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Mercedes will let customers drive 12 vehicles at a flat rate (Photo: Mercedes)

Mercedes-Benz will offer a flat rate to customers wanting to switch cars during the year, in a pilot project with two German dealer groups, Lueg and Beresa.

The German premium car brand said the rate, which includes insurance, maintenance, repair and tires, will let customers drive as many as 36,000 kilometers a year in up to 12 Mercedes vehicles.

Luxury sports car maker Porsche has been testing a similar program in and around Atlanta, Georgia, since late last year.

The tests are part of automakers' efforts to develop business models that can open up new revenue streams, while at the same time attracting potential car buyers to the breadth of their product offerings.

In the case of Porsche, customers can drive eight model variants such as the 718 Boxster and Cayman S, as well as the Macan S and Cayenne, for 2,000 dlrs a month. For 3,000 dlrs, they can drive 22 models, including more expensive models such as the Porsche 911 Carrera S and the Panamera 4S sports sedan.

Detlev von Platen, Porsche's head of sales and marketing, said the main reason the sports car maker is testing the subscription scheme is "because we want to understand how it functions." First results, he said in a recent press briefing, have shown that interest is "extremely high." He also said the test is attracting new and younger customers to Porsche.

At Mercedes, which didn't announce a monthly price for the service, a special app - Mercedes me Flexperience - lets drivers select a car and arrange pick-up and return.

"With Mercedes me Flexperience we have a new, fully digitalized mobility offering,” Mercedes sales boss Britta Seeger said in a press release.

The Mercedes subscription trial was developed and implemented by Lab1886, an innovation workshop that is part of Daimler, Mercedes' parent company.

Said Susanne Hahn, head of Lab1886: "With Mercedes me Flexperience we are once again providing proof that implementing new innovative products and business models within the shortest time possible is a priority for us."

Volvo, Ford, Cadillac also offer subscription products

Mercedes and Porsche aren't the only major car brands experimenting with subscription models.

Volvo Cars launched its own version of a flat rate in the US in September 2017. With "Care by Volvo," the Swedish brand offered customers an option to subscribe to a new Volvo XC40 by paying a national, fixed monthly fee. The program offered the option of getting a new car after 12 months.

California-based Canvas, which Ford Motor acquired in 2016, offers a bundled monthly subscription fee for a car that covers a preferred mileage package, insurance, warranty, maintenance and roadside assistance. Packages start at 400 dlrs a month.

“As car ownership evolves, we see Canvas as part of our suite of products that address changing customer needs in mobility,” Ford Credit's marketing boss, David McClelland, said in a statement.

In 2017, General Motors' premium brand Cadillac launched BOOK by Cadillac, a subscription service that gives members access to different Cadillac models on a month-to-month basis. The service is available in New York, Los Angeles and Dallas.

Melody Lee, global director of BOOK by Cadillac said the service is in demand with customers who are looking for alternatives to traditional leasing or purchasing options.

Said Lee: “BOOK by Cadillac has introduced entirely new customers to the brand and has been fully embraced by younger audiences as an innovative service that meets their ever-changing needs."

-By Arjen Bongard