ATLANTA -- Mercedes-Benz will launch its vehicle subscription program in Nashville and Philadelphia, setting up a head-to-head fight with BMW as the luxury rivals try out a new type of relationship with their customers. The pilot, which starts in June, will be operated in partnership with Mercedes-Benz dealers in the two cities.
BMW also is using Nashville as the test market for a subscription plan. It will start making deliveries there next month.
The pilot, called the Mercedes-Benz Collection, is being jointly launched by the brand’s sales and marketing arm, Mercedes-Benz USA, and its financial arm, Mercedes-Benz Financial Services USA. It will offer multiple subscription tiers in each location and allow customers to frequently switch vehicles depending on needs or preference.
The company isn't yet disclosing the number of tiers being offered or pricing, but it said the monthly fee will include insurance, roadside assistance and vehicle maintenance. Each tier will offer a broad array of Mercedes-Benz vehicles and allow access to high-performance Mercedes-AMG models. BMW's program starts at $2,000 a month, with a tier that includes high-performance cars costing $3,700.
"It's going to be very interesting to find out and learn more," Mercedes-Benz USA CEO Dietmar Exler told Automotive News at the New York auto show in late March. "We are very optimistic."
Subscribers will have unlimited access to vehicles within their tier and no mileage limitations. They will request vehicle exchanges and other actions through a smartphone app. The cars will be delivered via a concierge service.
"Dealers will play an integral role," Mercedes spokeswoman Donna Boland said in an email, "including delivering the vehicles, being the customer-facing subject matter expert, storing the vehicles and doing warranty work and maintenance."
Mercedes declined to say whether it is working with a technology partner on the app. Several dealership groups and automakers are partnering with Clutch Technologies in Atlanta. The automaker plans to share more details about Mercedes-Benz Collection in the coming weeks, Boland said.
Cadillac and Porsche are among the other luxury brands experimenting with subscription programs.