BMW Suffers A Major Loss Over Heated Seat Subscription

"People feel that they paid double - which was actually not true, but perception is reality, I always say. So that was the reason we stopped that," added Nota. The story of the South Korean heated seat subscription illustrates his point well.

At the time that story broke, buyers could purchase the option of heated seats in the traditional way - speccing them on the order sheet - and this would cost the equivalent of $409.33, while subscribing would cost $18 per month.

Thus, if yourBMW 3 Serieshad the subscription (and assuming monthly pricing didn't change during your ownership), heated seats would cost you $648 over three years and over $1,000 over five years. But who would subscribe for heated seats all-year round? Nobody. If you only paid $54 for the three coldest months of the year, it would take nearly a decade for you to lose money.

However, the subscription model is not going away, and again, it's because of customer perception. For certain services and features, buyers are more than willing to pay a monthly fee.

"What we find is software-based services, like downloading a parking assist product, [are] very well accepted," said Nota. "People know it's a certain piece of software they can download that costs money. It's the same as downloading a film or an extra feature on an app. That is accepted and we do that increasingly successfully."

BMW has previously said that it willnot include performance upgradesas part of its subscription model, whileHonda will not charge extra for safety。It seems that automakers have failed to convince buyers that subscription models for hardware are a good idea, but given how many times other sorts of subscription-based automotive services have come and gone,including from BMW, who knows what the future holds?