Mercedes-Benz launched its vehicle subscription service on Tuesday, taking on Porsche, BMW and Cadillac with a lower monthly price.
The program, Mercedes-Benz Collection, gives subscribers access to 30 model variants for a monthly fee. Mercedes-Benz USA and the brand's financial arm, Mercedes-Benz Financial Services USA, jointly launched the two-year pilot in Nashville and Philadelphia.
The subscription program allows "our customers to drive different vehicles for different occasions," Mercedes-Benz USA CEO Dietmar Exler told Automotive News. "It provides the luxury of having the right car at the right time."
Automakers are experimenting with subscription programs in a nod to changing realities. Rapid technological advancement in the auto industry, coupled with the emergence of affordable and abundant ride-hailing and ride-sharing services, has put pressure on the historical car-ownership model.
Instead of forcing consumers to buy one vehicle that (often poorly) attempts to meet every driving need, subscription programs allow customers to pick the vehicle for the need -- an SUV for when extended family is in town; a convertible for a weekend getaway; and a compact for the downtown commute.
Mercedes-Benz's subscription program will have three tiers -- Signature, Reserve and Premier -- with prices ranging from $1,095 to $2,995 per month. In comparison, BMW's program -- which has also picked Nashville for a pilot -- ranges from $2,000 to $3,700 a month, while Porsche's service ranges from $2,000 to $3,000 a month. Cadillac's single-tier program costs $1,800 a month with a $500 initiation.
Mercedes-Benz Collection subscribers pay a onetime activation fee of $495 and can choose from SUVs, crossovers, sedans, coupes, cabriolets, roadsters and wagon models. Each tier also allows access to the company's high-performance Mercedes-AMG models.
Subscribers can access, via a smartphone app, any type of vehicle within their tier with no mileage limitations. The cars will be delivered via a concierge service. The monthly subscription fee includes insurance, 24/7 roadside assistance and vehicle maintenance.