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The Shift in Automotive Sales: Embracing Car Subscriptions and Electric Vehicles, (from page 20220626.)

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Summary

The automotive industry is undergoing significant changes, moving from traditional dealership models to direct sales and car subscriptions. In Norway, dealership visits have drastically decreased, with consumers now often making decisions from home. As Europe shifts towards electric vehicles (EVs), new regulations aim to phase out gasoline and diesel cars by 2035. Car subscriptions, likened to ‘The Netflix of cars,’ cater to younger consumers who prefer flexibility and convenience over ownership. With a projected 20 to 30 percent of new cars sold via subscriptions by 2025, this model offers added services and allows consumers to test EVs without long-term commitments. Non-traditional players are also entering this space, highlighting the need for automakers to adopt subscription models to remain competitive in the evolving market.

Signals

name description change 10-year driving-force relevancy
Shift to Direct Distribution Automakers are moving towards direct sales models, bypassing traditional dealerships. Changing from dealership-centric sales to direct-to-consumer models. Dealerships may become obsolete, replaced by direct sales and digital platforms. Consumer desire for convenience and efficiency in the buying process. 4
Rise of Car Subscriptions Car subscriptions are gaining popularity as a flexible alternative to ownership. Transitioning from traditional car ownership to subscription-based models. Car ownership may decline significantly, with subscriptions becoming the norm. Younger generations prioritize flexibility and access over ownership. 5
Increasing EV Adoption The EU is promoting electric vehicles, with a ban on gasoline and diesel cars by 2035. Shifting from fossil fuel vehicles to electric vehicles due to regulatory pressures. Electric vehicles could dominate the market, transforming the automotive landscape. Environmental sustainability and regulatory compliance drive the change. 5
Consumer Empowerment through Subscriptions Car subscriptions empower consumers to make sustainable choices with lower barriers. From ownership models with high costs to flexible subscription services. Consumers will have easier access to EVs, enhancing adoption rates. Desire for sustainability and flexibility in transportation options. 4
Non-traditional Players Entering the Market Companies from outside the automotive sector are launching subscription services. From traditional automakers to diverse players offering mobility solutions. The automotive landscape could include diverse providers of mobility services. Competition and innovation from various sectors drive new offerings. 4

Concerns

name description relevancy
Shift from Traditional Ownership to Subscriptions The automotive industry’s shift from ownership to subscription models could disrupt traditional business structures and consumer habits. 4
Electric Vehicle Adoption Barriers Consumers have concerns about EV usage patterns and charging infrastructure, which may slow down the transition to electric vehicles. 4
Market Saturation and Competition An increase in subscription services may lead to market saturation, impacting pricing and service quality as competition intensifies. 3
Technological Evolution Risks The fast evolution of EV technology poses risks for consumers unsure about long-term investments in new technologies. 4
Non-Traditional Players Entering Market Non-automotive companies entering the car subscription market may disrupt traditional automotive business models and customer relationships. 3
Consumer Flexibility vs. Reliability While subscription services offer flexibility, they may compromise reliability and long-term satisfaction compared to traditional ownership. 3

Behaviors

name description relevancy
Direct Distribution Model The shift from traditional dealership networks to direct distribution methods like automaker-owned dealerships and online sales is gaining momentum. 5
Reduced Dealership Visits Consumers are visiting dealerships significantly less, with purchasing decisions increasingly made at home through online reviews and content. 4
Rise of Car Subscriptions Car subscription services are becoming popular as a flexible alternative to ownership and leasing, appealing to modern consumer preferences. 5
Subscription Economy in Automotive Younger generations prefer subscription models over ownership, leading to the emergence of car subscriptions akin to streaming services. 5
Bundled Services with Subscriptions Car subscriptions often include a range of bundled services like maintenance and insurance, enhancing consumer convenience. 4
Sustainable Mobility Choices Car subscriptions are empowering consumers to make more sustainable choices by lowering barriers to accessing electric vehicles. 4
Testing Electric Vehicles without Commitment Subscriptions allow consumers to try EVs without long-term commitments, addressing uncertainty about electric vehicle ownership. 4
Involvement of Non-Traditional Players Non-automotive companies like energy and insurance firms are entering the car subscription market, diversifying the mobility ecosystem. 4
Focus on Flexibility in Mobility Solutions Consumers are increasingly seeking flexible mobility solutions that adapt to their lifestyles, leading to a demand for diverse vehicle access. 5
Consumer-Centric Automotive Models Automakers are adopting consumer-centric approaches by offering tailored mobility solutions that foster long-term relationships. 5

Technologies

name description relevancy
Direct Distribution Models Shifts from traditional dealership networks to direct sales channels like automaker-owned dealerships and digital platforms. 4
Electric Vehicles (EVs) Growing adoption of electric vehicles, driven by EU regulations and consumer preferences for sustainability. 5
Car Subscriptions Flexible car usage model allowing consumers to subscribe rather than own, with options for additional services. 5
Digital Customer Experience in Automotive Enhancements in the buying experience through digital platforms and online reviews influencing consumer decisions. 4
Sustainable Mobility Solutions Innovative approaches to mobility focusing on sustainability and flexibility, appealing to modern consumers. 5
Subscription Economy in Automotive Emergence of subscription-based services in the automotive industry, aligning with consumer trends toward pay-as-you-go. 4

Issues

name description relevancy
Shift to Direct Distribution Models Automakers are moving towards direct sales, reducing reliance on traditional dealership networks, impacting consumer purchasing behavior. 5
Rise of Car Subscriptions Car subscription services are becoming popular, providing flexibility and appealing to younger consumers’ preferences for access over ownership. 5
Transition to Electric Vehicles (EVs) The automotive industry is rapidly shifting towards electric vehicles, driven by regulatory changes and consumer demand for sustainable options. 5
Consumer Uncertainty about EVs Consumers face uncertainty regarding EV technology, charging infrastructure, and new market entrants, impacting their purchasing decisions. 4
Non-Traditional Players in Mobility Non-automotive companies are entering the car subscription market, leveraging their existing customer bases and expertise in service-oriented business models. 4
Bundled Mobility Services Car subscriptions often include additional services like maintenance and insurance, enhancing the overall consumer experience and value proposition. 4
Sustainable Mobility Trends Car subscriptions are facilitating a shift towards sustainable mobility choices, appealing to environmentally conscious consumers. 4