Mover over EMIs
Till now you have either owned a car or hired one. Now, you are free to "subscribe" for a car. With rising fuel costs, interest rates as well as rapidly depreciating value, four Indian automobile makers are hoping to survive the downturn with the subscription model.
You just have to pay for fuel
This model allows you to own a brand new vehicle at zero down payment but just a fixed monthly subscription fee and the fuel cost. Car companies take care of insurance, road tax, and maintenance.
Who all are offering this service
Amongst the early entrants for this model are Hyundai, followed by VW, Nissan, and MG Motors. Mahindra will launch soon with Revv and Maruti Suzuki and Tata Motors too are firming up plans.
Boon to struggling auto industry
For the car company, not only is it a natural extension, it adds another revenue stream of mobility-as- a- service and opens up a whole new set of customers who get to experience the new set of offerings at a very early stage of their life and career.
This service comes as a breath of fresh air for the beleaguered auto industry which is going through one of its worst phases in over two decades. This new purchase option of the subscription model for passenger vehicles which auto companies are embracing to not only uplift sales but also to give a different experience to the discerning customer.
Ease of ownership
New age car owners are looking for hassle-free access to ownership instead of wanting to deal with a higher cost of ownership that new cars bring. This model is becoming particularly popular with the millennials who prefer an asset-light lifestyle, flexibility, and affordability at the same time.
Benefits of this model
The benefits of a subscription to the customers include total convenience, zero down payment, no hefty road tax, zero risks on the resale value of the vehicle and a fixed amount inclusive of maintenance cost. One has the flexibility to change the vehicle model whenever he/she wants and continue the same subscription across cities.
Car companies expect the complete experience of choosing and owning a car to undergo a transformation. Leasing is only a financial solution which addresses a part of the ownership hassle i.e. no down-payment, whereas Nissan is bringing a complete ownership solution by allowing customers to subscribe to Kìcks model with a minimum lock-in period.
News Source: Economic Times, Url: https://bit.ly/2MIKdWi