The automotive subscription services market size is expected to reach over US$50.8 billion by 2028. The market is witness to significant growth owing to the increasing demand for flexibility to choose a wide range of vehicle models at a fixed cost for a shorter period of time. In the past years due to cost-effectiveness and convenience associated with the subscription services has increased the demand for automotive subscription services market. The Automotive Subscription Services report further mentions that the market size stood at US$ 3.2 billion in 2019, and it is likely to exhibit a CAGR of 41.2% during the forecast period 2020 to 2028.
The Increasing Demand for Automotive Subscription Services
Demand for automotive subscription services is increasing due to the choice of a wide range of fixed-cost vehicle models over a shorter period of time. Demand for automotive subscription services has increased significantly in recent years due to the cost-effectiveness and convenience of subscription services. In the automotive subscription service, customers do not have to pay any additional vehicle insurance and maintenance charges along with roadside assistance. Customers these days are demanding a number of additional services, which are expected to see a huge increase in the automotive subscription services market over the 2020-2028 forecast period.
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Increased prevalence of Subscription Services
Increased vehicle prices, in addition to additional maintenance and insurance costs, allow consumers to opt for vehicle subscriptions. Low financial liability equal to vehicle subscription compared to vehicle ownership is contributing to market demand. Automotive subscription services also allow consumers to differentiate between multiple vehicle models during the subscription period. Nowadays, some markets are providing consumer subscription services as a result of consumers buying products that they want to purchase. Similarly, in the automotive industry, consumers prefer to purchase high-cost vehicles on subscription services that cannot be afforded due to the high cost of these vehicles. Demand for the automotive subscription services market is expected to increase during the forecast period.
Alchemy Research and Analytics LLP had taken the impact of the ongoing COVID-19 pandemic on the Automotive Subscription services market for the year 2020 and 2021. As per our extensive secondary and primary research, the demand for automotive subscription services has decreased in the COVID-19 period owing to sudden lockdown and consumer’s preference to not spend much amount on unnecessary items. In the post-COVID-19 period, automotive subscription services will become more popular as consumers will prefer personal vehicles to public transportation. The automotive subscription services market is expected to rise in the forecast period.
Key Manufacturers Aim to Enhance Their Portfolios by Partnerships
According to Alchemy Research and Analytics major market players in the automotive subscription services market are focusing on strategies such as partnerships, collaboration, acquisitions, and mergers to enhance their geographic presence as well as product portfolio. The automotive subscription services market is highly fragmented.
key market players in the automotive subscription services market. They are as follows:
- AB Volvo
- BMW AG
- Cox Automotive Inc.
- Daimler AG
- Mercedes Benz
- Fair Financial Corp.
- Flexdrive Services LLC
- General Motors Co.
- Hyundai Motor Co.
- Tesla Inc.
- Volkswagen AG
A Significant Industry Development-
- February 2020: Mercedes Benz added automaker’s high-performance AMG models in its collection subscription services. Subscribers to this tier will get access to 11 models, including sedans, coupes, roadsters, and SUVs “powered by AMG’s signature handcrafted V8 engines.
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Further Report Findings-
North America accounted for the highest share in the global automotive subscription services market in 2019 due to well established automotive industry in the region along with the presence of the key players in the region.
Europe is expected to see a significant market share in the automotive subscription services market due to the significant proliferation of subscription services and the presence of major automotive manufacturers/manufacturers such as AB Volvo and Volkswagen.
Based on the subscription period, the global automotive subscription services market is divided into 0-6 months, 6-12 months and more than 12 months The 0-6 months category accounted for the highest share and accounted for more than 40% of the market revenue share in the same year. This is attributed to the growing popularity among consumers for short-term vehicle rental services worldwide.
Market Trends
The major trend of the market is the increasing usage of smartphones and internet penetration is driving market growth. Market players are developing advanced automotive electronics components by adopting machine learning and artificial intelligence. In the future, the demand for subscription services is expected to rise due to technological advancement in the automotive industry. The availability of subscription services will facilitate affordability for customers. Software aggregators and third-party service providers together with manufacturers are introducing subscription services. These are the major trends due to which the market is expected to grow in the forecast period.
Market Drivers
One of the major factors which are driving the growth of the automotive subscription services market is providing a wide range of vehicles under a single subscription service. Technological advances in automobiles, growing demand for car leasing services, rising penetration of third-party, automotive subscription service providers are other drivers that boost the market growth. Stringent government regulations regarding emission control, lack of proper public transportation infrastructure in developing countries, and due to COVID-19 impact the market is expected to grow throughout the forecast period.
Market Challenges
The major challenges in the automotive subscription market are inadequate transportation infrastructure and high monthly charges for the short-term subscription which is estimated to hamper the growth of the global market.
This report answers key questions such as
- What are the challenges in the automotive subscription services market?
- What are the factors anticipated to drive the automotive subscription services market?
- What are trends, restraints, and challenges in the automotive subscription services market?
- Who are the potential customers of the automotive subscription services market?
- Analysis of key strategies by key market players?
- Which region is growing rapidly?
- How do rapidly changing consumer perspectives will affect the automotive subscription services market?
- How is the competitive environment?
- Comprehensive details of factors that will challenge the growth of the market pre & post-COVID-19.
- How are collaborations evolving in the market?
- What is the customer sentiment about this market?
- What are the solutions to the challenges?
- What are the opportunities in this market?
- What are the key current & upcoming technological trends estimated to drive the markets?
- Regions & segment-wise analysis of how various industries will perform?
- Forecasts on how market drivers, restraints, and future opportunities will affect market dynamics?
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