The vehicle subscription market allows users to pay a fixed monthly fee for the use of a vehicle and its maintenance services, without long-term obligations like ownership. Customers can opt for a variety of makes and models within their budget through monthly packages that offer insurance, maintenance and roadside assistance. This subscription model provides flexibility to switch between cars or take breaks without any down payments or cancellation penalties.
The Global Vehicle Subscription Market is estimated to be valued at US$ 4.52 Bn in 2024 and is expected to exhibit a 34.% CAGR over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in The Vehicle Subscription Market are Arval BNP Paribas, Avis Budget Group, Carvolution, EZOO., LeasePlan, Lyft Inc., Mercedes-Benz Mobility, Orix, SIXT, The Hertz System, Inc., Volkswagen, Volvo Car Corporation, Flexdrive , Cluno GmbH, Myles , MARUTI SUZUKI INDIA LIMITED, Autoflex, General Motors, Upshift, inc., LMP AUTOMOTIVE HOLDINGS, INC. The growing preference for using vehicles without expensive upfront ownership costs and the flexibility to change vehicles frequently is boosting demand in the market. Major automakers are partnering with various subscription service providers and expanding their offerings globally to tap the increasing demand.
Market key trends
Sustainability is one of the major trends in the vehicle subscription market. Such programs allow increased vehicle utilization and avoid sitting idle unlike personal ownership models. This reduces waste and emissions. Moreover, subscription services provide customers the option to easily switch to electric vehicles with monthly upgrades offered by OEMs and independent providers. The flexibility to try out new technologies and participate in the green mobility transition is driving many individual customers as well as fleet owners towards subscription models.
Porter’s Analysis
Threat of new entrants: New entrants face high initial investment cost to enter this market due to requirement of large fleet of vehicles.
Bargaining power of buyers: Buyers have high bargaining power as they can choose from multiple service providers in the market offering vehicle subscription services.
Bargaining power of suppliers: A few large vehicle manufacturers like MARUTI SUZUKI INDIA LIMITED supply vehicles to subscription service providers, giving them some bargaining power.
Threat of new substitutes: Alternative options like vehicle leasing, rental, and owned vehicles pose threat of substitution.
Competitive rivalry: Intense competition exists among existing vehicle subscription service providers.
Geographical Regions
North America accounts for the largest share of the global vehicle subscription market in terms of value. U.S. contributes significantly to the North America vehicle subscription market owing to presence of major subscription service providers and wide acceptance of vehicle subscription among customers.
Asia Pacific region is expected to witness fastest growth in the vehicle subscription market during the forecast period. Emerging economies like India and China are anticipated to offer lucrative opportunities for expansion of vehicle subscription services attributed to growing mobility needs and rising disposable income.
