Car Subscription Market Size By Subscription Provider (OEM, Third-party Service Provider), By Vehicle (Luxury Car, Executive Car, Economy Car), By Subscription Period (0 - 6 Months, 6 - 12 Months, More Than 12 Months), COVID-19 Impact Analysis, Growth Potential, Regional Outlook, Competitive Market Share & Forecast, 2023 - 2032
The global car subscription market is slated to expand exponentially through 2032, fueled by the opportunities created by strict world government regulations for vehicle emission control. In addition, growing customer aversion towards purchasing a new automobile is also likely to shape the industry scenario. This trend has primarily been observed among the younger demographic.
According to the European Parliament, passenger vehicles are responsible for more than 60% of the CO2 emissions in Europe. Many regional governments, such as the UK, are adopting a zero emission vehicle (ZEV) mandate, which requires a certain percentage of vehicle manufacturers’ new passenger vehicle sales to be zero emission every year from 2024.
These developments have paved the way for a number of automotive subscription services across developed and emerging economies. For instance, the South Africa arm of Japan’s automotive giant, Toyota, teamed up with Kinto, a multi-mobility application that makes commuting across urban areas easier, to introduce the Kinto One car subscription service in the country.
This new service would allow motorists to reap all the benefits of driving a brand-new vehicle without dealing with the hassles of owning one.
The car subscription market has been divided in terms of service provider, vehicle, subscription period, and region.
In terms of service provider, the industry is witnessing strong efforts from the OEM segment. Many vehicle manufacturers are rolling out their own subscription-based mobility services in response to the ongoing consumer shift. Back in November 2022, Kia Germany unveiled its Kia Flex subscription service, where customers would be able to subscribe to a particular set of Kia models for a specified period ranging from 6, 12, to 18 months starting December.
Based on vehicle, the executive car segment is expected to amass sizable revenue by 2032. Executive vehicles are four-door saloons or sedans designed specifically for working professionals or business executives. Leading companies in the market such as Toyota Corporation, Hyundai Motors, and Volkswagen AG, provide executive automobiles through their automotive subscription service options which will help bolster segmental growth.
With respect to subscription period, the 6-12 months segment is estimated to grow at more than 37.5% CAGR from 2023 to 2032. Increasing prevalence of consumer vehicle usage is pushing service providers to open subscription for longer durations such as 6-12 months. Back in August 2022, STEER Technologies Inc., introduced its electric car subscription service in British Columbia, Canada, adding the region as a new service area.
From the regional perspective, the North America car subscription market is projected to witness strong growth, owing to the well-established vehicle production base in countries like the US, which is home to automotive giants such as General Motors, Ford, Fiat Motors, and Tesla Motors.
These automakers are shifting their focus on developing EVs and mobilizing compatible charging infrastructure. Recently, the US administration also announced the approval of plans for the first 35 states to build out EV charging stations across 53,000 miles of highways.
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