New model of temporary ownership to target over 16 million vehicles and create a $100 billion business opportunity by 2025
LONDON, Sept. 19, 2018 /PRNewswire/ -- Frost & Sullivan, the growth partnership company, will host a live, complimentary Growth Innovation Leadership (GIL) briefing, Unlocking Vehicle Subscription: Growing Opportunities for Automotive OEMs, Dealerships, Startups, and New Entrants, on Tuesday, 9 October 2018, at 12 p.m. EDT. The webinar will offer expert insights from Dr. Julia E. Saini, Vice President and Vishwas Shankar, Research Manager, both representing Frost & Sullivan's Mobility Practice, joined by Graeme Banister, Venture Builder at InMotion Ventures.
For more information and to register for the webinar, please click here.
By 2025, it is estimated that over 16 million vehicles will be part of vehicle subscription services. Nearly 10% of all new vehicle sales in Europe and the US will be offered as part of vehicle subscription programmes, and the market will represent a staggering business opportunity of $100 billion.
Vehicle subscription services occupy a unique niche in the midst of carsharing, rental, leasing, and outright purchase, thereby targeting a white space opportunity. This new form of temporary car ownership is rapidly gaining appeal since it allows customers to switch programmes and swap vehicles easily.
A flat fee that covers registration, warranty, insurance, delivery, maintenance and repair services, and concierge services adds to the hassle-free ownership experience for customers. Simultaneously, it creates a cascade of revenue opportunities for automotive OEMs, as well as for automotive dealership groups, car maintenance and repair companies, insurance firms, technology startups, AI companies, lending companies, and concierge operators.
"Vehicle subscription is a transversal theme that cuts across new/used vehicles, vehicle segments, ICE and alternate energy vehicles, OEMs and non-OEMs, regions, young and old drivers, and mainstream/ premium/super premium customers," explains Saini.
"As car buying migrates to online platforms and smaller boutique stores, vehicle subscription is an opportunity for OEMs, dealerships, and new entrants to add value to their archaic business models," she adds.
Several OEMs are creating distinct brand identities for their vehicle subscription programmes, including Canvas by Ford, Book by Cadillac, Care by Volvo, Porsche Passport, Mercedes-Benz Flexperience, Access by BMW, and CarpeDrive by JLR. In time, vehicle subscription services will be offered by all OEMs across all key segments—super premium, premium, and mainstream.
"The recent combination of vehicle subscription with an array of mobility services, such as carsharing and ride hailing, has only served to reinforce its tremendous revenue potential," notes Shankar. "It is set to emerge as one of the most disruptive mobility services of the future."
Expert Insights You Will Not Want to Miss:
- Learn how vehicle subscription is evolving, critical success factors, and what to expect by 2025
- Understand how OEMs and non-OEMs are approaching this space, their strategies and end game
- Identify targeted vehicles (new, used, various segments, and body styles) and planned rollouts in the US and major markets in Europe
- Discover which customer groups are the main focus, along with the programmes and business models being created to attract them
- Explore partnerships being forged by OEMs, dealerships, and tech companies with other participants to develop unique offerings
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