Cars-as-a-Service

Cars-as-a-Service

The future automobile rental business known as "cars as a service" (CaaS) would enable city drivers to use ride-sharing services. Owners of smart devices can use an app to contact a driverless car to pick them up for transportation or delivery purposes. The newest sophisticated transportation technology, such as linked automobiles, adaptive cruise control, smart device integration (smartwatches, smartphones), and other technologies, are made available to consumers through the car-as-a-service platform. Additionally, by removing the requirement for a significant capital investment, it lower the cost of vehicle ownership. The market for cars-as-a-service is expanding as a result of the aforementioned considerations.

The Cars-As-A-Service Market is expected to grow at a steady rate of around 5% owing to the availability of a wide range of automobiles with a single subscription package. Car-sharing services typically offer a fleet of vehicles that are more fuel-efficient and emit fewer pollutants than individually owned cars. This aligns with the increasing demand for sustainable transportation options.. Major companies in the market of cars-as-a-service are working together to improve technologically advanced features in vehicles. For instance, In August 2021, electric vehicle manufacturer Tesla announced it would be launching a subscription service for its Full Self-Driving (FSD) technology. Customers could subscribe to the service for a monthly fee, rather than having to pay for the feature upfront.

• Based on propulsion type, the market is segmented into utility I.C. powered vehicles and electric vehicles. The Electric Vehicle category is to witness higher CAGR during the forecast period owing to the growing penetration of electric vehicle sales from developing nations such as China, India, and Mexico, among others. Electric vehicles are being adopted to promote green energy due to the growing pollution across geographies. Furthermore, the entry of global players into emerging markets adds to the growth of the market. For instance, Mahindra & Mahindra is all set to launch the XUV 400 electric SUV in the Indian market.
• On the basis of vehicle type, the market is categorized into sports, luxury, economical and multi-utility vehicles. Among these, the economical vehicle to hold a significant share of the market in 2020. Firstly, the cost of ownership and maintenance for economical vehicles is significantly lower compared to luxury or high-end vehicles. This makes them a more attractive option for car rental companies, who can then offer affordable rates to customers, especially in emerging markets where cost is a primary consideration.Secondly, economical vehicles are more fuel-efficient, which translates into lower operating costs and increased profitability for car rental companies. With rising fuel prices, this has become a critical factor in choosing the type of vehicle to add to their fleets.
• Based on application, the cars-as-a-service market has been classified into private & corporate. The private category is to witness higher adoption of cars-as-a-service during the forecast period. This is mainly due to the rising income and tourism in developing regions like APAC. For instance, Ride-hailing major Uber IN 2020 launched an on-demand 24x7 Auto Rentals service in Delhi NCR, Bengaluru, Mumbai, Hyderabad, Chennai and Pune that will allow riders to make multiple stops along a journey.
• For a better understanding of the market adoption of the cars-as-a-service industry, the market is analyzed based on its worldwide presence in the countries such as North America (U.S., Canada, Rest of North America), Europe (Germany, U.K., France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. APAC is anticipated to grow at a substantial CAGR during the forecast period. This is mainly due to the increasing prevalence of tourism and recreational activities backed by growing disposable income and surging per capita spending of individuals in the emerging economies of the region is driving the growth of the market. Moreover, the wide expanse of car rental services like uber, ola etc along with growth in the technology and advancement of the automotive sector is further expected to support the market growth. In addition, the constant development of autonomous and electric vehicles will further accelerate the cars-as-a-service market growth in the region. Major automakers and OEMs are also establishing their platforms and services in the area, including Hyundai, Toyota, Daimler AG, BMW AG, Mahindra Motors, and TATA Motors, which is poised to support the APAC vehicle subscription market outlook.
• Some of the major players operating in the market include AB Volvo, BMW Group, Daimler AG, Ford Motor Company, Hertz Global Holdings Inc., Hyundai Motor Company, Lyft Inc., SIXT SE, Uber Technologies Inc., and TOYOTA MOTOR CORPORATION.