Car Subscription Will Be a Thing of the Future and Here’s why
Dec 06, 2019 15:36
After reading the concept of Car Subscription Service, one can conclude that it indeed is a novel idea. For consumers and the dealers alike. But mulling more on the topic leads to the inevitable question: Is there a future for Car Subscription in the general market? I mean, we all know that this service currently favors the rich majority, but is there a chance for this convenience to be available for the general public? And what scope does it hold for expansion?
An Emerging Culture
The concept of Subscription has since long existed in our society. From snack boxes to razors to cosmetic products. It seems everything these days can be availed on a subscription basis. These services call for direct-to-consumer models where a middleman no longer exists and tailor made products or services are delivered directly in order to build long-term loyalty and revenue with the consumers.
The thing to realize here, is that the Subscription business model has gradually infiltrated industry after industry, from e-commerce to retail, and all of a sudden there is this boom of ownership-cum-access transition in the automobile sector that we cannot seem to fully comprehend.
How Apt is the Subscription Service for Vehicles?
Rising inclinations in mobility, such as car-sharing, car leasing options, and car subscription services, are gradually changing the perspectives of people with regards to how they view the use, value and relate to private vehicles. The consumers are veering more towards the ‘usership’ of vehicles rather than ‘ownership’.
Everyday basic items and commodities and even luxury items are available for a flat monthly fee. This clearly highlights the accessibility of consumers to products that they may not need to own but temporarily require for a short period of time. People are even willing to pay more to access an item for a limited period, preferring to shirk any long-time commitment while having more flexibility in their choice.
This holds true in the case of subscription for vehicles as well, where many consumers agree that while a means of transportation is essential, owning the vehicle is not.
The Present Scene for Car Subscription Services
Going back to the question of whether this convenience can ever be available to the mass market and its scope of expansion if any, it should be said that Car Subscription is more than just catering to the rich with the affordability of high-end cars. Subscription in its most basic form is an agreement of access to a particular product or service in a continuous relationship formed on the expectations of significant value. This value can take multiple forms.
The key here is the flexibility that is built right in, not just for the customers but also for the dealers. One can have concierge services, service departments can have on-demand rentals for the owners, sales departments can have a multi-vehicle subscription program for customers who require access and not ownership. Smart software can be the key for dealers to scale their subscriptions as desired.
A free Feast
With the starters in the form of the subscription service being served, the main meal has also been set. Salivating over this economical opportunity are - the car manufacturers, various dealerships, maintenance and repair companies, lending and insurance firms, technology startups, concierge operators, AI companies and primarily the customers.
Vehicle Manufacturers have begun creating a new revenue stream by offering their own cars in the subscription programs. One-time sales have been ousted in favor of a flexible service model. Individual Brand Identities have already emerged within the leading car manufacturers - Canvas by Ford, Passport by Porsche, Access by BMW.
The various dealerships have the opportunity to repeatedly earn off of new or even used vehicles. Adding value to their on-the-verge-of-extinction business models, the dealerships lure consumers by allying with services offering maintenance and insurance.
At the tail-end of the bandwagon are the technology startups and AI companies who are reaping benefits by applying their knowledge of software services. AI services performing analytical predictions, aggregator services creating common work platforms and integrated services enabling seamless support across the vehicle subscription network. Opportunities galore.
Vehicle Subscription programs in addition to being highly flexible, are more cost-effective than car leases or financing. They gel perfectly with young immigrants, expats, and millennials seeking economical and temporary mobility solutions with simple cancellation or return policies. It is ideal for those who look to flaunt a new model every month without burdening their pockets and for those looking to avoid the painstaking rental or lease processes.
Besides, the fact that the vehicle subscription model can manage to meet the diverse needs, while simultaneously opening up a plethora of monetization opportunities for a broad range of stakeholders, with just a single car, is an unbelievable yet excitingly real possibility. With the amalgamation of the efforts and endeavors of the varied stakeholders, it would not be a stretch to say that an international, on-demand subscription economy will be served enticing the mass market as a whole.
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