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2021
Car Subscription Market

Car Subscription Market

by Service Provider (OEMs & Captives and Independent/Third Party Service Provider), Vehicle Type (IC Powered Vehicle and Electric Vehicle), End Use (Private and Corporate), and Subscription Period (1 to 6 Months, 6 to 12 Months, and More than 12 Months): Global Opportunity Analysis and Industry Forecast, 2020-2027
Update Available On-Demand

Report Code: A10188
Pages: 248
Feb 2021 | 10920 Views
Author(s) : Omkar Bachal , Sonia Mutreja
Tables: 114
Charts: 60
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COVID-19

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Car Subscription Market Statistics 2020-2027:

The global car subscription market was valued at $3,550.4 million in 2019, and is projected to reach $12,090.6 million by 2027, registering a CAGR of 23.1%. Europe was the highest revenue contributor, accounting for $1,465.9 million in 2019, and is estimated to reach $4,491.6 million by 2027, with a CAGR of 21.7%.

The COVID-19 outbreak is resulting in economy uncertainty, restricted commute activities and reduced consumer demands, thus hindering the demand for car subscription services. the outbreak of COVID-19 health crisis has negative impact on the overall market, owing to the weak financial performance of the original equipment manufacturers, as they are expected to focus on working capital management. Furthermore, the recovery of the market is quite fast as digital technologies are evolving in the time of such health crisis. The expected time to recover the market will start from the fourth quarter of the 2021, and to gain momentum in 2022.

Car subscription is mode of service which is new model of ownership with fixed periodic recurring fees that mainly covers the insurance as well as maintenance expenses of the car. The car subscription mainly opts normally for the duration of minimum 1 month to the maximum 2 years. The car subscription is midpoint service solution between the car rental and car leasing services, which having benefits over these two modes of services. Moreover, car subscription also includes the multiple switches of the subscribed car and additional vehicle expenses such as insurance and maintenance are taken care by the service provider.

Car-Subscription-Market-2020-2027

OEM and their captives are integral part of the global car subscription market; however, independent service provider is strategically involved in partnership and product development to gain the competitive advantage. COVID-19 health crisis has significantly impacted the overall market activities as commute restrictions across the globe and lower consumer confidence.

Factors such as flexibility, affordability, and convenience of car subscription, and benefits over leasing is expected to drive the growth of the market. However, well-established and dominance of vehicle leasing, rental, and sharing market, and the leasing model is cost-efficient compared to subscription schemes, which hinder the market growth. Entering into strategic partnership with automakers to gain competitive advantage, development of strong digital platform to operate the services effectively, and expansion of dealer network to better reach or effective provide services are some of the factors that are expected to foster the market growth.

The global car subscription market is segmented into service providers, vehicle type, end use, subscription period, and region. Depending on service providers, the market is bifurcated into OEM/captives and independent/third party service provider. By vehicle type, it is divided into IC powered vehicle and electric vehicle. On the basis of end use, it is categorized into private and corporate. By subscription period, it is divided into 1 to 6 months, 6 to 12 months, and more than 12 months. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

The key players operating in the car subscription market are Daimler AG, Drover Limited, Facedrive Inc., Fair Financial Corp., OpenRoad Auto Group, Porsche AG, Primemover Mobility Technologies Pvt Ltd., The Hertz Corporation, Toyota Motor Corporation, and Volvo Car Corporation.

Benefits over leasing are propelling the growth of the car subscription market 

Vehicle leasing is a cost-effective solution over car subscription service in the long run; however, car subscription has bunch of benefits over car leasing. Car subscription is associated with multiple switches of the subscribed vehicles under the certain prefixed terms, which is not provided in the car leasing service. Moreover, car leasing incurred various costs such as maintenance cost, repair cost, insurance cost, license fees, and taxes. However, in car subscription, these all costs are handled by the service providers. Moreover, the agreement duration is long in the car leasing; however, it is not longer than 2 years generally which enables the short durational usage and changing the vehicle easily. These benefits over car leasing service are anticipated to spur the demand for car subscription service in the recent years.

