BMW, Mercedes to test subscription services in U.S.

DETROIT -- Luxury rivals Mercedes-Benz and BMW are preparing to launch vehicle subscription pilots in the U.S. in 2018.

Mercedes will offer a pilot in a U.S. market this year to help it figure out whether a subscription model has long-term merit, Mercedes-Benz global sales chief Britta Seeger told Automotive News.

"We need to learn," Seeger said Monday at the Detroit auto show. "In different markets, we want to try this out."

BMW "most likely" is going to test a subscription model at some point this year in a single market in the U.S., BMW of North America CEO Bernhard Kuhnt said in an interview at the auto show.

"We are in the phase of looking at it and evaluating together with BMW Financial Services," Kuhnt said. "And if we are going to do it, we are going to pilot it first to learn more about it."

BMW and Mercedes would join other brands such as Cadillac, Porsche, Volvo and Lincoln in testing vehicle subscription services.

Subscription plans generally offer customers a vehicle to drive for a monthly fee that includes insurance, maintenance and pickup and delivery. Customers typically can switch among available vehicles based on needs.

Mercedes must better understand what Seeger calls a "big threat" to the subscription model: What happens if customers don't get to switch to the vehicles they want?

"On the weekend, if it's sunshine outside and if everybody wants to have a cabriolet, and if I apply five times to have a cabriolet and I don't get it, what does this cause?" Seeger said.

Mercedes-Benz hasn't determined where in the U.S. it will pilot the program and when, Seeger said. The automaker has active subscription pilots operating in other countries, she said, citing a Smart-brand program in Italy and a Mercedes-brand program in Germany.

BMW also hasn't determined details of its pilot, Kuhnt said. The company is in talks with organizations with experience in subscription plans to determine the best offer to develop for consumers.

"At the end of the day, the consumer is going to decide if that's something they want to do," Kuhnt said.