LOS ANGELES — The Los Angeles Auto Show is the only major U.S. show that isn't overseen by the local dealer association. And this year, it showed, with more automakers promoting alternatives to the basic retail sales model and the American tradition of personal car ownership.
Volvo and Lincoln said they are diving into the business of monthly vehicle subscriptions, which are more flexible than leases, though not necessarily less expensive. Their announcements come on the heels of pilot programs launched this year by Cadillac, Hyundai and Porsche and plans sketched out by Volvo affiliate Polestar and some electric vehicle startups.
The initiatives vary in scale and execution, a sign that although companies are willing to experiment in this area, they haven't yet figured out which model will work best with consumers, how to measure their success and whether subscriptions are ultimately good for business. Also unclear is what role local dealers would play if these programs expand beyond small pilot projects.
In the near term, though, the programs promise a wealth of data about consumer preferences and a modest revenue stream to support other initiatives under the broad umbrella of mobility services.
"Automakers are experimenting with a lot of different models to see what customers will accept or want and how much they are willing to pay for it," said Sam Abuelsamid, a senior analyst at Navigant Research. "The thing about all of these plans is that for the OEM, by bundling, if they price it right, they can also build in some revenue to fund things like ongoing support for software and map updates. While this isn't a big thing today, going forward, it will be more important."