Vehicle Subscription Market Regional Outlook 2020 2030

Posted by Dinesh on April 12th, 2021

Advantages over Conventional Lease Models to Boost Demand for Vehicle Subscriptions

The vehicle subscription market has taken off in the past decade as a result of the ease of exploring new products and mobility alternatives via online channels. Consumers are increasingly inclining toward utilizing new services, which, in turn, have kick-started a notable shift in the automotive retailing space. Although car dealerships are anticipated to remain one of the top most factors influencing consumer decisions, the advent of various digital channels are expected to gradually gain popularity. Moreover, modern day consumers are more open to paying their finances using digital channels due to which, the demand for vehicle subscriptions has increased consistently particularly in developed regions.

In the current scenario, a number of consumers is increasingly opting for vehicle subscription services in comparison with car ownership due to a host of factors. Despite vehicle subscription being a niche product in the current scenario, analysts at the Transparency Market Research are of the opinion that this business model is projected to garner immense popularity in the upcoming decade. The growing popularity of leasing out vehicles, mainly in developed regions of the world, is expected to have a strong influence on the growth of the global vehicle subscription market during the forecast period.

Despite rise in disposable income in several parts of the world, consumers are increasingly interested in opting for vehicle subscriptions, as it offers flexibility and opportunity to drive different vehicles. At the back of these factors, the global vehicle subscription market is expected to surpass the US$ 81 Bn mark by the end of 2030.

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High Market Growth across Developed Regions

Due to the robust automotive framework and presence of top-tier companies in the developed regions, including North America and Europe, vehicle subscriptions have garnered immense popularity in these regions. While the subscription trend has gradually taken over modern day consumerism, vehicle subscription remains at a nascent stage. The automotive industry is aligning its operations in response to evolving consumer preferences by curating customized subscription plans. Some of the prominent stakeholders involved in the vehicle subscription market, including car manufacturers, insurance firms, tech-startups, lending companies, and repair companies and on the course to modify their business operations to accommodate the increasing the demand for vehicle subscription. The increasing acceptance of the term ‘temporary ownership’ among the current generation of consumers is projected to fuel the demand for vehicle subscription during the assessment period.

Furthermore, at present, consumers are of the opinion that vehicle subscription models are more cost-efficient in the long run in comparison with conventional car lease, outright purchases, or rentals– another factor that is likely to fuel the expansion of the global vehicle subscription market during the assessment period.

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Demand for Vehicle Subscriptions to Increase Post COVID-19 Pandemic

Over the past few years, the demand for personal mobility witnessed a major spike around the world. However, the growth curve was largely disrupted by the outbreak of the COVID-19 pandemic due to which, automotive manufacturers and car dealerships are increasingly diversifying their services. As the demand for vehicle subscription is anticipated to remain less in the first three quarters of 2020 and markets around the world open up, the demand is likely to increase. Consumers are projected to lean away from using public transport alternatives due to safety reasons amid the ongoing COVID-19 pandemic due to which, vehicle subscription market is expected to gain popularity.

Drivers of Vehicle Subscription Market

  • Flexibility, convenience, and affordability are key factors driving the vehicle subscription market. Car subscription services represent a fundamental paradigm shift for the average automotive consumer. Instead of buying or even leasing, consumers are likely to subscribe to the vehicle, while paying a monthly subscription fee that covers complete vehicle maintenance expenses such as insurance, regular vehicle maintenance, and roadside assistance. Moreover, vehicle subscribers can swap or quit the subscribed vehicle without paying extra charges, which is nor facilitated in th

Vehicle Subscription Market: Overview

  • The global vehicle subscription market is anticipated to expand at a CAGR of ~15% during the forecast period, owing to the growing adoption of vehicle subscription model, as it is cost-effective and offers easy user access to vehicles. Moreover, growing competition is propelling service providers to offer better services and pricing, consequently, boosting the market.
  • The global vehicle subscription market is in the nascent phase, especially in developing nations, considering the change in consumer behavior from ownership to user model. OEMs are offering vehicle subscription service and thus, competing with mobility providers and technology companies. Several OEMs have started rolling out vehicle subscription services either directly or in partnership with third-party providers, which is estimated to create a much needed trust for higher vehicle subscription.

Increase in Consumer Demand for Flexible Subscription Models to Drive Global Market

While the developed regions are slated to remain at the forefront in terms of vehicle subscription, the Asia Pacific region is gradually entering the mix as market players in nations including India and China continue to express considerable interest in the vehicle subscription model.

  • Although car ownership is expected to remain popular, consumers are increasingly opting for flexible offerings. While financial factors are likely to have a strong influence on the eventual consumer purchase decisions, other factors including possibility of changing vehicles, flexibility of terminating a contract, adjusting the scope of service, and more are expected to bolster the demand for vehicle subscription during the assessment period. The increasing popularity of electric vehicles is expected to have a strong influence on the growth of the global vehicle subscription market during the assessment period..

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Dinesh

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Dinesh
Joined: March 15th, 2021
Articles Posted: 134

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