California could close down Standard car subscription facilities
California rules and regulators have thrown an investigation of a pioneering Volvo suite that many industry witnesses have forecast could usher in major changes in the way Americans purchase new vehicles. The program, called Care by Volvo, allows motorists to subscribe to one of several models. The idea is similar to a lease, but it packages in insurance, maintenance, and other fees. Some of the people in California cranky that the disrupts franchise and customer protection rules. Any reproach by the DMV, industry viewers warn, could loom Volvo’s processes away, as well as the subscription services happening by rivals such as Porsche and Mercedes-Benz.
The subscription programs were successful in being the way to purchase a car, said Mr. Joe Phillippi, head of Auto Trends Consulting. Each subscription program has its exclusive guidelines. With Care by Volvo, e.g., motorists select one of the two different models at flat price of about US$750. User can change to another model in the 2nd year. The Porsche Passport program enhances a twist, letting subscribers choose between different models, at any time they choose. During the week, e.g., the customer might want to drive a Panamera sedan, swapping to a 911 sports car, or a Cayenne SUV, over the vacation.
The automakers launched the subscription services have tried to make it just like subscribing to a magazine, and have wanted they could keep those purchasers in the family forever, said Mr. Phillippi. By contrast, it is not unusual for a brand to drop half its customers when they trade-in on a conventional retail lease or purchase. While automakers are unwilling to reveal proprietary data, they claim buyer satisfaction with subscription services has been high. Then the California investigation demonstrations that the dealers are far fewer pleased.