Vehicle subscription is a service in which consumers pay monthly fees in return for access to a variety of vehicle models. In a vehicle subscription service, the consumer can subscribe to one or more vehicles. The monthly fees includes vehicle insurance, roadside assistance, and maintenance. Generally, subscription services are provided by vehicle manufacturers. Vehicle subscription is similar to vehicle leasing, the only difference being that, in subscription services, the subscriber does not have to worry about maintenance, road side assistance, and service expense of the vehicle.
The global vehicle subscription market is primarily driven by the lower cost of subscribing for a vehicle as compared to that of owning or leasing one. Moreover, in a vehicle subscription service, consumers can avail a variety of vehicle models, such as sedan, SUVs, and crossovers. Easy access to luxury and premium vehicles at a significantly lower cost, is driving the global vehicle subscription market. Owning a vehicle can be expensive in terms of cost of vehicle, insurance, maintenance, servicing, and component change. All these expenses are eliminated in the vehicle subscription service, which in turn is propelling the global vehicle subscription market. Rising consumer awareness coupled with presence of subscription service providers is another prominent driver of the global vehicle subscription market.
Major restraint to the global vehicle subscription market is the well-established vehicle leasing, rental and sharing market. A large number of vehicle leasing, rental, and shared mobility service providers are operating across the globe and hence, vehicle leasing and sharing services have a strong foothold across the globe. This, in turn, is restraining the global vehicle subscription market.
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The global vehicle subscription market can be segmented based on service provider, vehicle type, subscription type, and region. In terms of service provider, the global vehicle subscription market can be bifurcated into OEM and private service providers. The OEM segment is expanding, as several vehicle manufacturers are offering vehicle subscription services. OEMs can provide vehicle subscription services much easily due to the availability of several vehicles.
Based on vehicle type, the global vehicle subscription market can be classified into four segments. SUVs, especially premium and luxury class, are highly popular in the global vehicle subscription market, which is attributed to their comfort and convenience. Moreover, SUVs are being preferred for providing commercial services as well and hence, the demand for SUVs is likely to rise during the forecast period. In terms of subscription type, the global vehicle subscription market can be bifurcated into one vehicle subscription and multi-vehicle subscription. Multi-vehicle subscription service provides access to several models of vehicles for a specific time-period.
In terms of region, the global vehicle subscription market can be segmented into five regions. Asia Pacific comprises rapidly developing countries such as China and India. These countries have large populations with rising disposable income of individuals, which in turn is boosting the demand for vehicles across the region.
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Lower cost of vehicle subscription services coupled with rising awareness about subscription services is leading to shift in consumer preference toward vehicle subscription, as compared to that of owning a vehicle. Therefore, demand for vehicle subscription services is likely to rise in Asia Pacific. North America and Europe are leading the global vehicle subscription service market, due to the presence of several vehicle subscription service providers in these regions.
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