Volvo Cars is among car brands seeing an opportunity ahead in the subscription model

Volvo Cars is among car brands seeing an opportunity ahead in the subscription model

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.

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.

See also: COMMENT - OEMs explore bundled services and cars on subscription

Jaguar Land Rover joins subscription model