Car subscriptions are gaining momentum

Car subscriptions are gaining momentum

First of all: The pandemic, microchip shortages and logistics problems continue to have a dramatic impact on the industry. The last two years have been atypical, and if analysts are to be believed, there will be delivery delays for another year. At the same time, the home office has become established across the board - and thus mobility has changed. Less commuter traffic relieves the burden on the environment, but also ensures a reorganization of the mobility market. On the one hand, the car has become more important because people are isolated, and at the same time people drive less - mobility has declined. The winner of this process is the car subscription. 

Actually a logical conclusion: Nobody knows when mobility will pick up again, so expensive purchases are postponed (or are not possible anyway due to ongoing delivery bottlenecks), and at the same time end customers have more flexibility with the car subscription - including when it comes to costs. 

An analysis of the German market by the Faaren Group, a software provider for car subscriptions, and a study by HPP Strategie- und Marketingberatung, which examines the entire DACH region, show how strong the trend towards car subscriptions is. The raw numbers are particularly exciting: According to HPP, only five percent of those surveyed were interested in or used a car subscription in 2020. In 2021 it was already 23 percent - almost a quarter of all respondents (plus 18 percentage points in just one year). No other mobility offer has grown as significantly as car subscriptions. According to HPP, the largest car subscription provider in the DACH region is ViveLaCar, ahead of Fleetpool and Faaren. Exciting: 42 percent, the clear majority of car subscription users surveyed, were previously car buyers. 25 percent didn't have a car before and 28 percent had a leasing contract. 
 

The Faaren Group provides more insight: The average subscription rate per month is 530 euros (everything included except for electricity, fuel and parking fees). The average duration is 13 months and packages of up to 1,250 kilometers per month can be booked. Not surprisingly, the most popular car brand at Faaren is Volkswagen, and the most popular model is the VW Golf. Two details are interesting: the most popular vehicle category is the small car and the most popular fuel variant is the classic gasoline engine. Almost three quarters of all subscribers choose an automatic transmission. And somewhat surprisingly: the most popular electric car brand is Smart. Just over 28 percent have already decided on an electrified vehicle. 
 

In detail, Faaren's figures are even more exciting: a good 50 percent of customers book subscriptions with rates between 250 and 499 euros. Followed by the price category 500 – 749 euros of 26.4 percent. The average value is also not very meaningful when it comes to terms: Most customers (34.5 percent) choose a subscription duration of just six months. The second most popular duration is an impressive 36 months (14.6 percent), closely followed by twelve months, which 14 percent of customers choose. And a good fifth of customers are already choosing an electric car, almost on a par with diesel vehicles. 

Every second customer chooses a petrol engine. The figures for the ratio of new and used cars are surprising: almost two thirds prefer a used car in the subscription model, while only just under 36 percent subscribe to a new car. The ratio of private and commercial customers is hard to believe: While commercial customers have been the most important customer group on the new car market for years, according to Faaren, 76.7 percent of their subscribers are private individuals and only 23.3 percent are commercial customers. On average, companies with a monthly rate of 642 euros spend significantly more than private individuals who invest 496 euros per month.
 

Both HPP and Faaren predict a further steep increase in the car subscription business model. Faaren is based on a forecast from the Duisburg CAR Center and estimates that up to 40 percent of sales in 2030 will be subscriptions. HPP adds differently: There will be further diversification in the car subscription market through new companies entering the market, and the competitive situation will intensify. And as we all know, competition stimulates business. (red)