Would it Benefit Lexus to Have a Subscription Program?
Daily Slideshow: Providing customers an opportunity to join a program that maintains their loyalty.
Brand Loyalty
As automotive enthusiasts, we are all loyal to a specific auto manufacturer, or two. Being loyal to your brand has its benefits. Dealers will often reach out to their customer's post-purchase to offer incentives, deals on maintenance packages, and opportunities to upgrade their current vehicles. The next thing to consider is that loyalty programs help dealers maintain and even grow their customer base. Dealers take care of their customers and in turn, the hope is usually that customers will return time and again to upgrade their vehicles, maintain their cars and of course, buy more cars from them.
Lexus Complete Lease
Lexus is one of a few auto manufacturers who will be testing the waters with a subscription style program: Lexus Complete Lease. The program is set to debut in the first quarter of 2019 and will initially cover the new 2019 UX 200 crossover.
This program will include two-year leases with a 20,000-mile limit for one non-negotiable price tag that includes the lease payment, car insurance, and maintenance coverage. Lexus has not disclosed how much the service will cost or which insurance carrier will be providing the coverage.
UX crossover
In 2019, this SUV crossover is going to be offered in a couple of platforms. Two engine options are offered. The UX 200 uses a 2.0-liter inline-four with 169 horsepower and 151 lb feet torque, with front-wheel drive and a continuously variable transmission. The UX 250h uses a hybrid that combines a 2.0-liter tuned for 143 horsepower, coupled with two motor-generators, to drive the front wheels. Power output is 175 horsepower. There's another motor that can deliver up to 7 horsepower to the rear wheels at up to 45 miles per hour to give the vehicle low-speed all-wheel drive. Consumers will also have the option of adding the "F-sport package" which includes aesthetic styling and suspension upgrades. The vehicle will also come standard with a 7-inch infotainment system, while a 10-inch version with navigation is optional. A major improvement is the addition of new controls designed for you to use with your right hand while driving. There are seek, tune, volume, radio and media buttons, all of which can be manipulated without taking your wrist off the armrest. This is going to be Lexus' first offering as a subscription service vehicle.
Subscription program benefits
Why have a subscription program in the first place? Well, think briefly about the generation in front of you today. Most everyone is subscribed to something. Whether it be a podcast, a YouTube channel, Amazon Prime, Blue Apron, etc. It will be adding to the consumer's need for convenience to have a subscription that handles nearly everything regarding their form of transportation. This generation loves package deals. Something that takes them out of scheduling, maintaining, paying for and insuring a vehicle is bound to be attractive to the younger population, at the least. This generation thrives on the ability to be able to use their phone and receive instant results. If these programs are offered online, exclusively, it will be a huge benefit to the consumer since it will save them time from having to go to the dealer and spend hours before driving off in an already depreciating asset.
Subscription service drawbacks
While a subscription service can have added benefits for the consumer, it has some drawbacks to the dealers who may offer this to their clients. There will be a sense of lost interpersonal communication. There will be no more putting faces to the names when it comes to purchasing a car. Dealers are not going to be happy about losing the one on one experience with their guests. This isn't necessarily a bad thing for the dealership as a whole, but more so for the salesmen and women who drive the sales of the particular dealership.
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