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Analysis: Will Subscription Model Disrupt Dealership Realm?

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Jan. 26, 2018—Some OEMs are experimenting with subscription-based services in an effort to capture modern consumers who are shunning vehicle ownership. But will it work? Will subscription-based services help OEMs get ahead of a potential business downturn? That question was examined in a recent Stock Investor article.

The U.S. population is shifting somewhat, toward urban living, and younger generations are delaying getting driver’s licenses. Due in part to those factors, automakers are examining new ways to capture additional revenue through non-traditional sales channels.

Peugeot SA, for example, is using its Free2Move ride-sharing service as a means to re-enter the U.S. market after more than 20 years away. Other companies, like Volvo, Porsche, and Volkswagen, are experimenting with a subscription-based model, which allows customers to sign up and pay a monthly fee for access to a fleet of manufacturers vehicles.

If the pilot subscription programs are successful, noted, those subscription setups could disrupt the auto industry in the same manner that Netflix altered how consumers watch television. So, stay tuned as Fixed Ops Business continues to examine the trend.

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