Automotive Subscription Services Market size worth $40 Bn by 2026
Published Date: November 3, 2020 Authors: Ankita Bhutani, Preeti Wadhwani
Automotive Subscription Services Market size is set to surpass USD 40 billion by 2026, according to a new research report by Global Market Insights, Inc.
Automotive subscription services offer consumers to pay monthly fees in return for access to a variety of vehicle models. In an automotive subscription service, the consumer can subscribe to one or more vehicles. The monthly fees include vehicle insurance, roadside assistance, and maintenance. The market has witnessed a spike in the adoption of automotive subscription services as the subscriber does not have to worry about maintenance, roadside assistance, and service expense of the vehicle.
Added benefits of automotive subscription services over vehicle leasing will fuel the market growth
The automotive subscription services market is primarily driven by the lower cost of subscribing for a vehicle compared to that of owning or leasing. In automotive subscription services, consumers can avail a variety of vehicle models such as sedan, SUVs, and crossovers. Easy access to luxury and premium vehicles at a significantly lower cost is driving market revenue. Rising consumer awareness coupled with increasing presence for subscription service providers is another prominent industry driver.
Get more details on this report - Request Free Sample PDF
Amid the COVID-19 outbreak, the automotive subscription services market has been severely affected. Nationwide imposed lockdowns across major markets have restricted the free movement of vehicles. The shipping of new cars for delivery and collecting vehicles that were at the end of their subscription services were halted. Across the industry, manufacturers are working hard to roll out vehicles onto the road as quickly as possible, which is expected to counter negative impacts due the pandemic on its market demand.
Growing market demand for subscription-based pricing model to trigger the growth of third-party service providers
The third-party service providers segment is expected to grow at 40% CAGR during 2020 to 2026 due to increasing shift of customers in handing over the maintenance and repairs responsibility to service providers. Third-party service providers play an integral role in ensuring the smooth functioning of customer’s vehicles by offering them period repairs and maintenance at a flat monthly fee. Third-party service providers are also offering discounts and attractive pricing models to sustain market outlook.
Browse key industry insights spread across 240 pages with 237 market data tables and 24 figures & charts from the report, “Automotive Subscription Services Market Size By Subscription Provider (OEM, Third-party Service Provider), By Vehicle Type (Luxury Car, Executive Car, Economy Car), By Subscription Period (0 - 6 Months, 6 - 12 Months, More Than 12 Months), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026” in detail along with the table of contents:
Better comfort and convenience offered by luxury cars will support market expansion
The luxury car segment captured over 30% of the automotive subscription services market share in 2019 driven by the increased popularity of premium and luxury class for comfort & pleasurable driving experience. Luxury SUVs are preferred for providing commercial services as well, which have accentuated the market demand for luxury SUVs.
Increasing preference of consumers toward newer car models to drive the 6 –12-month subscription segment demand
The 6-12-month automotive subscription services segment accounted for more than 40% market share in 2019 owing to the increasing preference of consumers toward newer car models. Automotive subscribers are frequently opting for better vehicles with the latest features & new technological integrations and are choosing a period of 6 to 12 months for availing the services.
Rising disposable incomes in developing economies fueling the Asia Pacific market growth
The Asia Pacific automotive subscription services market is poised to grow significantly with over 45% CAGR through 2026. The India & China have large populations with rising disposable income of individuals, which will boost the demand for vehicles across the region. Low cost of automotive subscription services coupled with a shift from traditional vehicle leasing is leading to a shift in consumer preference toward vehicle subscription compared to owning a vehicle.
Tectonic shift toward green fleet and electric mobility
Companies operating in the industry are focusing on energy efficiency and electric mobility as future technologies. Automotive subscription services have become mainstream for electric car manufacturers who were witnessing lower sales in 2019 due to high prices of EVs. These OEMs are leveraging their existing inventories and dealer networks to develop automotive subscription services models. For instance, several OEMs offer distinct brands for their subscription services, such as Book by Cadillac, Care by Volvo, Passport by Porsche, Flexperience by Mercedes-Benz, Access by BMW, and CarpeDrive by Jaguar and Land Rover (JLR).
Major automotive subscription services market players are BMW AG, Daimler AG, Drover Limited, Evezy, Exelorate Enterprises, LLC, Fair Financial Corp., General Motors Co., Hyundai Motor Co., INNOVATE AUTOMOTIVE PTY LTD, LeasePlan Corporation, Lyft, PrimeMover Mobility Technologies Private Limited (Revv), Tata Motors Ltd., Toyota, Volkswagen AG, Volvo AB, WAGONEX LIMITED, and ZoomCar.
Explore More on Related Topics: