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Car Subscription Market Size By Subscription Provider (OEM, Third-party Service Provider), By Vehicle (Luxury Car, Executive Car, Economy Car), By Subscription Period (0 - 6 Months, 6 - 12 Months, More Than 12 Months), COVID-19 Impact Analysis, Growth Potential, Regional Outlook, Competitive Market Share & Forecast, 2023 – 2032

  • Report ID: GMI4847
  • Published Date: Dec 2022
  • Report Format: PDF

Industry Drivers

Car Subscription Market size exceeded USD 5 billion in 2022 and is poised to grow at over 35% CAGR between 2023 and 2032. Growing demand for car leasing services globally will drive the market revenue.
 

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The flexibility and cost-effectiveness associated with car subscription services are major factors promoting product uptake. Increasing consumer interest in acquiring cars at affordable monthly installments, inclusive of the cost of insurance, maintenance, and roadside assistance, makes the subscription model feasible for such buyers. Furthermore, market participants are focusing on enhancing the existing technology for better booking services to make it accessible on all sorts of devices via a simple platform interface, which is expected to supplement industry development through the estimated timeline.
 

Inadequate transportation infrastructure may limit business expansion

Some developing countries are experiencing infrastructure development challenges. The lack of public transportation and infrastructure due to unfavorable economic and fiscal policies may prevent automobile subscription service providers from introducing their services in a specific location, limiting the market growth. However, increasing government investments and initiatives toward infrastructure development are projected to aid manufacturers in overcoming this restraint in the coming years.
 

High demand for economy cars to foster third-party service provider segment growth

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The third-party service provider segment in the car subscription market is estimated to record 39% growth rate through 2032. These service providers include economical automobiles in their automotive subscription offerings. The growing popularity of economy cars for their superior fuel efficiency, low cost, and dependability is complementing the market demand. Third-party service providers are also promoting strategic alliances to broaden their service reach, which is likely to bolster segment progress. For instance, Wagonex Technologies' Car Subscription Software makes it simple to start subscription services.
 

Better driving experience to benefit luxury car segment

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The luxury car segment is expected to showcase more than 32.5% growth from 2023 to 2032. Luxury vehicles provide a more comfortable and convenient driving experience. BMW AG, for example, offers its Access by BMW service to give customers access to its luxury automobile portfolio under a subscription model. Growing economic status and changing lifestyles are expected to boost the demand for luxury cars.
 

Increasing availability of short-term services to propel 0–6 months segment growth

The 0-6 months car subscription market captured a revenue share of over 43% in 2022. Several automotive OEMs and third-party organizations enable their clients to subscribe to vehicles for a day or up to six months, making it simple for individuals to adopt these services who require vehicles for a short period of time. The soaring availability of short-term automobile leasing services is likely to augment industry growth.
 

Prevailing vehicle ownership trends to support Europe market growth

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Europe car subscription market is anticipated to witness a CAGR of 33% during the forecast period. Shifting customer preferences for car ownership are allowing third-party service providers to offer vehicle subscription services across the region. Furthermore, proliferating demand for automobile subscriptions in the region is likely to facilitate new business prospects, clients, and profit channels, enabling dealers, leasing businesses, and rental businesses to capitalize on expansion opportunities.
 

Strategic initiatives by major companies to shape the market outlook

Volkswagen, Toyota, Wagonex Limited, Tata Motors, AB Volvo, BMW AG, Daimler AG, Hyundai Motor Co., General Motors Co., Lyft, ZoomCar, and others are among the leading participants in the market.
 

These firms are focused on entering new markets and integrating advanced technology into their services to improve their business presence. To cite an instance, in March 2022, auto giant Hyundai Motor Group's flagship electric car model Ioniq 5 launched its mobility subscription service in metropolitan areas, including Seoul. In another instance, in September 2022, SoftBank, a Tokyo-based telecom company, introduced a vehicle subscription service to allow consumers to rent a used car for a fixed monthly fee.
 

Impact of COVID-19 on the car subscription market trends

The COVID-19 outbreak adversely impacted businesses and industries, including the automotive sector. Initially, automakers, suppliers, and service providers had to halt operations in keeping with the prevalent government-imposed lockdown restrictions in order to prevent the spread of the pandemic. Moreover, decreased customer demand and car sales hampered the global automotive sector, including car subscriptions. However, the declining infection rate and easing of lockdowns by governments have positively influenced the industry scenario in recent years.
 

The market research report on car subscription services includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2032 for the following segments:

Market, By Service provider

  • Original Equipment Manufacturer (OEM)
  • Third-Party Service Providers

Market, By Vehicle

  • Luxury Car
  • Executive Car
  • Economy Car
  • Others

Market, By Subscription period

  • 0-6 Months
  • 6-12 Months
  • More than 12 months

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Russia
  • Asia Pacific
    • China
    • India
    • Japan
    • ANZ
    • South Korea
    • Southeast Asia
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • Middle East & Africa
    • South Africa
    • Saudi Arabia
    • UAE
    • Israel

 

Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The industry size of car subscription exceeded USD 5 billion in 2022 and is poised to grow at over 35% CAGR between 2023 and 2032, owing to the rising demand for car leasing services globally.
The rising economic status and changing lifestyles are likely to boost the demand for luxury cars. The luxury car segment is expected to showcase a more than 32.5% growth rate between 2023 and 2032.
The Europe market is set to expand at over 33% CAGR from 2023 to 2032 on account of the shifting customer preferences for car ownership, which is enabling third-party service providers to offer vehicle subscription services across the region.
Volkswagen, Toyota, Wagonex Limited, Tata Motors, AB Volvo, BMW AG, Daimler AG, Hyundai Motor Co., General Motors Co., Lyft, ZoomCar, and others are among the leading participants operating in the industry.

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 18
  • Tables & Figures: 225
  • Countries covered: 21
  • Pages: 200
  • Upcoming Report: Details can be customized to meet your information and data needs. Feel free to share your detailed research requirements via this form.

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