Car Subscription Market Outlook, Size To 2030

(MENAFN- Straits Research) Vehicle subscription is the alternative to car-as-a-service offerings and the central car leasing and rental services solution. A car subscription is a way of service that represents a new car ownership model, with fees mainly covering insurance and maintenance costs. Typically, the duration of a car subscription is between one month and two years. A car subscription is a service option that bridges car rental and car leasing and has advantages over both. In addition, car subscriptions require frequent vehicle exchanges and other vehicle expenses, including insurance and maintenance, that are the service provider's responsibility. Original equipment manufacturers (OEM) and their captives are essential to the global car subscription business, while independent service providers collaborate and develop products to gain a competitive edge.
Car subscriptions will increase in popularity shortly because of their benefits, including short-term mobility solutions, new-age commute alternatives, and lower vehicle expenses. Most urban commuters prefer car subscription since it allows for several vehicle swaps and is considerably simpler than lease options. It is projected that the adaptability, affordability, and ease of car subscription and its advantages over leasing will stimulate car subscription market growth. However, the well-established and dominant character of the car leasing, rental, and sharing industry and the fact that the leasing model is more cost-effective than subscription schemes prevent the sector from expanding. The advancement of the global car subscription market is likely to be affected by several factors, including the formation of strategic alliances with automakers to gain a competitive advantage, the development of a robust digital platform to efficiently operate the services, and the expansion of the dealer network to reach more customers or provide services more efficiently.
Market Dynamics
The Flexibility, Affordability, and Benefits Over Leasing to Drive the Global Car Subscription Market
A car subscription is a limited-term contract option for car ownership that does not include maintenance or insurance fees. In addition, according to the service provider-consumer contract, a car subscription allows for multiple car exchanges. In recent years, car subscription has gained popularity as a hybrid alternative to car rental services and car leasing options, with several advantages over these two services. In addition, a car subscription provides flexibility in picking and swapping car models and a one-month to two-year periodical duration. Consequently, millennials are attracted to the flexibility of automotive subscription, which offers a cost-effective alternative to car-as-a-service in the short term. Soon, it is anticipated that the advantages of automobile subscription over car leasing and car rental services would enhance demand for car subscriptions.
Vehicle leasing is less expensive than car subscription services over the long term. However, auto subscription has advantages over car leasing. Unlike car leasing, car subscription involves the multiple switching subscribed cars under specified predetermined terms. In addition, car leasing incurs other costs, such as maintenance, repair, insurance, license, and tax payments. All of these costs are handled by the service providers for car subscriptions. In addition, the contract duration in car leasing is lengthy but seldom exceeds two years, allowing for short-term usage and simple vehicle replacement. It is anticipated that the demand for car subscription services has increased in recent years due to these advantages over automotive leasing services.
Regional Insights
Europe will command the regional market with a share of USD 7,113 million and a CAGR of 22% by 2030. Due to car subscription services and the outlook for shared mobility, the Europe car subscription market is expected to have the largest share and grow significantly over the forecast period. The market for car subscriptions was created to bridge the gap between new on-demand ride-hailing services and traditional contracts or long-term lease arrangements. In addition, market participants in the European market for car subscriptions are creating technologically advanced service platforms to capitalize on the sector's potential for long-term business. In addition, to take advantage of the numerous commercial prospects available in Europe, several businesses are beginning to enter the European market independently or in partnership with local businesses.
North America is expected to generate a share of USD 6,799 million with a CAGR of 24.4% during the forecast period. The increasing demand for intelligent mobility solutions and the rising environmental consciousness among consumers are the major forces propelling expansion in the car subscription market in North America. It is projected that investments in developing intelligent city regions, improvements in fleet management across all forms of transportation, and a shifting attitude toward shared mobility would all create an appealing potential for the market for car subscriptions. The regional expansion is a result of an increase in the demand for urban mobility solutions that are more effective, developments in technology, and concerns regarding the safety of both drivers and vehicles. The most influential market participants employ a wide range of strategies to strengthen their position in the industry. They are also continuously involved in product development to suit the ever-changing requirements of the end customer and attain a competitive edge in the market.
Asia-Pacific is expected to grow with the highest CAGR of 27.4% during the forecast period. The rising acceptance of smart mobility solutions, the developing subscription economy, and the growing usage of automobiles as a service are the primary factors driving the growth of the car subscription market in the Asia-Pacific region. India, China, and other nations in the Asia-Pacific region are the key development drivers due to a growing preference for shared mobility, a transforming transportation attitude, and rising urbanization. The concept of car subscription is still relatively new in the Asia-Pacific region. As a result, user knowledge of the service is a barrier to expanding the industry. It is expected that the region will display stratospheric growth due to the evolving mobility landscape in the Asia Pacific, consumers' changing views toward the purchase of automobiles, and the costs associated with car ownership. The idea of car subscriptions has been implemented by market players in Asia-Pacific for the past three to four years, and it has since gained widespread support from end consumers in that region.
Key Highlights

The global car subscription market had a share of USD 2,952 million in 2021, which is expected to advance and reach USD 15,567 million with a CAGR of 23.1% during the forecast period.
Based on the service provider, the independent/third party segment will generate a market share of USD 13,642 million with a CAGR of 24.7% during the forecast period.
Based on vehicle type, IC-powered vehicles are expected to hold a share of USD 14,105 million with a CAGR of 22.6% during the forecast period.
Based on end-use, the corporate segment will likely hold a market share of USD 10,200 million with a CAGR of 23.2% by 2030.
Based on the subscription period, 6 to 12 months' subscription is expected to have a share of USD 13,389 million with a CAGR of 24.5% by 2030.
Based on regional analysis, Europe is expected to hold a share of USD 7,113 million with a CAGR of 22%.

Competitive Players in the Market

Daimler AG
Drover Limited
Facedrive Inc.
Fair Financial Corp.
OpenRoad Auto Group
Porsche AG
Prime mover Mobility Technologies Pvt Ltd.
The Hertz Corporation
Toyota Motor Corporation
Volvo Car Corporation

Market News

In 2022, Facedrive Inc. announced its plans for a corporate name change to "Steer Technologies Inc."
In 2022, Porsche AG presented the first edition based on its electric sports car named the Porche Taycan GTS Hockenheimring edition.

Global Car Subscription Market: Segmentation
By Service Provider

OEM/Captives
Independent/Third Party Service Providers

By Vehicle Type

IC Powered Vehicle
Electric Vehicle

By End-Use

Private
Corporate

By Subscription Period

1 To 6 Months
6 To 12 Months
More Than 12 Months

By Region

North America
Europe
Asia-Pacific
LAMEA

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