouldn't be surprised if the two arrived as a matching pair of sorts. BMW's California-based Designworks studio is also likely to have played a key role in at least one of the projects. But to find out more, we'll have to wait for the press conference on August 13 in the BMW Villa at Pebble Beach. The concepts will subsequently make the rounds of key Monterey events, including The Quail, the Legends of the Autobahn Concours d'Elegance, the Rolex Monterey Motorsport Reunion, and of course the headline Pebble Beach Concours d'Elegance. BMW to Unveil Two World Premier Concept Cars During Monterey Car Week. Media Preview at The BMW Annual Press Conference on Thursday Evening. Woodcliff Lake, N.J. – July 17, 2015... BMW is pleased to invite credentialed media to the 'BMW at the 2015 Monterey Car Week' preview press conference on August 13th at 6:00pm.

BMW considering North American engine plant?

BMW may be set to expand its US operations with a new engine plant, Bloomberg reports. The Bavarian automaker already has its Spartanburg, SC factory which builds the company's X3, X5 and X6 crossovers. According to the story, Mexico is also under consideration for the BMW engine factory, with the report claiming a final decision will be made in 2014.
"Establishing local motor manufacturing abroad is more complex than assembling cars, but it's a logical step for them to eventually start making engines in markets where they're expanding vehicle production," Juergen Pieper, an analyst for Bankhaus Metzler tells Bloomberg. Building engines in the US or Mexico would save BMW from having to ship engines for some of its most popular models across the Atlantic.
BMW, for its part, hasn't said anything concrete. Spokesman Mathias Schmidt is quoted in the story saying, "As part of our long-term growth strategy, we're frequently looking at different countries for possible locations of future production facilities. No decisions have been made yet, though, for an additional plant."