Driving Revenue Growth and Customer Engagement: Subscription Management Solutions for Automotive OEMs

In the rapidly evolving automotive industry, subscription-based models are reshaping how OEMs engage with vehicle owners, providing ongoing feature updates that offer customers more control and flexibility. By adopting a subscription management system, OEMs can introduce dynamic, on-demand features that allow vehicle owners to personalize their experiences while OEMs benefit from new, continuous revenue streams. This approach to connected vehicles unlocks a customer-centric strategy that extends well beyond the initial sale.

Subscription Management in Connected Vehicles

Subscription-based feature enablement empowers vehicle owners to purchase and use specific features as needed, subscribing for limited or ongoing periods. This model allows OEMs to offer a tailored driving experience, where owners activate only the features they value most. It also provides an opportunity for OEMs to monetize features throughout a vehicle's lifecycle, maintaining engagement and fostering a stronger customer relationship.

Business Benefits for Automotive OEMs

1. New Revenue Streams
   Subscription models enable OEMs to generate consistent, ongoing revenue. Instead of a one-time sale, OEMs can encourage drivers to add features based on evolving needs and preferences.
2. Enhanced Customer Personalization
   By offering features on a subscription basis, OEMs allow vehicle owners to choose from various upgrades or add-ons available through the vehicle's Human-Machine Interface (HMI) or a companion app. This personalization enhances satisfaction and loyalty, as customers pay only for the features they find valuable.
3. Competitive Vehicle Pricing
   Offering features as subscriptions can reduce the vehicle's upfront cost by eliminating the need to include all possible features at the point of sale.
4. Increased Customer Engagement and Feedback
   Subscription-based systems keep OEMs connected with customers throughout the vehicle's lifecycle. By offering updates, gathering feedback, and analyzing feature usage patterns, OEMs can create a valuable feedback loop that informs future development and aligns with customer preferences.

How Subscription Management Works

The subscription management process ensures a seamless, user-friendly experience for vehicle owners and an efficient system for OEMs:

1. Presentation of Available Features
‍OEMs showcase a catalog of available features on the vehicle's HMI or mobile app, providing details about functionality, pricing, and compatibility. This catalog is customizable based on vehicle model and software version, giving customers clear insight into upgrade options.

2. Review and Selection
‍Vehicle owners browse the catalog, review descriptions, and select features they wish to activate. The intuitive process lets customers choose features that enhance their driving experience.

3. Customer Consent
‍Before activating new features, OEMs must collect explicit customer consent. This step ensures compliance with privacy standards and regulatory requirements, allowing customers to approve the subscription terms and any data processing required for feature activation.

4. Subscription and Payment
‍After selecting a feature, owners proceed to payment, choosing from various subscription plans (e.g., monthly or annual) that align with the OEM's business model.

5. Download and Installation
‍Once subscribed, the vehicle downloads the necessary configuration files or parameters for the selected feature(s). Installation may be scheduled when the vehicle is idle, ensuring a smooth and safe update process.

6. Activation and Use
‍After installation, the feature is activated and ready for use. Owners receive notifications on the HMI or mobile app with optional instructions, allowing immediate engagement with the new functionality.

7. Continuous Updates
‍OEMs can push updates to subscribed features as part of regular maintenance. Subscription settings are retained across software updates, ensuring purchased features remain available without interruption.

8. Managing Expiry for Time-Bound Features
‍For limited-time subscriptions, vehicles may autonomously disable features when their validity expires. This ensures proper control over subscription terms, even without relying on constant connectivity.

9. Feedback and Customization
‍OEMs can gather valuable feedback directly from customers, assessing feature popularity and exploring customization requests. This data fuels future improvements and innovations, aligning development with real-world preferences.