Car Subscription Market
By Service Provider

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Independent/Third Party Service Provider Segment is projected as the most lucrative segment

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Entering into strategic partnership with automakers to gain competitive advantage 

Car subscription end users are preferring the authorized vehicle providers for reliability vehicles. Moreover, automotive manufacturers are introducing its own car subscription service vertical along with development of partner chain to cater the untapped markets. Changing consumer sentiments toward vehicle subscription as they adopt the service from the particular vehicle brand provider, market participants of car subscription market need to undergo strategic partnership to attain the long-term business opportunities and gain competitive advantage in the car subscription market. For instance, in 2019, Hyundai Motor India has launched subscription model operating in six cities across India as part of the partnership with Revv.

Car Subscription Market
By Vehicle Type

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Electric vehicle segment is projected as the most lucrative segments

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Development of strong digital platform to operate the services effectively

In the recent years, end users of car subscription services utilize and operate the services through the offline as well as online platforms. In the era of digital technology, end users are more inclining toward online business platform, owing to its operational efficiency and time-effective output. Additionally, market players are developing the websites and mobile application to cater to the changing need of end users and effective fulfillment of the requirement. For instance, car subscription market players such as Drover Limited, Facedrive Inc., Fair Financial Corp., OpenRoad Auto Group, and Porsche AG have well developed website and mobile applications to fulfill the business operations through online digital platform. Changing service offering outlook and increasing internet penetration across the globe sour the demand for strong digital online presence. This shifting trend toward online platforms creates requirement for well-developed website and mobile application to operate the business activities effectively. To attain the changing consumer need, market players need to develop its own website and mobile application with additional features to cope up with the immense competition from the leading players.

Car Subscription Market
By End Use

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Private segment is projected as the most lucrative segments

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COVID-19 impact analysis

The global impacts of the COVID-19 already hit the market significantly in 2020, and it is expected to affect the car subscription market momentum in 2021. The spread of the COVID-19 pandemic has negatively impacted the global car subscription market, owing to commute restrictions and expected weak financial performance of the market players in 2020. The economic impact of the pandemic has been witnessed by the organizations preparing strategic cost-saving plans. Organizations with vehicle assets are considering sale and leaseback options to improve cash flow. 

Car Subscription Market
By Subscription Period

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6 to 12 Months is projected as the most lucrative segments

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The major risk factors of the car subscription market participants are supply chain execution, regulatory & policy changes, meeting the safety measures, dependency on labor, working capital management, and liquidity & solvency management. For the car subscription market, the year 2020 was a negative performing year, owing to the negative demand and supply outlook from the COVID-19 crisis restrictions in end user. This momentum is anticipated to continue in the first quarter of the year 2021, however, market is expected to witness a small recovery by the end of the fourth quarter of the FY 2021. Commute restrictions and lower consumer confidence are the major factors for decrease in demand for car subscription in the COVID-19 health crisis duration. Demand from end users has reduced as there is limited operational activity. The overall consumer confidence level of these industries has declined, owing to operations with limited workforce capacity and inadequate health safety measures. This expected weak business performance directly impacts the overall service operations of car subscription. Service providers are expected to focus on the working capital management and there are very less chances for heavy investment in advanced technology.  

Car Subscription Market
By Region

2027
Europe 
North America
Asia-pacific
Lamea

Asia-Pacific would exhibit the highest CAGR of 27.1% during 2020-2027.

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Key Benefits For Stakeholders

  • This study presents the analytical depiction of the global car subscription market analysis along with the current trends and future estimations to depict imminent investment pockets.
  • The overall car subscription market opportunity is determined by understanding profitable trends to gain a stronger foothold.
  • The report presents information related to key drivers, restraints, and opportunities of the market with a detailed impact analysis.
  • The current market is quantitatively analyzed from 2019 to 2027 to benchmark the financial competency.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.

Car Subscription Market Report Highlights

Aspects Details
BY SERVICE PROVIDERS
  • OEMs & Captives
  • Independent/Third Party Service Provider
By Vehicle Type
  • IC Powered Vehicle
  • Electric Vehicle
By End Use
  • Private
  • Corporate
By Subscription Period
  • 1 to 6 Months
  • 6 to 12 Months
  • More than 12 Months
By Region
  • NORTH AMERICA  (U.S., Canada, Mexico)
  • Europe  (Germany, UK, France, Spain, Rest of Europe)
  • Asia-Pacific  (China, India, Japan, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
Key Market Players DAIMLER AG, Drover Limited, Facedrive Inc., Fair Financial Corp, OpenRoad Auto Group, Porsche AG, Primemover Mobility Technologies Pvt Ltd, The Hertz Corporation, Toyota Motor Corporation, Volvo Car Corporation
 

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Car subscription is the new era of car as a service offering, and it is center solution for the car leasing and car rental services. Car subscription is gaining momentum in the near future as it is having advantages such as short durational mobility solution, new era commute solution, and cost-effective for the vehicle expenses. Car subscription is accepted by majority of the urban commuter as it allows multiple switches for the vehicles and even less complex than leasing services.

