From 2022, the “Heart of Future Mobility Delivered by LG Electronics” will be published under the new title of “Mobility Insight”
│ Subscription services to receive various goods
Subscription services allow us to receive a variety of goods and services, both intangible and tangible products such as newsletters, OTT services, apps, food, and flowers. As this subscription service is rising and reaching millions of customers, automobile-related industries are now entering the market as well to meet the demands and needs of customers. Today, we will dive deeper into automobile-related subscription services.
│ Ultra Cruise function is able to respond to 95% of all driving-related situations (Source: GM Korea website)
The first subscription service that can be enjoyed in cars is related to driver convenience. For example, American car manufacturer General Motors (GM) revealed its “Ultra Cruise” function, which it aims to release in 2023. Ultra Cruise will allow drivers to drive “hands-free” as it is able to respond to over 95% of all situations on the road. GM plans to provide this function on a paid subscription basis.
On October 6, 2021, CEO Mary Barra of GM announced that the company had developed its own platform incorporating driving convenience functions, thereby transforming from a car manufacturer to a platform business. This implies the company’s intent to go beyond the manufacturing industry and grow into a service and IT company. Barra explained that GM’s subscription service will allow customers to pay a monthly subscription fee to be able to use AI-based navigation and self-driving software, applying models similar to that of Netflix and Spotify.
│ BMW Korea’s subscription-based car maintenance service, BMW ServiceCare+ (Source: BMW Korea website)
The second subscription service for cars is a total care service, which provides automobile servicing and care as a comprehensive subscription-based service. For example, BMW Korea plans to fully develop its ServiceCare+ service by 2022 to allow for the full application of contact-free and digital after-sales services.
Owners of cars outside of the warranty period can also receive repair and maintenance services through the subscription program for after-sale services. During the subscription period, customers can enjoy a robust range of services such as free automobile inspections, repair or replacement of consumable components, pick-up and delivery, airport shuttles, and parking on vacations.
│ BMW’s ServiceCare+ provides various services including simple car repair to airport pick-up (Source: BMW Korea website)
This new method is convenient for customers and beneficial to BMW as well. The use of its maintenance service accumulates customer data, which enables user-customized services and the development of various products to be optimized to customer preferences. Having this database would give BMW the ability to identify subscriptions that are popular among users of different ages, genders, regions, and time zones, as well as subscriptions that need improvement.
│ Hyundai Motors’ Hyundai Selection service allows users to subscribe to a car by paying a subscription fee (Source: Hyundai Motors website)
Cars are expensive to purchase and replace. As such, it is difficult to choose and drive a variety of cars, even for a test drive. What if there was a subscription that would allow you to select a car of your choice for a period of your choosing? A vehicle subscription service can make this easier since it allows users to freely choose from a variety of cars as desired. A monthly subscription fee could eliminate maintenance costs such as repairs and taxes for the user. In this regard, car subscription services are becoming more diversified with the efforts of the auto industry to satisfy the needs of consumers who want a more diverse experience.
│ Volvo’s monthly car subscription service, Care by Volvo (Source: Volvo’s YouTube channel)
Monthly-based car subscription services are being announced by numerous companies, including Porsche, Mercedes-Benz, BMW, Audi, Ford, Volvo, and Hyundai Motors. Amongst these different companies, Volvo stands out the most with its recent announcement to commit 50% of its new automobiles to its subscription services by 2025.
Car subscription services are evolving from the simple provision of cars into a curated service that reflects consumers’ personal tastes. By analyzing each customer’s records, these subscription services will be able to suggest products that the consumer is sure to love and provide an expertly-curated service to cater to their preferences.
According to McKinsey, the subscription market has been growing at an annual rate of 100% over the past five years, demonstrating that it is able to maintain its course of success.
│ Hyundai Motors’ first ride-pooling service in Korea, Shucle (Source: HMG Journal)
Car subscription services are spreading from personal vehicles to public transport. An example of this is ride-pooling services, which create set routines based on user demand and transport consumers to their destinations like a shuttle bus. In Korea, Hyundai Motors was the first to launch such a service through its ride-pooling service, “Shucle”; a combination of the terms “shuttle” and “circle.” Shucle is a demand-based subscription service that passengers can use whenever they desire to move from one location to the next. In other words, this particular service allows multiple passengers who pay a subscription fee to hire a bus that operates on their desired route.
│ LG Electronics’ automobile display provides various driving-related information in the Cadillac Escalade
As shown above, there are a wide variety of subscription services that drivers can use in their cars. Currently, LG Electronics is developing a new and unprecedented driver convenience and software service that is being installed in many modern vehicles. One day, you might run into LG Electronics services when signing up for a car subscription service. Expect LG Electronics in a number of new places in the near future.
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