Notable Examples of Automotive Subscription Models

Automotive companies are increasingly adopting subscription-based models to enhance customer experience and generate continuous revenue. Here are some key examples:

1. Tesla's Full Self-Driving (FSD) Subscription
   Tesla offers its advanced driver-assistance system, Full Self-Driving, as a monthly subscription. This allows owners to access features like Autopilot navigation and automated lane changes without a significant upfront cost, providing flexibility and affordability.
2. BMW's Feature Subscriptions
   BMW has introduced subscriptions for in-car features such as heated seats and adaptive cruise control. Customers can activate these features as needed—for instance, subscribing to heated seats during winter months—enhancing personalization and cost-effectiveness.
3. OnStar by General Motors
   OnStar provides subscription-based services including emergency assistance, remote diagnostics, and navigation. With various subscription tiers, GM offers customers the ability to customize their service level, enhancing safety and connectivity.
4. Porsche's Functions on Demand
   Porsche allows drivers to activate select features anytime after purchase through a mobile app. Options like Active Lane Keeping can be added on a pay-as-you-go basis, enabling owners to tailor their vehicle features over time.

These examples demonstrate how subscription models cater to diverse customer needs while enabling OEMs to monetize features. By offering flexibility and personalization, OEMs can enhance customer satisfaction and secure ongoing revenue streams.

Sibros' Role in Empowering OEMs

Sibros enables OEMs to implement subscription management effectively. By handling the entire subscription lifecycle independently of core software updates, Sibros ensures that feature-specific changes do not interfere with the broader vehicle ecosystem. Key aspects of Sibros' contribution include:

• Subscription Infrastructure: Sibros offers the necessary infrastructure to manage subscriptions, allowing OEMs to enlist feature catalogs, manage activation and deactivation, and handle expiration autonomously.
• Integration with OEM Systems: The platform integrates with OEM backend systems for catalog presentation, payment processing, and feature customization to provide an end-to-end solution.
• Vehicle Communication: Sibros facilitates secure communication between the cloud and the vehicle, ensuring that feature downloads, installations, and activations occur reliably and safely.
• Offline Expiry Management: The platform ensures that time-bound features expire as configured, even without an active internet connection, preventing unauthorized feature use.
• Secure Feature Management & Vehicle Communication: Sibros ensures secure cloud-to-vehicle communication for reliable feature downloads, installations, and activations. Offline Expiry Management allows time-bound features to expire as scheduled, even without internet access, preventing unauthorized use.

By partnering with Sibros, OEMs can accelerate the deployment of subscription-based features and focus on delivering value to customers.

Long-Term Business Impact for OEMs

1. Extended Customer Lifetime Value
   Subscriptions allow OEMs to capture long-term revenue from each vehicle by offering add-ons and upgrades throughout ownership, deepening customer relationships and increasing brand loyalty.
2. Strategic Feature Releases
   OEMs can introduce new features or upgrades strategically, encouraging owners to personalize their vehicles based on evolving needs and technological advancements.
3. Improved Customer Retention through Unique Offerings
   Limited-time offers or exclusive upgrades help OEMs stand out in the market and build customer loyalty, retaining customers over longer periods.
4. Enhanced Agility in a Competitive Market
   Subscription management provides the flexibility and scalability OEMs need to adapt to shifting consumer preferences, positioning them to capitalize on an increasingly software-driven automotive landscape.

Conclusion

Subscription management is transforming vehicle ownership by enabling OEMs to build lasting, revenue-generating relationships with customers. Companies like Sibros play a pivotal role in this transformation by providing the tools and infrastructure necessary for OEMs to implement effective subscription models. By leveraging Sibros' platform, OEMs can deliver tailored experiences, increase engagement, and create additional revenue streams, paving the way for a subscription-based automotive ecosystem that redefines the value proposition of connected vehicles.

Through collaboration with Sibros, automotive OEMs are well-positioned to unlock new revenue opportunities, enhance customer satisfaction, and lead the industry into a future where vehicle features are as dynamic and adaptable as the drivers themselves.

Ready to elevate your subscription strategy? Connect with Sibros to learn how our end-to-end subscription management platform can help you transform the vehicle ownership experience and drive new business growth. Reach out today to explore the possibilities!