Car Subscription Services: Growing Opportunities

Author: Augustin Friedel · Published: · Last updated: ·

Carsharing, Shared Mobility

Summary

Offering car subscription services as an alternative to car ownership is gaining traction across the globe. By taking a closer look at the current state of the car subscription industry, INVERS’ guest writer and industry expert Augustin Friedel outlines growth opportunities for OEMs, car dealers, and sharing providers.

two parked cars

Offering car subscription services as an alternative to car ownership is gaining traction across the globe. What started in the US has since made its way over to Europe and now also to Africa. Car subscriptions offered by OEMs have been around for multiple years but recently took off with increased customer demand and invested capital. This follows a general trend towards subscription products and services, with car subscription services often being referred to as “Netflix for cars”. 

The status quo in the car subscription market

Car subscriptions are seen as an attractive alternative to car financing, cash payment or leasing. Experts predict that car subscription services could make up to 40% of new car sales within the next 10 years. A survey by McKinsey also comes to the conclusion that car subscriptions from major OEMs are growing at a fast pace, as we can already see happening in the market. BCG is more conservative and forecasts a revenue potential of $30 to $40 billion dollars by 2030 in Europe and the US. This would be equivalent to approximately 15% of new car sales or 5-6 million active subscriptions.

There are a diverse group of stakeholders within the car subscription space. Automotive OEMs are starting their own services to build up direct relationships to customers, such as Care by Volvo – their car subscription program – which was launched in 2018. Traditional downstream players like car rental firms, dealers or leasing companies are getting active as well. In fact, one of the leading European car rental companies, Sixt, started car sharing and subscription services. Dealer groups are also utilizing their local brand when offering subscription services based on technology provided by Faaren, ViveLaCar, and others. In addition, startups and platforms are trying to disrupt the car subscription space with unique offerings, such as Cluno, Drover, and Carvolution who build dedicated fleets for car subscriptions linked to a fully digital user journey.

Access the full article

Augustin Friedel Avatar
Augustin Friedel

Augustin Friedel is a well-known shared mobility expert with passion for micro mobility, mobility on demand service and public private partnerships. After launching Uber in Germany, Augustin worked for companies like Blacklane, Rocket Internet and Deutsche Bahn subsidiary ioki. He is currently employed by Volkswagen AG but the views expressed in this article are his personal ones and not representing any Volkswagen activity or thinking.

Related Posts

header image of recap blog for Enhancing Car Sharing Through Technology webinar

Carsharing, Shared Mobility

Webinar Recap: Enhancing Car Sharing Operations Through Technology

In this webinar, Free2Move and Uber shared valuable insights on leveraging technology to solve two critical challenges in car sharing operations: damage detection and fleet rebalancing. The discussion revealed how AI-based solutions and strategic partnerships can significantly improve operational efficiency while enhancing the customer experience.

Insights Interview on Free-Floating Car Sharing in Bulgaria & Lithuania

Carsharing, Expert Interviews, Shared Mobility

Insights Interview on Free-Floating Car Sharing in Bulgaria & Lithuania

We interviewed Nerijus Dagilis, SPARK Founder and Chairman of the Board of SPARK Technologies, about their expertise in car sharing in Bulgaria and Lithuania. The topics included managing a 100% electric fleet and Spark’s new P2P elements within an existing free-floating model.

Insights Interview on Teledriving in Car Sharing

Carsharing, Expert Interviews, Shared Mobility

Insights Interview on Teledriving in Car Sharing

We interviewed Mariona Bosch and Justin Spratt from Vay about their expertise in teledriving. The topics included the USP of teledriving in car sharing, the current policy landscape in the US and Europe, and potential barriers towards wider adoption in car sharing.