[TheMaxXHD]

Originally Posted by Bruuuce

So the cost to produce get lower, every car is the same. Thinking that added efficiency on the line...

Then charge for the hardware feature implemented per owner. Life long profits.

I doubt they are not making their money back on the initial purchaser, if they are not, that is bad on them.

Hoping I don't need anything but a cheap commuter from now on, but who knows.

The way subscriptions work from a financial POV is kind of sort of like taxes. Those who do pay more subsidize those who don't. In theory.

[MachinesWithSouls]

Originally Posted by LogicalApex

Not semantics. And, no, not the same!

With a lien the bank has to go through a court process to have the court enforce the lien. That court could actually require that the bank accept new terms and losses and still not actually get ownership of the property or even toss the lien entirely!

A subscription doesn’t require any adjudication by anyone. BMW can decide to raise the price or change the terms at any time and there is no recourse. They could even decide to just cut the feature off period and, again, there is no recourse.

…

I guess it is no surprise you’re OK with it since you aren’t well aware of the differences between a subscription and a loan.

So BMW would delete, let’s say, heated seats as a feature, just because? Even though the hardware is already installed?

They’ve already done this anyway, when support for 3G went away in older cars. I believe they even offered to have the antenna updated. I digress.

You’re going to an extreme here - the bank has more resources than you when it comes to a mortgage. I’d be willing to bet they take your house in the end.

Financing terms can change, I’m sure you’ve heard of variable interest rates. So it’s up to the buyer to read the fine print, whether you lease, finance, or subscribe.

[G30 B58]

Originally Posted by MachinesWithSouls

77% of people lease a bmw.

I refuse to read the article, not because I can't read, I just don't want to but 77%?!?!

LOL

77%!!

[TheMaxXHD]

Originally Posted by MachinesWithSouls

So BMW would delete, let’s say, heated seats as a feature, just because? Even though the hardware is already installed?

They’ve already done this anyway, when support for 3G went away in older cars. I believe they even offered to have the antenna updated. I digress.

You’re going to an extreme here - the bank has more resources than you when it comes to a mortgage. I’d be willing to bet they take your house in the end.

Financing terms can change, I’m sure you’ve heard of variable interest rates. So it’s up to the buyer to read the fine print, whether you lease, finance, or subscribe.

Again, with the heated seats argument. They aren't deleting anything you were entitled to if you didn't pay for it up front. Therefore if you don't pay for the heated seats in the beginning and never pay for the subscription, in theory, the financial loss is on BMW, not you. They are putting a feature into the vehicle that you didn't pay for and never used. In theory, you as the customer make out because you get a lower cost vehicle to start, AND have the option to buy it later if you so chose, without buying a whole new car.

[MachinesWithSouls]

Originally Posted by TheMaxXHD

Again, with the heated seats argument. They aren't deleting anything you were entitled to if you didn't pay for it up front. Therefore if you don't pay for the heated seats in the beginning and never pay for the subscription, in theory, the financial loss is on BMW, not you. They are putting a feature into the vehicle that you didn't pay for and never used.

Indeed, it was a rhetorical question.

[LogicalApex]

My gut on this is that it is driven largely by the EU changing rules on car manufacturers. They are required to submit car crash tests for every configuration of a vehicle and with BMW being option heavy this would create a burden (they’d need to crash test a car with heated seats and one without). So this theoretically lets them limit their configurations and has the added bonus of allowing them to sell options again to used buyers.

It might work in markets like Europe where BMW isn’t always a luxury brand like they are here in the US. After all you can buy a BMW 5 Series with cloth seats in the EU!

I don’t see it working here. I’d see it only making life a lot easier for Genesis and others to win over younger buyers who have less affinity for the brand.

[TheMaxXHD]

Originally Posted by LogicalApex

My gut on this is that it is driven largely by the EU changing rules on car manufacturers. They are required to submit car crash tests for every configuration of a vehicle and with BMW being option heavy this would create a burden (they’d need to crash test a car with heated seats and one without). So this theoretically lets them limit their configurations and has the added bonus of allowing them to sell options again to used buyers.

It might work in markets like Europe where BMW isn’t always a luxury brand like they are here in the US. After all you can buy a BMW 5 Series with cloth seats in the EU!

I don’t see it working here. I’d see it only making life a lot easier for Genesis and others to win over younger buyers who have less affinity for the brand.

The primary financial incentive for BMW (and any car manufacturer), is to profit off of vehicles long after sale (and especially in the used car market, with monthly/yearly subscriptions), by allowing consumers to pay for features the car didn't initially have "paid for" when it was built. Also allows them to charge monthly/yearly, which to unsuspecting consumers, might allow BMW to make more money than they would if they had just bought it outright.

