By Greg Moran
One of India’s largest car subscription marketplaces at present claims 12% of the total urban passenger car units moved per year. In terms of numbers, it trails only the industry leaders and incumbents like Maruti Suzuki and Hyundai. The subscription marketplace has been successful in establishing a new category in the mobility mix, i.e. vehicle subscriptions.
Owning a car used to be a cherished dream, a status symbol. Times, however, have changed, and people today adopt a pragmatic approach more suited for current circumstances.
Enter vehicle subscriptions. The hitherto non-existing category is disrupting the status quo in terms of mobility and has been met with a raving response from the users. It dwells on the consumer psyche of ‘accessibility over ownership’ and has emerged economically as a more viable option, both for consumers and automakers.
In consumers’ kitty: With subscriptions, consumers have hassle-free access to cars of their choice, without any fine-print or hidden costs. It puts forth mobility as a service that is made easily accessible, whenever the need arises. With players like Nissan, Toyota, VW, Renault, Mahindra and Tata joining the subscription bandwagon, consumers are spoilt for choice.
For OEMs, subscriptions are in vogue: The country’s leading demographic has shown a higher proclivity for accessibility over ownership. Subscriptions are in vogue, right from music, movies, housing or office spaces, to even furniture. With car subscriptions, OEMs are witnessing a demand for their offerings, despite the industry slowdown.
Diversifying outreach: Earlier, as owning a car was deemed a status symbol, OEMs would typically target the more affluent class of users, but this ‘SEC A’ audience hardly comprises 10% of the total population. Subscription platforms, however, break down the entry barriers to car ownership like vehicle loans and down payments, high maintenance and servicing costs, etc. With such threshold investment out of the picture, owning a car is no longer a financially-intensive endeavour for an average Indian household.
A ripe market opportunity: Car subscriptions present us with an opportunity to reverse the industry slowdown and leverage cutting-edge technology to transform a majority of non-intending users into long-term customers. India’s growing digital base, having already crossed the 500-million mark, constitutes a glorious potential for such services. When used at scale, the service can change the face of the auto industry, influencing consumer behaviour through hassle-free solutions.
The author is CEO & co-founder, Zoomcar
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