Automakers are just beginning to figure out how to turn used car owners into subscribers. Today, most of them reach used car owners either when someone buys a used car through an authorized dealer (about a third do so in the US) or when that new owner searches for their app. (Automakers also communicate with owners in the event of recalls, through highly structured contact with local motor vehicle departments.)
GM spokeswoman Anna Yu declined to share specific numbers for subscribers who drive used cars, but says that “other owners are some of our most loyal customers” — mostly because they’ve proactively reached out to ask about subscription-based products like OnStar or Super Cruise, an assist feature. advanced driver.
Cariad’s Bensel says the VW-owned company is able to push “highly targeted digital campaigns” — that is, ads — directly onto drivers’ dashboards or apps. Contact is now in some new and latest Used cars, he says, also allow Cariad to pull data that helps VW “better understand the use of our cars as well as customers’ needs over a lifetime.” In other words, more data means that perhaps automakers can build better products that appeal to drivers of new and used cars — and potentially help tune in to those digital ads, too.
Used car drivers to whom automakers have a direct line—whether by email or app—are often offered free trial periods intended to hook the consumer into the subscription model of car ownership. But many used car drivers are not easily targeted, especially those who do not buy their cars through networks controlled by car dealers.
A 2021 survey of more than 2,000 U.S. vehicle owners led data and analytics firm LexisNexis Risk Solutions to estimate that 83 percent of owners of used cars with built-in connectivity “remain underutilized” — meaning automakers have left money on the table.
Since 2021, LexisNexis has offered a service called Owner Check that aims to help automakers weed out used car owners. It can link “disparate data sets” to determine when a car has a new owner and, conversely, when a person owns a new car, says Dave Nmtoda, the company’s president of automotive product. The company won’t disclose which automakers use owner screening, but it says the companies that account for 65 percent of the global auto market are either testing or in discussions about the service.
All of these new subscription offerings create a new way for automakers to compete – and position their brand relative to others. Volvo’s executive vice president, Bjorn Annwal, says the company feels it’s unfair to charge extra to simply activate hardware already in the car — “like in a hot seat,” he says — but it’s okay to charge for more complex software. . An example of this might be a parking aid that stitches together images from multiple cameras. “That’s partly market research, but partly it’s just common sense,” he says.
It’s a plausible theory, but like all automakers’ subscription strategies, one that’s largely untested. Ondrej Burkacky, senior partner at automotive software advisory firm McKinsey, says some industry forecasts for subscriber numbers and revenue have proven overly optimistic.
The unanswered question, he says, is: “What are people really going to pay for?” Volkswagen’s Cariad reported an annual loss of $2 billion last year, amid delays in software products, and it’s not the only automaker that has struggled to build user-friendly systems. As these companies’ programs and subscriber drives expand to used-car owners, so does the prospect of dashing their hopes—or really pissing people off.