Mercedes-Benz is suspending its subscription service for two years after mediocre sales, Automotive News reports.
Mercedes-Benz USA head of sales Adam Chamberlain described the service as a learning experience that would have expanded if sales were better. “If the demand had been incredible, then it could have gone further,” Chamberlain said. Automotive News last week. “But the demand was fine, so we kept it up.”
Mercedes-Benz first launched its Collection subscription service in Atlanta in 2018 with the goal of attracting customers who want access to a fleet of elegant cars but don’t necessarily want one. The program offered subscribers access to 30 models for a monthly fee, which included insurance, 24/7 roadside assistance, and vehicle maintenance.
But Collection never expanded beyond the initial pilot cities of Philadelphia, Atlanta, and Nashville. The service attracted a few hundred customers, and Mercedes executives expected it to make a profit in the first 12 to 18 months, Automotive News reports. The pilot program will end July 31, a spokesman said.
“From the beginning, the Mercedes-Benz Collection was designed to be a pilot program; an experiment for us to learn about the luxury automotive underwriting market and its customers, “Mercedes said in a statement.” After two years in operation, the pilot program has run its course and now is the time to launch the Collection MB. The information and experience we have gained through the pilot about our customers and the subscription business model have been invaluable and can be applied to future initiatives. “
The Mercedes Collection consisted of three levels: Signature for $ 1,095 per month, Reserve for $ 1,595 per month and Premiere for $ 2,995 per month. A one-time fee of $ 495 is also required. As of February 2020, Mercedes was still trying to boost sales by adding a new tier consisting of the automaker’s high-performance AMG models.
But Mercedes does not leave empty-handed. Chamberlain told him Automotive News that the automaker was able to collect “a mountain of data” from its subscribers, many of whom were, on average, 10 years younger than the automaker’s typical customers. This will help the auto company better target millennial car buyers in the future, he said.
Subscriptions have been a mixed bag for the auto industry. Ford retired from service last fall after low demand. Cadillac closed its Service Book in 2018, only to resurrect it several months later with fewer options.
Other automakers have had some success. BMW, Porsche, Audi, Volvo, Nissan and Jaguar still offer some variation of a subscription service. Even the big car rental companies, Hertz and Enterprise, are taking part in the action. Most of these subscriptions are only available in specific cities and are still in the pilot phase.
Update June 29, 11:41 am ET: Updated to include a statement from Mercedes-Benz.
