Mercedes-Benz is suspending its two-year-old subscription service after mediocre gross sales, Automotive News reports.
Mercedes-Benz USA head of gross sales Adam Chamberlain described the service as a studying expertise that may have been expanded if gross sales had been higher. “If the demand would have been unbelievable, then it could have gone further,” Chamberlain advised Automotive News final week. “But demand was just OK, so we kept it.”
Mercedes-Benz first rolled out its Collection subscription service in Atlanta in 2018 with the purpose of interesting to prospects who wish to have entry to a fleet of fancy automobiles however don’t essentially wish to personal one. The program supplied subscribers entry to 30 fashions for a month-to-month payment, which included insurance coverage, 24/7 roadside help, and car upkeep.
But Collection by no means expanded past the preliminary pilot cities of Philadelphia, Atlanta, and Nashville. The service drew just a few hundred prospects, and Mercedes executives had anticipated it to show a revenue within the first 12 to 18 months, Auto News studies. The pilot program will finish July 31st, a spokesperson mentioned.
“From the beginning, Mercedes-Benz Collection was designed to be a pilot program; an experiment for us to learn about the luxury automotive subscription marketplace and its customers,” Mercedes mentioned in a press release. “After two years in operation, the pilot program has run its course and it is now time to sunset the MB Collection. The information and experience we’ve gained through the pilot about our customers and the subscription business model have been invaluable and may be applied for future initiatives.”
Mercedes’ Collection consisted of three tiers: Signature for $1,095 a month, Reserve for $1,595 a month, and Premiere for $2,995 a month. A one-time $495 becoming a member of payment can also be required. As of February 2020, Mercedes was nonetheless attempting to juice gross sales by including a brand new tier consisting of the automaker’s high-performance AMG fashions.
But Mercedes isn’t strolling away empty-handed. Chamberlain advised Auto News that the automaker was capable of acquire “a mountain of data” on its subscribers, a lot of whom had been, on common, 10 years youthful than the automaker’s typical prospects. This will assist the automotive firm’s higher goal millennial-aged automotive consumers sooner or later, he mentioned.
Subscriptions have been a combined bag for the auto business. Ford walked away from its service final fall following low demand. Cadillac shut down its service Book in 2018, solely to resurrect it a number of months later with fewer choices.
Other automakers have had some success. BMW, Porsche, Audi, Volvo, Nissan, and Jaguar are nonetheless providing some variation of a subscription service. Even the large automotive rental firms, Hertz and Enterprise, are getting in on the motion. Most of those subscriptions are solely obtainable in particular cities and are nonetheless within the pilot part.
Update June 29th, 11:41AM ET: Updated to incorporate a press release from Mercedes-Benz.