The primary financial incentive for consumers is that it allows flexibility of the consumer in price on sale, allowing for a cheaper vehicle upfront, without needing to worry about not having a feature if they do find themselves wanting it later on. Pay as you go. As of current, the pay for feature at build is anti-consumer because it incentivizes consumers to pay more for something they may not actually ever use much once they try it, and incentivizes consumers to pay for newer vehicles with said features if they didn't get it on build only a few years back.

Those are both under perfect scenarios.

Under not perfect scenarios:

BMW loses money with a low uptake on subscriptions, and therefore lose money on the cars that they put say heated seats in, but the customer never pays to use, whether outright or monthly.

Consumers lose money with the loss of buying outright (or in general increased prices of certain features) or where BMW pockets the money and continues to increase the prices of everything..

It is a delicate balance. It is ripe for pro-consumer innovation and anti-consumer actions.

[LogicalApex]

Originally Posted by MachinesWithSouls

So BMW would delete, let’s say, heated seats as a feature, just because? Even though the hardware is already installed?

They’ve already done this anyway, when support for 3G went away in older cars. I believe they even offered to have the antenna updated. I digress.

You’re going to an extreme here - the bank has more resources than you when it comes to a mortgage. I’d be willing to bet they take your house in the end.

Financing terms can change, I’m sure you’ve heard of variable interest rates. So it’s up to the buyer to read the fine print, whether you lease, finance, or subscribe.

I don’t really care how BMW slices it. I can absolutely assure you that if I’m getting prompted to do a nickel and dime approach for features installed in my car already I’m not buying the car. Full stop.

If I wanted to be on a payment treadmill I’d lease. I don’t.

Originally Posted by TheMaxXHD

The primary financial incentive for BMW (and any car manufacturer), is to profit off of vehicles long after sale (and especially in the used car market, with monthly/yearly subscriptions), by allowing consumers to pay for features the car didn't initially have "paid for" when it was built. Also allows them to charge monthly/yearly, which to unsuspecting consumers, might allow BMW to make more money than they would if they had just bought it outright.

The primary financial incentive for consumers is that it allows flexibility of the consumer in price on sale, allowing for a cheaper vehicle upfront, without needing to worry about not having a feature if they do find themselves wanting it later on. Pay as you go. As of current, the pay for feature at build is anti-consumer because it incentivizes consumers to pay more for something they may not actually ever use much once they try it, and incentivizes consumers to pay for newer vehicles with said features if they didn't get it on build only a few years back.

Those are both under perfect scenarios.

Under not perfect scenarios:

BMW loses money with a low uptake on subscriptions, and therefore lose money on the cars that they put say heated seats in, but the customer never pays to use, whether outright or monthly.

Consumers lose money with the loss of buying outright (or in general increased prices of certain features) or where BMW pockets the money and continues to increase the prices of everything..

It is a delicate balance. It is ripe for pro-consumer innovation and anti-consumer actions.

Does BMW want the sweet nectar of subscription income? Obviously.

Can they tap into it this way? I doubt it. Especially in the US market. As it comes off as scummy for a luxury brand.

Technology has progressed well enough that it is easily doable for a company like Amazon to implement the holy grail of retail pricing, demand based pricing. In a perfect capitalist market the pricing of items would dynamically adjust to align with supply to ensure that there is a direct balance between the sale price and the price the buyer is willing to pay…

Said more clearly… Around Christmas shopping season, like now, when everyone wants a PS5 (or whatever is in vogue these days) and there aren’t enough to meet demand. A retailer should be adjusting their pricing by the item to charge the highest price they can. Got 1 PS5 and 2 people asking to buy it? Raise the price until 1 of them drops out.

Amazon tried that and it was WILDLY unpopular. As a result, you will see pricing stay the same and, instead, items sell out and become unavailable…

It isn’t a good look… And sours the brand enough to negatively impact sales.

[Bruuuce]

pay per use power windows and door locks

[nyalpine90]

that some BULLshiiiit.

pay to have it on the car.
pay to keep it activated???

at this point i will never lease or buy new bmw

[TheMaxXHD]

Originally Posted by Efthreeoh

One question...

What happens when the system under subscription breaks? Does a subscription mean there is an implied perpetual warranty?

Inquiring minds want to know?

Most things that they would potentially make a subscription for, like heated seats, aren't covered under warranty normally anyway. So, not sure there would be much difference.

[LogicalApex]

Originally Posted by TheMaxXHD

Most things that they would potentially make a subscription for, like heated seats, aren't covered under warranty normally anyway. So, not sure there would be much difference.

Huh? Seat heating is absolutely covered under the new car warranty if it was installed on the car at the factory or by a BMW dealership later (not that anyone would pay for a replacement of the seat to add it after the fact).