The global car subscription market is highly fragmented due to presence of several market participants operating in the market. OEM and their captives have entered in this business model and become integral part of the business cycle. Independent or third-party service providers are mostly start-ups and has witnessed strategic partnership with automakers to provide effective services to the consumers. Moreover, the car subscription market participants are catering to their domestic markets as it relates to maintaining the large fleets and majority of the operations are preferred at the dealer end so there is no requirement of the direct presence of the market participants. In addition, India and ASEAN countries are expected to witness as a land of opportunities for the market players as majority of the consumers of these countries are millennial generation and they are more likely to attracted toward the car as service mode of ownership with additional benefits such as multiple swaps of the cars, which is prominent driving factor for such business model.

The global car subscription market is segmented on the basis of service providers, vehicle type, end use, subscription period, and region. Depending on service providers, the market is bifurcated into OEM/captives and independent/third party service provider. By vehicle type, it is divided into IC powered vehicle and electric vehicle. On the basis of end use, it is categorized into private and corporate. By subscription period, it is divided into 1 to 6 months, 6 to 12 months, and more than 12 months. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

Car subscription is the new era of car as a service offering, and it is center solution for the car leasing and car rental services. Car subscription is gaining momentum in the near future as it is having advantages such as short durational mobility solution, new era commute solution, and cost-effective for the vehicle expenses. Car subscription is accepted by majority of the urban commuter as it allows multiple switches for the vehicles and even less complex than leasing services.

The global car subscription market is highly fragmented due to presence of several market participants operating in the market. OEM and their captives have entered in this business model and become integral part of the business cycle. Independent or third-party service providers are mostly start-ups and has witnessed strategic partnership with automakers to provide effective services to the consumers. Moreover, the car subscription market participants are catering to their domestic markets as it relates to maintaining the large fleets and majority of the operations are preferred at the dealer end so there is no requirement of the direct presence of the market participants. In addition, India and ASEAN countries are expected to witness as a land of opportunities for the market players as majority of the consumers of these countries are millennial generation and they are more likely to attracted toward the car as service mode of ownership with additional benefits such as multiple swaps of the cars, which is prominent driving factor for such business model.

The global car subscription market is segmented on the basis of service providers, vehicle type, end use, subscription period, and region. Depending on service providers, the market is bifurcated into OEM/captives and independent/third party service provider. By vehicle type, it is divided into IC powered vehicle and electric vehicle. On the basis of end use, it is categorized into private and corporate. By subscription period, it is divided into 1 to 6 months, 6 to 12 months, and more than 12 months. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

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FREQUENTLY ASKED QUESTIONS?

A. The global car subscription market was valued at $3,550.4 million in 2019, and is projected to reach $12,090.6 million by 2027, registering a CAGR of 23.1% from 2020 to 2027.

A. COVID-19 helath crisis has direct impact on the global car subscription market, growing adoption of digital technology in transportation front and changing consumer sentiments towards vehicle ownership is expected to spur the demand for car subscription

A. The report sample for global car subscription market report can be obtained on demand from the website.

A. Adoption of electric vehicles as a car subscription services are gaining traction in the global market

A. Product Development, Expansion, Partnership, and Acquisition are the key strategies adopted by the key players of global car subscription market

A. The company profiles of the top ten players of the market can be obtained from the company profile section mentioned in the report. This section includes analysis of top ten player’s operating in the industry along with their last three year revenue, segmental revenue, product offerings, key strategies adopted, and geographical revenue generated

A. Based on the car subscription market analysis, Europe accounts to be highest revenue contributor in 2019. However, Asia-Pacific is expected to see a lucrative growth provides more business opportunities during the forecast period

A. By Vehicle Type, Electric Vehicle segment is expected to gain traction over the forecast period in global car subscription market

A. U.S., UK, and Germany has wirnessed as a key matured markets growing in the global car subscription market

A. The demand for mordern urban mobility solution to improve the operational efficiency; and increasing expansion activities of market players

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