Automotive Subscription Service Market: Current Analysis and Forecast (2022-2028)

Automotive Subscription Service Market: Current Analysis and Forecast (2022-2028)

Global Automotive Subscription Services Market is expected to grow at a significant rate of around 25% during the forecast period. An automotive subscription is a new kind of ownership that has set, recurring monthly fees that are mostly used to pay for the vehicle's insurance and upkeep. The length of an automotive subscription typically ranges from a minimum of 1 month to a maximum of 2 years. The automotive subscription is a service that bridges the gap between renting and leasing cars, and it offers advantages over both service delivery models. Additionally, a car subscription provides the ability to switch out the subscribed vehicles many times and can enjoy the car without getting ownership of the car. Furthermore, the entry of global players into emerging markets adds to the growth of the market. For instance, in August 2020, Porsche launched a monthly Single-Vehicle Subscription (SVS) program in various cities in the U.S. including Los Angeles, Atlanta, San Diego, and Phoenix

AB Volvo, Assurant Inc., Tesla Inc., Cox Automotive Inc., Volkswagen AG, Toyota Motor Corp., Mercedes Benz Group AG, The Hertz Corporation, General Motors Co, Hyundai Motor Co. are some of the key players in the market. Several M&As along with partnerships have been undertaken by these players to facilitate customers with hi-tech and innovative products/technologies.

Insights Presented in the Report
"Amongst vehicle type, economy car category to witness robust CAGR during the forecast period”

Based on vehicle type, the market is segmented into a luxury car, executive car, and economy car. The economy car category is expected to witness higher CAGR during the forecast period owing to the growing penetration of ATVs from developing nations such as China, India, and Mexico, among others. Economy cars are adopted as subscription prices are affordable and have limited standards of fuel efficiency. 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.
"Amongst service providers, the OEMs to hold a significant share in the market in 2020”

Based on the drive type, the market is categorized into OEMs, mobility providers, and technology companies. Among these, OEMs hold a significant share in the market in 2020. This is mainly due to the low income and changing preference of the consumers to take a car on subscription rather than owning a car. Moreover, OEMs are working on subscription services and have great bandwidth and a pipeline of vehicles. The growing preference for the automotive subscription is increased as it has various benefits like low maintenance, affordable, monthly paying options, and less insurance costs. In addition, various key players are also showing interest which helps in the lucrative growth of the market in the forecast period.
"Amongst subscription period, 7-12 months category to witness robust CAGR during the forecast period”

Based on the subscription period, the market is segmented into 1 to 6 months, 7 to 12 months, and 13 and above. 7-12 months category to witness higher CAGR during the forecast period as the low subscription has various benefits as short-term automotive subscription services help consumers to enjoy car ownership without additional costs such as insurance, maintenance, and registration fees, and the subscription fees for the short-term period is affordable for the low middle-income population. In addition, the reduction in vehicle sales in the country due to rising vehicle prices is another factor boosting the adoption of automotive subscriptions from developing nations such as China, India, and Mexico, among others.
"Amongst end-users, private category to witness robust CAGR during the forecast period”

Based on the end-users, the market is segmented into business and private. The private segment category is to witness higher CAGR during the forecast period as the increase in the tours and travel with comfort. Moreover, for short-term use, the consumers don’t prefer to take the car permanently while as prefer to take the car on lease and pay comfortably from month to month.
"APAC to hold a significant share in the market”

In 2020, APAC held a significant share of the global automotive subscription services market. This is mainly due to the rapid urbanization, congestion in public transport, and growing disposable income of the populace are some of the factors responsible for the growth of the market. In addition, major global OEMs and service providers are planning to launch subscription services in Asian automotive market to grab early revenue growth opportunities in emerging countries such as China and India. Moreover, the growing prices of vehicles and middle-income consumers in these regions are also expanding the growth of the market.

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