Evolving beyond car ownership
The rise of next-gen vehicle subscription models
Today’s drivers have a vast array of options that go well beyond traditional vehicle ownership. Consumers are now considering electric vehicle (EV) ownership, software-defined vehicles, digital purchasing experiences, flexible car ownership and car-subscription models—just to name a few.
The convergence of innovation and consumer demand is driving unprecedented change in the automotive industry. While some consumers want to reduce their carbon footprint, or avoid urban traffic, the most important driver of change is the concern around personal financial capacity in a period of prolonged global economic uncertainty.
To meet changing consumer needs, emerging mobility providers are disrupting the industry with innovative ownership models that offer quick, hassle-free, app-enabled transportation. Our latest report takes a look at the opportunities offered by flexible car ownership options.
Next-gen vehicle subscriptions focus on flexible, affordable mobility
Car subscription models, unlike traditional vehicle lease and loan programs, offer flexibility as well as the convenience of bundled services. Some offer customers the option to change vehicles throughout the subscription period in order to adapt to shifting needs. Others focus on customer value while maintaining more flexibility than traditional ownership models. While the markets for vehicle subscriptions and car sharing are different, consumers are benefiting from increased access to transportation options.
Future automotive mobility value chain
Source: Deloitte Future of Automotive Mobility to 2035.
What's in it for consumers?
Expense is a key consideration for younger consumers as they balance the need for mobility against the backdrop of significant financial pressures in an uncertain economic environment. Younger consumers are particularly interested in exploring the vehicle-as-a-service (VaaS) concept as it combines flexibility with the potential savings of a pay-per-use option.
Percentage of U.S. consumers who question whether they need to own a vehicle (by age group)
What vehicle subscription services mean for the auto industry
Getting more customers in the door
While original equipment manufacturers (OEMs) are rushing to develop vehicle innovations that cater to their customers’ demands, they have been slow to adopt next-gen subscription offerings that bundle all costs into a single convenient, transparent, and flexible monthly payment—something that drivers cite as the most important characteristics of vehicle subscription services.
OEMs and dealers can benefit from emerging subscription start-ups
When asked about the most important aspects of the vehicle purchase experience, consumers cited getting the highest value for their money, transparent pricing, and physical interaction as key.i By putting these customer needs first, some emerging vehicle subscription service start-ups are able to offer an efficient, hassle-free acquisition and ownership experience.
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What’s next for vehicle subscription services?
The convergence of cost-conscious consumers, EV adoption, and a proliferation of connected technologies is a catalyst for transformation—one that may unlock significant opportunities for well-positioned automotive sector leaders. While early attempts at car subscription models may have proven largely unsuccessful, a next-gen approach that recognizes the need for flexible, affordable alternatives to personal car ownership may find opportunities for growth amidst prolonged economic uncertainty and the global push for decarbonization.
For more information on Deloitte’s vehicle subscription offerings, click here.
i Deloitte, 2023 Global Automotive Consumer Study, January 2023.