[TheMaxXHD]

Originally Posted by LogicalApex

Huh? Seat heating is absolutely covered under the new car warranty if it was installed on the car at the factory or by a BMW dealership later (not that anyone would pay for a replacement of the seat to add it after the fact).

Oh, then I don't see why it wouldn't be covered under warranty, subscription or not (though in practice, you would likely need to atleast use it to know if it's broken to begin with).

With that in mind, you might run into issues where you buy the subscription for the first time after the car warranty is up and it doesn't work. That probably won't be covered.

[testing02hwr]

I normally would not engage in commenting on content since it is not my cup of tea, but this article really rubbed me the wrong way.

I am not going to type up a long-winded response since I don't feel like it is worth my time, so I am just going to comment on the conclusion of your article: "BMW costing more for no reason but greed"

Using the numbers in your article, an M3 went from $71,600 to $74,300 ($2,300 from '22 to '23). That is roughly 4% increase (rounding up). PPI YoY (just released Dec 9) is 7.4% which means that BMW likely had an increase in expenses of 7%. Increase in expenses is far from "no reason". It literally is costing more and more money to make these cars.

BMW (or any company for that matter) is not a charity. They are not making cars out of the goodness of their hearts. If you don't like it, you can find a car manufacturer who has miraculously found a way to not increase their MSRPs over the past few years.

[MachinesWithSouls]

Originally Posted by testing02hwr

I normally would not engage in commenting on content since it is not my cup of tea, but this article really rubbed me the wrong way.

I am not going to type up a long-winded response since I don't feel like it is worth my time, so I am just going to comment on the conclusion of your article: "BMW costing more for no reason but greed"

Using the numbers in your article, an M3 went from $71,600 to $74,300 ($2,300 from '22 to '23). That is roughly 4% increase (rounding up). PPI YoY (just released Dec 9) is 7.4% which means that BMW likely had an increase in expenses of 7%. Increase in expenses is far from "no reason". It literally is costing more and more money to make these cars.

BMW (or any company for that matter) is not a charity. They are not making cars out of the goodness of their hearts. If you don't like it, you can find a car manufacturer who has miraculously found a way to not increase their MSRPs over the past few years.

This March, It’ll be 2 years since I had placed an order for my G80 M3. The MSRP was $2,700 less then it is now, plus I received significant money off the sticker price. An Identical M3 today costs about $10k more due to that price rise and the elimination of discounts, and that’s if you’re lucky to pay the actual sticker price. This adds up to more than 7%.

Somewhat related is financing and leasing costs also going up significantly.

You’re correct, BMW isn’t a charity, and costs do go up. But in 2021, BMW reached an all-time high in revenue:
https://www.cnbc.com/amp/2022/03/10/...-shortage.html

Only Ferrari has a higher operating margin:
https://companiesmarketcap.com/autom...rating-margin/

And finally, the average price of a bmw from May of 2021 to April of 2022 rose 15.7%, the highest of any auto maker:
https://b2b.kbb.com/news/view/new-ve...emains-strong/

[testing02hwr]

Originally Posted by MachinesWithSouls

This March, It’ll be 2 years since I had placed an order for my G80 M3. The MSRP was $2,700 less then it is now, plus I received significant money off the sticker price. An Identical M3 today costs about $10k more due to that price rise and the elimination of discounts, and that’s if you’re lucky to pay the actual sticker price. This adds up to more than 7%.

Somewhat related is financing and leasing costs also going up significantly.

You’re correct, BMW isn’t a charity, and costs do go up. But in 2021, BMW reached an all-time high in revenue:
https://www.cnbc.com/amp/2022/03/10/...-shortage.html

Only Ferrari has a higher operating margin:
https://companiesmarketcap.com/autom...rating-margin/

And finally, the average price of a bmw from May of 2021 to April of 2022 rose 15.7%, the highest of any auto maker:
https://b2b.kbb.com/news/view/new-ve...emains-strong/

I'll bite (again).

On the topic of the M3, I don't know the exact spec of your car so I will just assume you got it for $80k 2 years ago and now it is $90k (still using your $10k number). In those hypothetical 2 years, producers experienced 9.6% inflation in 2021 and 7.6% inflation in 2022 (YoY https://www.investing.com/economic-calendar/ppi-734 ). Using PPI, that $80k BMW is theoretically costing BMW $94k ($80k * 1.096 * 1.076 to adjust for 2 years of inflation). That is a $14k price difference. Obviously this would only be true in a vacuum and BMW is an international manufacturer so a US inflation metric wouldn't necessarily 100% apply but I am just trying to show that the suck applies to everyone.

