Latest in Gear

Image credit: Roberto Baldwin/Engadget

Mercedes halts its car subscription service after lackluster demand

Not everyone wants to pay hundreds a month to switch cars.
Jon Fingas, @jonfingas
June 29, 2020
112 Shares
Share
Tweet
Share

Sponsored Links

2020 Mercedes-Benz GLE
Roberto Baldwin/Engadget

Mercedes-Benz is learning how difficult car subscription services can be. Automotive News reports (via The Verge) that Mercedes has halted its Collection subscription pilot after modest uptake. The company had hoped to expand the drive-what-you-want service if demand had surged, but the interest was “just OK,” according to sales chief Adam Chamberlain. He didn’t say how profitable Collection was, but it only ever reached Atlanta, Nashville and Philadelphia.

The offering was supposed to draw in younger buyers (Mercedes’ average US buying age is 55) who were enticed by the tri-star brand, but didn’t the burdens and limitations of ownership. You could hop from a sedan to an SUV on demand with full insurance, maintenance and roadside help. In that way, it succeeded — Chamberlain noted that the average subscriber was closer to 45.

There were problems, though. Chamberlain noted that the novelty of switching cars became a hassle for some customers as they were tired of constantly switching personal items between cars. The service could easily become too costly to run without frequent swaps. Companies may need to offer cars as short-term rentals and loaners for this to make sense.

This doesn’t mean the trial run was a waste. The company has a “mountain of data” that could help it tailor sales and services to a younger crowd, Chamberlain said. However, it does suggest that car subscriptions aren’t guaranteed to be hits. It may depend on having a brand where car swaps make more sense, like Porsche, or following a Volvo-style single vehicle approach.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
112 Shares
Share
Tweet
Share

Popular on Engadget

Engadget's 2020 Back-to-School Guide

Engadget's 2020 Back-to-School Guide

View
Google brings dark mode to Docs, Sheets and Slides on Android

Google brings dark mode to Docs, Sheets and Slides on Android

View
Crypto scammers hack Elon Musk, Biden, Obama, and Kanye on Twitter

Crypto scammers hack Elon Musk, Biden, Obama, and Kanye on Twitter

View
Facebook envisions using holographics for super-slim VR glasses

Facebook envisions using holographics for super-slim VR glasses

View
Xiaomi dives into Android TV dongles with a 1080p-capable Mi TV Stick

Xiaomi dives into Android TV dongles with a 1080p-capable Mi TV Stick

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr