Every automaker has been trying to figure out for a few years now exactly what millennials and GenXers want in a vehicle: Do they really not care about owning one, as the popular perception has become?
And for luxury brands, the question is compounded by wrestling with the possibility that consumers who are younger than the brand’s traditional cohort—but nonetheless upscale—may not want to own, or even lease, their own vehicle.
Now Cadillac is taking an unprecedented new whack at this quandary with what it is calling the auto industry’s first “vehicle subscription” service. Called BOOK by Cadillac, it will be available starting Feb. 1 only in the New York City metro area to begin, with registration now open for anyone interested.
With the tagline “For those who value experience over possession,” the General Motors-owned premium brand will offer BOOK members access to their choice of popular Cadillac models for however long they want the model, then the ability to switch to another model.
The “innovative new form of car ownership” will carry no commitment to lease, finance or buy a vehicle; at the same time, it will not amount to ride- or car-sharing. So the essence of the ownership experience will remain under BOOK, but with a lot more flexibility.
Cadillac executives are describing BOOK as an unprecedented take on the various new use models that have become popular with with the sharing economy in recent years, casting it as the first of its kind and the best of traditional and new mobility-services worlds.
“BOOK by Cadillac is an innovative new option targeted at a growing class of luxury drivers searching for access to various cars over time, dependent on their individual needs, coupled with a hassle-free white-glove exchange,” said Uwe Ellinghaus, Cadillac chief marketing officer, in a press release.
“Two of our main strategic initiatives are reaching Generation X and Generation Y, and building brand affinity with the next generation of consumers,” Melody Lee, Cadillac director of brand marketing, told brandchannel. “And this is one of the most innovative ways we’re trying to do this.”
“We’re seeing Generations X and Y luxury consumers start to change their preferences to look at ownership in a different way, and to prioritize experience over ownership, and to have different expectations about what a vehicle does for them. We see white space within and around traditional models of ownership—leasing, financing or buying—and the other extreme of rental or ride-sharing and car-sharing, like Uber and Lyft.”
Lee added that BOOK addresses what she described as a sweet spot that Cadillac found in researching the preferences of millennials.
“Millennials have been subject to some of the most sweeping generalizations out there,” she said. “We often talk about them in extremes. We say millennials are no longer are interested in ownership, or they want only to be part of the sharing economy. But in looking at the research and talking with members of both Generations X and Y, we don’t see that to be the case. They’re not that homogenous and they’re not that extreme.”
Those insights informed the business model for the on-demand service, which is priced at $1,500 a month, in a month-to-month arrangement with no long-term commitment—and no limit on mileage. BOOK will offer only Platinum-level versions of Cadillac’s XT5 sport-utility vehicle, CT6 flagship sedan, Escalade, ATS-V and CTS-V.
Members will have access to a mobile and web-based application for reserving vehicles through the motor vehicle sharing service, receiving white-glove concierge pickup and delivery to their desired locations. Registration, taxes, maintenance, insurance and detailing of the Book vehicles will be handled by Cadillac.
The $1,500 fee may seem hefty by comparison with lease rates for many Cadillacs that can come to only half that monthly amount. Lee said Cadillac took that into account with “rigorous financial analysis and several rounds of modeling to come to this price point. We also looked at the competitive landscape, looking at other similar programs in the mobility and sharing space, though we weren’t able to find anything like BOOK.”
“But you’re always getting a brand-new vehicle with BOOK, and it’s always [the highest] trim level. It’s the very best that Cadillac has to offer. It’s delivered to you with a full tank of gas. And all of the routine maintenance and other things you used to worry about are covered. Also, though it’s an intangible, opportunity costs are built into it: the time it saves you and the flexibility it gives you.
BOOK members also “will get access to the world of Cadillac,” Lee said, including “exclusive events, fashion and art.” It helps that Cadillac is headquartered in Manhattan, where its Soho headquarters (dubbed Cadillac House) serve as a material expression of the brand, including a showroom, art gallery and a first-floor coffee house by Joe.
Cadillac has “a plan over the next five years to expand to several more markets in the US,” Lee said. “Imagine being able to land in LA from New York and your BOOK subscription would be valid there as well. The beauty of this will be in scaling to other markets.”