The Book by Cadillac vehicle subscription service had skittered along for more than a year when General Motors executives shuttered the venture in November. Few customers bit at the service's $1,800 per month price.
Volvo's fledgling subscription service, Care by Volvo, is seemingly more popular with consumers, though company officials decline to provide enrollment figures. But Volvo's U.S. dealers have rebelled. In a petition filed in January with the California New Motor Vehicle Board, dealers claim that the service violates franchise laws intended to stop manufacturers from competing with retailers.
Suffice it to say vehicle subscription services have gotten off to a rocky start.
Despite the early stumbles, the programs aren't going away. Ford, Audi, Mercedes-Benz and BMW, for example, offer varying formats that combine vehicle payments, maintenance and insurance and allow customers varying numbers of vehicle swaps. Some dealers and other third parties have started their own offerings.
Cadillac plans to launch a recalibrated Book this spring, and Volvo executives have promised a Care by Volvo 2.0 this year that addresses dealer concerns.
Details on these overhauls remain vague, but when they come, industry experts say dealers shouldn't necessarily assume the worst or make knee-jerk attempts to thwart them. In a world where mobility no longer automatically equates to vehicle ownership, dealers who innovate might be front-runners if and when car-sharing and other alternatives become more widespread.
"There's a lot of concern about the future of retailing with subscriptions, mobility services and autonomous vehicles," says Simon Bradley, global practice director at Urban Science. "How do they have a network to address those needs? How do they evolve for the future?"
His answer might surprise some.
Change the law
Dealers have been stalwart defenders of franchise laws, but "dealers who innovate ... in the long term will be the winners," Bradley said. "Those laws have been in place for over a century and refined and tempered, so it'll be an evolution of those laws to permit some activities."