From Automakers to Service Providers: A Brief Guide to Vehicle Subscription Services

While online subscription services such as Netflix for movies and Spotify for music continue their meteoric rise, companies of all types are beginning to reconsider and re-think their business models.

“Subscription companies are growing nine times faster than the S&P 500. Why? Because unlike product companies, subscription companies know their customers. A happy subscriber base is the ultimate economic moat,” says Tien Tzuo, author of Subscribed: Why the Subscription Model Will Be Your Company’s Future — and What to Do About It.

Automakers worldwide have not only taken notice but are also trialing and launching their own subscription services, with good reason.

“By 2025-26, vehicle subscription programs could account for nearly 10% of all new vehicle sales in the US and Europe,” forecasts researcher Sarwant Singh, head of the Mobility & Visionary Innovation Group at Frost and Sullivan

Automotive subscription services that let consumers use a car for a flat, all-inclusive monthly fee provide convenience, flexibility and cost savings. In addition, it provides an added benefit of “flipping” or changing car types depending on a consumer’s lifestyle needs with just a few days’ notice. For example, a commuter car may be used for city driving during the week and then swapped out for an SUV on the weekend with a vehicle subscription, for instance.

Automotive Subscription Key Drivers and Benefits

For consumers, the major benefits and motivating factors for signing up with a vehicle subscription service vary. 

They may include allowing subscribers to pay an all-inclusive monthly fee that covers insurance, roadside assistance, and maintenance, thereby eliminating the need to commit to a lengthy lease and down payment or having to purchase a car. 

Vehicle enthusiasts, alternatively, who want the flexibility and access to a variety of car models from a specific brand may want to try out a new car every month with easy cancellation and return policies.

Finally, convenience is critical with consumers desiring simple, temporary mobility solutions with online vehicle subscriptions that are all managed through a smartphone app with the vehicle provider delivering the car to their location.

Subscribing to Your Favorite Car Brand Is a Thing

Today, major automakers, fleet owners and new-mobility providers are launching subscription services with different business models across various markets.

In the US alone, BMW launched its Access by BMW subscription service in the Nashville market. Mercedes-Benz is testing its Mercedes-Benz Collection subscription service in Nashville and Philadelphia and Audi has introduced Audi Select in the Dallas-Fort Worth metro area and Audi on Demand in San Francisco. Ford’s used-car subscription service Canvas operates in San Francisco and Los Angeles offering its Lincoln brand of cars. And Porsche Passport, Porsche’s subscription service, operates in the Atlanta area.


Enhancing Fleet Efficiency with Smart Mobility Solutions

With so many subscription services being offered, automakers and fleet owners must find the right technology partners and solutions that will enable them to deploy a service that not only allows them access to multiple smart-mobility technologies but also provides everything needed to launch and manage successful app-based, new-mobility offerings. 

As part of its Multi-Service Fleet technology, Fleetonomy offers a smart mobility platform for automotive subscription services that maximize vehicle usage and help generate new revenue streams by launching app-based mobility offerings.

With the Fleetonomy platform, automotive subscription services enable businesses to maintain long-lasting relationships with their customers and offer app-based vehicle rental services, according to market demand. Additionally, subscription services can be personalized by matching the right vehicle with the right customer at the time of reservation and according to a customer’s pre-selected preferences.

Real-time insights generated by Fleetonomy’s automotive subscription platform also can predict the time it takes for each vehicle delivery and manages “flip” requests while simultaneously correlating maintenance and cleaning requirements across the entire fleet.

By keeping up with mobility trends and adding app-based services, automakers and other fleet owners will be able to compete and thrive in the growing automotive subscription service market.

To schedule a demo of Fleetonomy’s automotive subscription platform contact us at info@fleetonomy.io

Photos by bowie15, rasstock, scyther5

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