BMW reached an all-time high in revenue, but does it matter? If you actually read the press release/conference call for the BMW earnings you linked (you can get to it from your CNBC link), they give all the credit to China:

Third-quarter revenues were up 35.3% on the previous year, reaching just under
37.2 billion euros. Revenues for the first nine months climbed to 103 billion euros.
This significant increase in revenues mainly resulted from the full consolidation of
our Chinese joint venture, BBA.

https://www.bmwgroup.com/content/dam...ll_Q3_2022.pdf
They just legally merged with their Chinese branch so their numbers are obviously going to be higher.

Let's just say you respond to this post and refute everything I wrote. Let's just say I am completely wrong. The point I am trying to make is this: WHO CARES. BMW produces cars and sets the price they want. If it means a higher profit margin than everyone else, then so be it. Apple's profit margin is 25% (even higher than Ferrari https://www.macrotrends.net/stocks/c...profit-margins ) but no one knows that because no one cares (I had to look up the number just now). If the iPhone is too expensive, people won't buy it. Simple as that. When BMW is unable to sell cars then maybe they should reconsider their pricing but, as of right now, this forum is full of enthusiasts who think their cars (old and new) are worth every penny they spent on it.

[MachinesWithSouls]

They can make a premium and charge what they want. I can pay it. But I can also make people aware of what’s going on.

The article I wrote made you think, given your well-thought out responses, so it did the job.

[LogicalApex]

Originally Posted by Onesie

You spun in the logical apex… too much throttle maybe? Finger happy…

You are saying here that merchants should charge more to tip the supply/demand scale.

Before you said “ I’d laugh if they asked me to even consider above MSRP or other dumb “back door” hits like forcing you to pay for “extras” so you’re at MSRP on the car, but bloated enough that they still got a chance to pound you out.”

I just don’t understand. Is your point to disagree with everything and everyone, depending on the topic of conversation?

I’m not trying to be disagreeable or obtuse. My point there was more to illuminate the absurdity of MachinesWithSouls statements. Where he’s conflating financing a car with a “subscription” and he also made the point that since technology allows this BMW should be doing it to make as much money as possible.

I wouldn’t pay for a heated seat subscription or any “subscription” for hardware already installed on the car. I’m not a fan of “renting” hardware. I can accept a subscription for features that require ongoing support, like Real-Time Traffic information or the like, but not hardware. The “cost” for the hardware has already been built into the product if it is shipped with the car (unless someone is to believe BMW will sell the car at a loss to make up the money in subscription fees later, which I doubt). So charging you later to “unlock” said hardware is a garbage money grab (or giving them a chance to “pound you out”).

Hopefully that is clearer

[MachinesWithSouls]

Originally Posted by LogicalApex

I’m not trying to be disagreeable or obtuse. My point there was more to illuminate the absurdity of MachinesWithSouls statements. Where he’s conflating financing a car with a “subscription” and he also made the point that since technology allows this BMW should be doing it to make as much money as possible.

I wouldn’t pay for a heated seat subscription or any “subscription” for hardware already installed on the car. I’m not a fan of “renting” hardware. I can accept a subscription for features that require ongoing support, like Real-Time Traffic information or the like, but not hardware. The “cost” for the hardware has already been built into the product if it is shipped with the car (unless someone is to believe BMW will sell the car at a loss to make up the money in subscription fees later, which I doubt). So charging you later to “unlock” said hardware is a garbage money grab (or giving them a chance to “pound you out”).

Hopefully that is clearer

What if the car comes with heated seats, but you don’t want or need them? Or you only want them a few months out of the year.

[LogicalApex]

Originally Posted by MachinesWithSouls

What if the car comes with heated seats, but you don’t want or need them? Or you only want them a few months out of the year.

If I didn’t want them I wouldn’t have ordered the car with them. I don’t have heated rear seats in my 530e even though it was probably $250 on the order sheet. I rarely have backseat passengers so I didn’t see the need to spend the extra money on it so I didn’t.

I would be pissed having that feature back there and every time someone sat back there and hit the button to be prompted on my iDrive screen to “pay up” for a feature I’d obviously had already paid for since it is physically there!

[G30M]

If people pay they will sell them and find ways to charge more

If people don't pay they will reduce the price or stop selling them

That's the bottom line essentially

[B58-M340iX]

Good and bad for owners. Say someone specced a car and didn't want heated seats or BSM or whatever. The original owner doesn't have the features but lugs around all the component weight for things not used. The second owner says hey I'd like BSM and heated seats. You can pay for them outright and now magically you have the features. No expensive retrofits - it just begins to work. I see how it benefits. Decoupling features from packages is a nice touch, but BMW already nickel and dimes you to death with packages standard on a Kia.