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business models, strategies and technologies

Car ownership business model that values experience over possession

How do you get the real benefits of a car?  Why so few choices?

Car ownership ain’t what it used ta’ be. Those backbones of macho identity and family functionality have become expensive financial black holes, with the extra burden of a guilty conscience about your environmental impacts.

Meanwhile, car manufacturers and their marketing honchos are flip-flopping and floundering on a slippery surface that seems like the proverbial “burning platform,” while the whole technology paradigm writhes and morphs beneath their wheels. We consumers no longer even know how to perceive or pigeonhole a car – vroom and muscle are defunct, but are they now entertainment and communication centres, a “green” statement or a status symbol, or a driver-not-really-needed pod in which we’re relegated to passive, squishy load elements?

At the same time, many big (European) manufacturers have recently incurred criminal charges and massive fines for corporate misdemeanours and malfeasance, leaving them with residual credibility the size of a peanut, if the world were fair.

Drive any Cadi you want with the convenience of ownership – without the hassle of actually owning it

For those who value experience over possession

Enter BOOK by Cadillac. This is a new business concept and consumer experience for luxury car sharing, designed to do away with all the hassle normally associated with car ownership, with added benefits that include being able to swap between the brand’s different models (all are the latest models with top-level specs) based on your particular need or whim and having the car delivered when and where you desire, with additional benefits like a concierge to help take care of other things. The sole intent is to allow you to enjoy life’s car-related experiences by eliminating the hassle, cost and inconvenience of owning a car.

Image from www.bookbycadillac.com

All this comes courtesy of a leasing-like setup described as subscription concierge service. BOOK by Cadillac gives you access to a curated collection of Cadillac premier luxury vehicles. No need to worry about insurance premiums, depreciation, taxes, maintenance or mileage restrictions, and no long-term commitment, so you can spend more time enjoying the drive. The whole lifestyle-adoration sales blurb – expensively crafted to look/feel/sound authentic and non-sales-like, of course – is in the fllm below.

Perhaps the most significant feature of this business model, however, is that your relationship with the manufacturer changes. This is because you only experience the positive aspects of using the luxury vehicle (provided you can painlessly cough up a big wad of your hard-earned income every month). Your brand perception then zooms up the positive scale.

Don’t hold your breath, however, ´cos when the concept went live it was apparently only available as a pilot scheme in the NYC metro area, with a USD 1500 monthly subscription fee. And the challenges for any company delivering on such a business model will surely accelerate exponentially outside any major urban hub.

Transformative way to access the luxury car experience

Cadillac is one of many car manufacturers near-desperately experimenting with break-the-mould commercial frameworks before their business model gets zapped from beneath their capital-heavy corporate feet.

Yes, it’s a transformative way of accessing the luxury car experience, but it’s very unlikely to work for the mainstream, child-mover and rust-bucket brigade who make up the vast majority of vehicle owners/victims. The profit margins won’t support it.

So this is an interesting idea, but smacks a fair bit of a pretotyping exercise to harvest market data for other ideas. Something big has got to change in the world of car usage and ownership, although it may not follow this path.

PS In November 2018 Cadillac announced “Following nearly two years of service, Cadillac will temporarily pause the BOOK by Cadillac program effective December 1, 2018. BOOK by Cadillac launched as a pilot program, providing the brand with valuable insights and contributing to Cadillac’s ongoing commitment in identifying new and innovative luxury experiences for their customers.”

At about the same time Volvo was reporting runaway success with a similar scheme with subscriptions that start at USD 600 per month for a two-year contract.

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