Car Subscriptions Are Changing the Automotive Business Landscape

As business models are disrupted left and right with the advent of digital technology, the businesses that are able to adapt themselves to a digital transformation will be the first to enjoy increased revenue, profitability, and market capitalization. Moving into 2018, many global companies--automotive manufacturers included--have digital transformation at their crosshairs. One particular transformation making waves across the industry is the idea of car subscription.

Car subscription is being touted as an alternative to buying or leasing a car. With it, subscribers only have to pay a monthly fee to drive a car--no more worrying about insurance, maintenance, depreciation, interest fees, etc. Subscribers even have the option of driving a different car after a few months.

Moving away from car buying and leasing may seem like a gargantuan business model shift, but it's actually in-line with consumer's changing preferences. People already subscribe to apps such as Netflix and Spotify so car subscriptions are a natural progression. Over the past year or so, many car brands--luxury ones especially--have been rolling out car subscription services at a rapid pace. Below are some of the car subscription services that are already existing, along with the monthly fees you may expect to pay:

• Care by Volvo – USD650/month
• Porsche Passport – USD2,000/month
• Audi Select – USD1,395/month
• Access by BMW – USD2,000/month
• Lexus Complete Lease – to be announced
• Carpe by Jaguar Land Rover – USD1,200/month
• Mercedes-Benz Collection – USD2,000/month

Granted, the subscription plans are expensive, but that's because you’re paying for much more than just the car. As this particular method to car ownership grows in popularity, would you consider it over buying or leasing instead?