The future of subscriptions – with a sting in the tail
Car subscription models have been gaining popularity in recent years as an alternative to traditional car ownership. The idea behind car subscriptions is that instead of buying a car outright, you pay a monthly fee to have access to a car or a fleet of cars. The subscription typically includes all the costs associated with owning a car, such as insurance, maintenance, and repairs. As we look to the future, it’s clear that car subscription models will continue to evolve and grow in popularity. In this blog, we’ll explore some of the trends and changes that we can expect to see in the car subscription industry in the coming years.
One trend that we’re likely to see is an increase in the number of car subscription services available. Currently, there are a handful of major players in the industry, such as Volvo’s Care by Volvo, Audi Select, and Porsche Drive. However, as the market grows and more consumers become interested in car subscriptions, we can expect to see new entrants into the market. This increased competition will likely lead to more affordable and diverse subscription options for consumers.
Another trend that we’re likely to see is a shift towards electric and autonomous vehicles. As electric and self-driving cars become more common on the roads, we can expect car subscription services to incorporate these vehicles into their fleets. Electric cars are already being used in subscription services such as Book by Cadillac and Care by Volvo. Autonomous vehicles are also being tested in subscription models by companies such as Cruise and Waymo.
In addition to electric and autonomous vehicles, car subscription services are likely to incorporate other technologies that improve the driving experience. For example, we may see subscriptions that include access to in-car entertainment systems, advanced safety features, and connectivity features that allow drivers to control their car from their smartphone.
As car subscription services become more popular, we may also see changes in the way that car dealerships operate. Currently, car dealerships make a significant portion of their revenue from selling cars outright. However, as more consumers opt for car subscriptions, dealerships may shift towards offering subscription services themselves. This would allow them to continue to generate revenue from their customers while also adapting to changing consumer preferences.
Finally, we can expect to see car subscription services become more personalised and flexible. Currently, most subscription services offer a limited selection of vehicles and subscription options. However, as the industry grows, we can expect to see more personalised subscription packages that cater to individual needs and preferences. For example, a subscription service may offer a range of vehicles that are tailored to specific lifestyles, such as families or outdoor enthusiasts.
In conclusion, the future of car subscription models is bright. As the market grows and technology improves, we can expect to see more affordable, diverse, and personalised subscription options. We may also see changes in the way that car dealerships operate, as they adapt to changing consumer preferences. Ultimately, car subscriptions offer a flexible and convenient alternative to traditional car ownership, and we can expect to see them become even more popular in the years to come.
Now a confession… If you’ve enjoyed the blog so far, that is actually a bit concerning, because it was generated by AI, specifically ChatGPT. Those who have read my blogs before and know ICDP research would perhaps be scratching their heads a little, because the general point of view is more positive around subscriptions and some of the specific points like self-driving cars and the affordability of subscriptions compared to ownership. It therefore reflects the views expressed on the English-speaking (therefore predominantly US) internet so lots of consulting white papers and postings by car subscription fans, as well as US examples.
I understand that with later releases, I would be able to point the AI to my own blogs and the ICDP research materials and it would be much more attuned with our thinking, though probably without the added research or anecdotes that I try to include each week. Would that be ‘fit for purpose’? I suspect not. Based on the feedback I get, the fact that the commentary is a bit more personal and linked to conversations or meetings I have had, or articles I have read, is what makes it stand out compared to materials written by people who are not as close to what is actually going on.
Does that mean that AI is not yet ready for deployment in automotive retail? Absolutely not! Using AI to analyse large volumes of data and detect trends is already here. It is relevant to both new and used car sales in respect of demand trends, and therefore how this should affect what you build or buy, and at what price it can be sold, in which markets. Like my blogs, it might still get caught out by a forthcoming change that is not in the data, such as tax changes that affect the future demand for particular types of cars or powertrain. That would still require manual intervention or a next level of AI that links data trends to qualitative searches of relevant media and publications.
We are also already at the point where AI such as ChatGPT may be relevant to describe the features and third party views on a car to be included in a used car listing, or on a finance product. The results would not be unique, so might lack ‘personality’, but it would be as comprehensive as you chose it to be, and as factually correct as the original sources.
Taking these opportunities on board may not be today’s highest priority, but business managers and technology service providers should recognise that it is coming. Digitalisation is not only about the shop window offered to the customer, and the interactions between trading partners, but also about the value that can be derived from these digital processes to inform decisions and create content.