As premium car brands such as Audi, Volvo and Jaguar Land Rover (JLR) roll out subscription services as an alternative to traditional car ownership, the trend will eventually move to mass market segments and embrace all OEMs, according to an analyst at consultants Frost & Sullivan (F&S).
Speaking at the F&S Intelligent Mobility conference in London, F&S senior partner Sarwant Singh said that all OEMs will want to offer car subscription services, as the sector is starting to see more growth. “At the moment the offering typically is built around things like warranty, servicing, delivery, insurance and administration, but in the future we expect things like tyres and refuelling to become part of expanded subscription service offering,” he said.
Go deeper with GlobalData
Singh also said that offerings have been, up to now, focused on a particular model or city. “But this is changing,” he said. “JLR, for example, has said it will provide subscription services all over the UK and in the future it will also be extended all across the model line-up.”
Singh also maintains that subscription models will be offered beyond the premium sectors. China, he says, illustrates some of the latest innovations in subscription offerings. He singles out Geely-owned Lynk & Co. “It [Lynk & Co] is positioning for the millennials and Generation-Z customers. They are positioning new models in new ways to gain new customers.”
Singh told delegates that a recent study undertaken by F&S means they expect every car company and leasing company to eventually offer a subscription service.
Geely-owned Volvo Cars recently said it expects half of its car sales to be on a subscription basis by 2025.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSee also: COMMENT – OEMs explore bundled services and cars on subscription
Jaguar Land Rover joins subscription model
