Nearly one in three consumers in Europe would be likely to choose a subscription for their next car, according to a new survey. The flexibility and convenience of the car subscription model is driving interest.
33 percent of European consumers are considering a car subscription as an alternative to ownership in the future, according to a study from McKinsey & Company. Consumers appreciate the flexibility of car subscriptions, as they seek shorter commitments and fewer concerns about vehicle maintenance and depreciation. Many also value the simplicity of a fixed monthly price that covers all expenses.
David Bailey, professor in business economics at Birmingham Business School and a leading international expert on the automotive industry, highlights the growing importance of car subscription services for consumers.
– Car subscription services have taken off in Europe, especially with younger drivers. They give drivers more flexibility and choice. The cost of full ownership can be prohibitive for younger buyers in big European cities especially once insurance is factored in. Here car subscription offers the use of your ‘own’ car without all the hassle of full ownership. It is part of the 'mobility as a service' movement which is taking off, says David Bailey.
European Automotive Industry Sees Potential in Car Subscriptions
Jesper Hill-Kjærsgaard, CEO of the car subscription service :Dribe, notes that several big players in the European automotive industry are showing interest in their business model.
– We're seeing an increasing number of dealerships exploring new revenue streams to accomodate the change in technology and consumer behaviour. Many see subscription models as a catalyst for both growth and retention, says Jesper Hill Kjærsgaard. He adds:
– The industry is recognizing the opportunities presented by a plug-and-play solution that enables implementation of a subscription service without significant investments. Automated processes and streamlined digital management reduce the need for manual labour.
David Bailey sees this as a natural response to market demand.
– I’m not surprised car subscription services like :Dribe are getting lots of interest in franchise type set ups. There is a gap in the market for fleet managers to use this type of service. Across Europe, the market is set up to grow substantially in the future, says David Bailey.
Car Dealers Look to Expand EV-options
According to David Bailey, growing interest in car subscriptions among dealerships is linked to the new options they offer for electric vehicles.
– Car subscription services like :Dribe offers a low-risk way into consumers 'dipping their toes in' and using EVs for the first time. This is going to be key I believe in encouraging wider EV take up, says David Bailey.
:Dribe has observed a similar trend.
– The significant upfront cost of electric vehicles, driven by pricey batteries and cutting-edge technology, can pose a financial challenge for many consumers. Coupled with the uncertainty around future resale values, subscription models provide a flexible way to embrace the future of mobility without making a heavy financial commitment – meeting the evolving needs of today's consumers, says :Dribe CEO Jesper Hill-Kjærsgaard.