For years, automakers have been looking for business models beyond car sales to diversify their profit pools. The latest study „Will Car Subscriptions Revolutionize Auto Sales?“, published by the IAA MOBILITY Conference knowledge partner BCG, takes a look at the sharing economy and explains how car subscriptions could easily become a $30 billion to $40 billion market in ten years.
With the rise of the sharing economy and subscription services, from software-as-a-service to Spotify and Netflix to mobility services, it was only a matter of time before car subscriptions would arise. Vehicle subscription offerings from OEMs have been around for several years. But the market only recently has begun to gain traction with consumers and investors, as business models continue to evolve and an expanding pool of providers hone their formulas for competing.
In 10 years, car subscriptions could easily become a $30 billion to $40 billion market. For many OEMs, the results have been lackluster, yet some startups, particularly in Europe, have fared well. Does this mean car subscriptions are an improbable bet for the automotive industry? Or is it just a matter of time before the business model kinks are worked out? What will it take, in resources, capabilities, and strategy, to turn car subscriptions into a thriving part of the auto retail industry? And how are the different providers poised for advantage?
Boston Consulting Group’s Center for Mobility Innovation covers the new wave of mobility products and services that are moving beyond the automobile, including intermodal platforms, mobility services, public transportation, logistics services, and smart infrastructure. The center’s experts help municipalities and organizations envision innovative mobility solutions and put them in motion.