The automotive industry is undergoing a major transformation, with the traditional distribution model being replaced by direct distribution methods like automaker-owned dealerships and digital sales. In Norway, the number of dealership visits when purchasing a car has significantly reduced, with consumers now making decisions at home while watching carwow reviews on YouTube. Europe is embracing electric vehicles (EVs) at a fast pace, with new proposals to ban the sales of gasoline and diesel cars starting in 2035. To encourage consumer adoption of EVs, car subscriptions have emerged as a supplementary business model that appeals to younger generations who are accustomed to subscribing to services. This model digitizes the customer experience, bundles services, and is expected to have a substantial impact on the automotive industry. Car subscriptions offer flexibility, additional services, and empower consumers to make sustainable choices, contributing to the shift from car ownership to usership and lowering barriers to EV adoption. Non-traditional players in the industry, such as energy, insurance, and telecommunications companies, are also entering the car subscription market to capitalize on the evolving mobility ecosystem. Implementing car-subscription programs can provide automakers with a competitive advantage in this rapidly changing industry.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Direct distribution replacing traditional model | Distribution model shift | Automaker-owned dealerships, pop-up stores, digital sales | Increasing consumer demand for convenience and efficiency |
| Decrease in dealership visits when purchasing a car | Shift in decision-making process | Consumers make decisions at home, rely on online reviews | Advancements in technology and increased accessibility to information |
| EU proposal to ban sales of gasoline and diesel cars | Shift towards electric vehicles | Majority of new cars sold will be electric | Push for environmental sustainability and reduction of carbon emissions |
| Rise of car subscriptions | Alternative to vehicle ownership | Car subscriptions become more popular and common | Consumer preference for flexibility and subscription-based services |
| Car subscriptions drive sustainable choices | Shift towards sustainable mobility | More consumers choose EVs through car subscriptions | Focus on environmental consciousness and ease of access to EVs |
| Non-traditional players entering car subscription market | Expansion of car subscription offerings | Energy, insurance, and telecom companies launch their own concepts | Desire to capitalize on the growing mobility ecosystem and access end-users |
| Car-subscription programs as a competitive advantage | Automotive industry adaptation | Automakers gain competitive edge through car subscriptions | Need for automakers to stay relevant and meet changing consumer demands |