But if I buy the car and don’t care for the acceleration, then I can NOT book this feature. And in a competitive market, which the auto market is, this will mean that the MRSP for the car is lower for me than it would otherwise have been.
Unbundling is part of what made air travel affordable. In a competitive market, unbundling lowers base prices and creates consumer choice.
If a buyer wants 500hp instead of 300hp, there should be a 1-time fee assessed at the time that feature is unlocked (traditionally at purchase because it required a whole different engine; now via app/cloud/magic because it's all software).
The only reason a subscription model should be foisted on the consumer is when the vendor has actual recurring costs to provide a service. In this case, they do not - it's a one time software update.
The warranty period is known. The rate of failure is know. Etc.
And by your argument, once the warranty is done, the go-fast software should be free (or nearly so).
Brakes and tires? That's on the consumer.
Higher warranty claim rate due to the higher motor output? That's on Mercedes. But only during the warranty period. And if they have any sense they've modeled out that additional wear and now how much it costs (they need it to correctly price a subscription too).
Chances are they've over-engineered the car so there aren't (many) additional warranty clams. So any argument that you get savings passed to the consumer are likely incorrect. The buyer pays for a chassis/brakes/etc that can handle 500hp even if they only want the 300hp version.
Does the next owner of the car also get it? No? Then it is not "bought outright", it isn't a purchase at all.
Maybe it's worth accepting that businesses will not behave as you expect.
Also I don't think the 10.5% profit margin of Mercedes is low - the average for the S&P 500 is 11%.
The whole idea will be perceived for the pettiness and ripoff it is. Especially when no one will even know you pay the extra a month so there is zero status symbol with this.
No way this is around in a few years. They will lose more sales than they will ever make up with the monthly fee.
Should doctors cripple children that are born unless their parents charge extra to allow them to walk?
In both cases the product is initially created with the ability, and it’s a competitive market where the parents who are okay with this can save money on their birth expenses…
Edit: This “service” is waste, and morally reprehensible like burning a perfectly good house down, or shooting a deer and letting it lie to waste. Mercedes does not gain any additional capacity by reducing individual cars ability.
This is a case of creative business modeling. I believe that companies should invest in creating good business models. They also shouldn't over complicate them
Given that, I believe that the subscriptions to unlock seat heaters are a worse example of this and not great for customer satisfaction. Specially since all those cars are already equipped with seat heaters and essentially artificially jailed by software
Nobody ever does this. The savings is never passed onto the customer. The only time that happens is when they're trying to get just in under the competition's price, but will never go lower than that. Nobody is trying to pass the savings onto the customer, ever.
People then say, "customers must prefer dogshit because their spending habits tell the story"
at some point unbundling becomes extreme lack of transparency and customer-hostility if not a downright scam.
there are such things as externalities and transaction costs. they are manufacturing externalities and transaction costs to their benefit.
some companies put out the initial product with high-quality parts and as soon as it gets good reviews and traction they sub out cheaper parts. you could say if they didn't do that they'd have to charge more, they are giving early adopters an incentive or something, people should research which parts they are getting and let the market sort it out. if you value your time and expect reliable information from reviewers it's your problem.
today everything is a SaaS and you are permanently in a hostage situation where your car could get remotely downgraded, they could stop supporting it or discontinue a feature.
a market is a set of legal and social conventions and this is a pretty bad one. if you like markets you should want them to not be hellish, which means reasonable rules and conventions.
Price discrimination makes this "affordable", until the base price is just raised back to where it was originally except now you have a gazillion fees you have to pay so that companies can extract more money from people less sensitive to price changes.
A company's dream is to enact price discrimination on every single transaction so that there is no such thing as a consumer surplus. The absolute dream of a company is to make it so everybody pays exactly the largest amount they can bear for everything.
This is why we have tipping everywhere. This is why we have features locked behind paywalls for no reason. This is why we have colleges that are uber-expensive, unless you are poor, in which case they aren't expensive because you actually care about the price.
Price Discrimination and Big Data, when combined, allow for companies to give prices in such a way that no consumer on earth gets a surplus. Legislation to ensure markets with consumer surplus continue to exist is badly needed.