This year, Mercedes-Benz launched its vehicle subscription service with a shocking sticker price. Starting at $1,095 per month, Mercedes undercut by half similar programs from BMW and Porsche.
It didn't take long for the competition to catch up.
BMW on Monday said it is offering a new tier in its program that lets members switch out vehicles for a monthly fee.
With its new Icon tier priced at $1,099, BMW essentially matches Mercedes-Benz's entry-level plan. The new tier provides access to several models including 330i, 330e iPerformance plug-in hybrid, X3, X2, M240i convertible and the full-electric BMW i3.
BMW also slashed the price of its two other tiers to $1,399 (from $2,000) and $2,699 (from $3,700).
This year, BMW launched its pilot subscription program at a Sonic Automotive store in Nashville. Mercedes is piloting its program in Nashville and Philadelphia.
Automakers are experimenting with subscription programs in a nod to changing realities. Rapid technological advancement, coupled with the emergence of affordable and abundant ride-hailing services, has pressured the traditional car-ownership model.
Instead of forcing consumers to buy one vehicle for every driving need, subscription programs let customers select vehicles for specific occasions -- an SUV or crossover when extended family is in town, a convertible for a weekend getaway or a compact for the downtown commute.
The price war was expected.
"As we see more and more subscription plans released, you're going to see lower and lower price points," Akshay Anand, executive analyst for Kelley Blue Book, told Automotive News in June.
