Mercedes-Benz has launched a major new car subscription programme in the US offering packages from just $1,095 a month.
There are three tiers in the Mercedes-Benz Collection service - Signature, Reserve and Premier - with the highest priced package costing $2,995 per month.
The service is a collaboration between Mercedes-Benz USA, Mercedes-Benz Financial Services USA and Mercedes-Benz dealers. Currently it covers two pilot cities, Nashville and Philadelphia.
Subscribers pay a one-time activation fee of $495 and may then choose from all the vehicle body styles offered in that subscription tier, including Mercedes-Benz SUVs, sedans, coupes, cabriolets, roadsters and wagon models.
Each tier also allows access to the company's popular high-performance Mercedes-AMG models.
The Mercedes-Benz Collection works through a combination of a new app, which can be downloaded from the Google Play store or Apple App store, and a local dealer-based concierge.
Once subscribed, customers initiate vehicle exchanges, concierge communication and other actions via the app. Concierge staff then manage the delivery process.
Subscribers can access any type of vehicle within their tier with no mileage limitations. The monthly subscription fee for the tier also includes insurance, 24/7 roadside assistance and vehicle maintenance.
To create an account, users provide a credit card and a picture of their driving licence.
After verification and a credit check, typically taking one business day, the subscriber is contacted to find out his or her vehicle needs and desired delivery time and location.
After the first delivery, subscribers put their requests in via the app. Requests received by noon can typically be fulfilled the next day.
The concierge delivers the new vehicle washed, with a full tank of fuel and takes away the previous vehicle.
The system is powered by Clutch Technologies, a US-based software platform that lets the automotive industry offer subscription services to customers.
It is used by an increasing number of manufacturers and dealers, including BMW for its Access car subscription service, which launched this year and starts at $2,000 per month, rising to $3,700 a month.
BMW's standard $2,000 subscription, called ‘Legend’, covers most models, but the more expensive "M" tier gives subscribers access to sports cars including the M5.
Geoff Robinson, vice-president, Mercedes-Benz Financial Services USA (pictured), said: “Customers’ appetites are changing when it comes to how they access products and services, and our financial and mobility services are evolving to fit those demands.
“Adding Mercedes-Benz Collection's subscription services to our product portfolio is a natural fit. We are working to provide one of the most diverse offerings in the market today and expect to learn a lot from this pilot."
The Mercedes-Benz Collection programme is one of several subscription services being trialled around the world. In the UK, Mercedes-Benz has launched a subscription service powered by fintech start-up Drover.
In Germany, Mercedes-Benz Bank is piloting its own car subscription service called Mercedes me Flexperience.
It is based on Mercedes-Benz Rent, the rental offer from Mercedes-Benz Bank, and was developed as a joint project between Daimler Financial Services and Lab1886, the innovation hub of Daimler.
The pilot programme operates with two of Germany’s largest Mercedes-Benz dealers, Beresa and Lueg.
The strategy reflects a global shift in focus towards mobility products among manufacturers and service providers, including leasing companies, as consumer expectations change from ownership models to pay-on-use services.
Volvo has launched a car subscription package, called Care by Volvo, starting with its new XC40.
A number of manufacturers in the US have launched subscription packages. This includes Ford's Canvas, Cadillac’s Book by Cadillac and Porsche Passport.
In the used car market, Fair allows consumers to access vehicles without ownership or contracts through its app-based service.
Leasing companies are also rolling out subscription services, with LeasePlan recently reporting positive take-up for its Subscribe & Drive service in the UK.
Mercedes-Benz has invested heavily in a range of other mobility services, including car2go, the car-sharing service with 3 million members, Croove, an app that allows vehicle owners to rent out their cars when they aren’t being used, taxi ordering app mytaxi and mobility comparison app Moovel.
The BMW Group and Daimler announced this year they were merging their mobility services divisions, giving them a combined reach of up to 40 million current customers.
Each company will hold a 50% stake in a joint-venture comprising both companies’ mobility services.
While the two companies will remain competitors in their respective core businesses, consumers will benefit from their greater combined reach and expansion, along with key customer service elements such as a common platform for bookings and payments.
The move recognises two important criteria for driving the growth of mobility services.
Firstly, scale is a key factor in delivering profitable services and, secondly, customer experience will be critical in encouraging greater levels of use, particularly in removing any potential barriers such as different ecosystems for bookings and managing services.