Saturday, 10 June 2023 08:43 GMT

“Silvercar By Audi” Rebranded To“Audi On Demand”

(MENAFN- Frost & Sullivan) A Fully Electric Offering and Year Long Rental Option Mark Rebranding of Audi's U.S. Vehicle Subscription Service as“Audi on Demand”

As German automaker refines its vehicle subscription service, Frost & Sullivan emphasizes that market success will depend on targeted solutions and clarity over end-to-end asset management

Audi of America recently announced the rebranding of its vehicle subscription service“Silvercar by Audi” to“Audi on Demand”. The rebranding will be accompanied by more extensive choices – whether in terms of vehicle, duration, or services – to meet dynamic, continually evolving, and highly variable mobility demands.

Vehicle subscription models were launched with great fanfare towards the end of the last decade as part of the general shift towards the sharing economy and -as-a-service models. While they were driven by a vision of giving customers more choice, improved flexibility, and greater convenience, their limited availability wherein they were offered only in a handful of cities and high prices meant that vehicle subscription in its initial iterations did not quite take-off.

Silvercar by Audi was launched in 2012 as a premium rental car service. In 2018, with the emergence of vehicle subscription, Audi launched“Audi Select”. However, dogged by pandemic slowdowns and citing challenges related to tepid demand and pricing issues, Audi shut its subscription service offering“Audi Select” in January 2021. Around the same time, Mercedes-Benz wound up its Collection car subscription service even as Access by BMW's pilot program in the U.S. also shuttered shop.

Subsequently, however, Audi partnered with Wagonex to offer its brand under subscription. Frost & Sullivan believes that this new branding and the addition of subscription features will bring together the best of rental and subscription models.

To learn more about the latest developments in this space, please access our recent research reports, outlook for global vehicle leasing & rental market , north american electric vehicle leasing growth opportunities , aftermarket for the european leasing and rental industry , and analysis of telematics in the european vehicle leasing and rental market , or contact for information on a private briefing.

Vehicle Subscription needs Multiple Stakeholder Engagement

Our annual outlook for the global vehicle leasing & rental market in 2022 highlighted that vehicle subscriptions would evolve to address shortcomings related to pricing for customers and residual value management for service providers. We had also indicated that OEMs like Audi and BMW were likely to revise their offerings to align with changing customer and market dynamics. Our prediction has been borne out by Audi's decision to rebrand and expand its range of service offerings.

Indeed, although subscription was a trending topic for much of the past decade, demand fell short of expectations. Several companies camouflaged rental solutions, short term lease and other similar mobility options under the rubric of 'subscription'. The continued lack of clarity over what constitutes 'subscription' has resulted in persistent confusion since there are a host of local players offering a wide range of product features and mobility solutions using the terminology vehicle 'subscription'.

Nevertheless, Frost & Sullivan research underlines that subscription solutions still offer tremendous potential, particularly in Europe and North America. Based on current developments, we expect a trend convergence wherein car rental and subscription meet somewhere midway and are subsumed under the service category of 'subscription'. That said whether this prediction pans out will depend on market demand and competition from other mobility solutions.

In its new avatar,“Audi on Demand” will be a comprehensive rental solutions provider that packs in the features of vehicle subscription, particularly, flexibility. This means there are daily, weekly, and monthly options to which has now been added long-term, yearly rental options. There are, in addition, the usual inclusions of maintenance, delivery, pick up and drop services, and roadside assistance, among others.

On offer are both SUVs like the Q7 and Q5 and sedans like the A5 Sportback. And now,“Audi on Demand” has added an electric vehicle – the Audi e-tron Sportback – to its roster. With this, it lays claim to being the first and, so far, only rental car company to offer a fully electric vehicle in its line-up.

To succeed, vehicle subscriptions will need be designed cohesively by multiple stakeholders, including OEMs, leasing providers, start-ups, and other non-mobility businesses. Synergistic partnerships that bring together the product development competencies of automakers, residual management capabilities of leasing companies, and remarketing expertise of dealers and brokers will rejuvenate the vehicle subscription space. Simultaneously, leasing associations in key markets will need to promote subscriptions which are an extension to leasing.

Going forward, market participants will need to focus on two major issues. First, to overcome issues of residual asset management, stakeholders will need to effectively strategize end-to-end handling of the asset. Second, to meet customer expectations, vehicle subscription will need to be remolded as a more refined, targeted solution much like what Audi has tried to achieve as part of its rebranding.

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About Abishek Narayanan

Abishek Narayanan is Research Manager within Frost Sullivan's global Mobility practice. He has a decade's experience in business research in product and service-based industries, with core expertise in Mobility products such as Vehicle Leasing, Car Rental, Vehicle Subscription, and Fleet Connectivity. He was instrumental in developing Frost & Sullivan's Fleet & Leasing practice globally and was also a core team member that introduced and developed the iFrost platform.

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