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The automotive subscription services market share is expected to increase by USD 4.95 billion from 2021 to 2026, and the market’s growth momentum will accelerate at a CAGR of 22.8%.
This automotive subscription services market research report provides valuable insights on the post-COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers automotive subscription services market segmentation by distribution channel (OEMs and dealerships or third party) and geography (North America, Europe, APAC, South America, and the Middle East and Africa). The automotive subscription services market report also offers information on several market vendors, including AB Volvo, Assurant Inc., Bayerische Motoren Werke AG, Cox Automotive Inc., Evogo Ltd, Exelon Corp, Flexdrive Services LLC, Freshcar, General Motors Co, Hertz Global Holdings Inc., Hyundai Motor Co., Mercedes Benz Group AG, Pinewoods technology services FZE, Prazo Inc, Tesla Inc., Toyota Motor Corp., Volkswagen AG, Wagonex Ltd, and Zoomcar India Pvt. Ltd. among others.
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Based on our research output, there has been an impact on the market growth during and post-COVID-19 era. The increasing smartphone and internet penetration is notably driving the automotive subscription services market growth, although factors such as high maintenance costs for service providers may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic's impact on the automotive subscription services industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Automotive Subscription Services Market Driver
One of the key factors driving growth in the global automotive subscription services market is increasing smartphone and internet penetration. Internet and smartphone penetration enables consumers to use online on-demand automotive subscription services with maximum share stemming. This allows manufacturers to expand their business by partnering with various stakeholders in the industry, such as dealers/third-party service providers and software aggregators, and establish their automotive subscription services. Moreover, increased internet connectivity, growing adoption of smartphones, and rising consumer awareness have contributed to the growth of e-automotive subscription services, thereby driving the demand for automotive subscription services globally. In addition, the rise in smartphone adaptability and access to the web domain has helped consumers book cars online through their mobile applications or any other platform offered by market players. People opt for automotive subscription services through mobile applications to commute for convenience rather than cost-effectiveness. Therefore, the convenience provided by the online platform and increasing awareness among consumers due to easy access to services through mobile phones are expected to drive the growth of the market during the forecast period.
Key Automotive Subscription Services Market Trend
The development of new mobility concepts is another factor supporting the global automotive subscription services market growth. To cater to the increasing demand for more flexible and sustainable transport systems, leasing companies are offering mobility systems. The new mobility concept helps in maximizing environmental compatibility and offers smart traffic management solutions. Therefore, enterprises are incorporating new mobility concepts with their automotive subscription services. Moreover, leasing companies depend on new technologies, such as integrated ticketing, smartphone applications, and in-car communications to create a package that offers customers the best possible choices for completing the ride. Subscription services have also been driving innovation in many other ways. Telematics was first introduced in subscribed vans to monitor their usage on the job. This has become increasingly popular as it helps companies to improve the efficiency and performance of their employees. Therefore, the rising provision of advanced systems and features by service providers will lead to an increase in the demand for automotive subscription services during the forecast period.
Key Automotive Subscription Services Market Challenge
High maintenance costs for service providers will be a major challenge for the global automotive subscription services market during the forecast period. High prices of testing and inspection create issues for service providers, as maintenance may have to be performed periodically. Furthermore, changes in government regulations and standards in the automotive industry directly affect car maintenance, the design of components, and safety features. As a result, these regulations generally increase costs for vendors. However, several laws, such as emission laws, affect a vendor's overall profit. As a result, many components of vehicles will have to be changed according to alterations in regulations and standards. Components such as catalytic converters, designed to reduce car emissions, are expensive to develop, test, and mass-produce. Moreover, as vehicles are exported to different countries, the regulations of other countries should be considered as well. This adds to services' cost and hampers the design process, as different criteria have to be met for a vehicle to be street-legal in different parts of the world. As these costs are included in the subscription fee, it is difficult for vendors to maintain their profit margins, which is expected to restrict the growth of the market during the forecast period.
This automotive subscription services market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global automotive subscription services market as a part of the global automotive components and accessories market within the global auto components market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the automotive subscription services market during the forecast period.
The report analyzes the market’s competitive landscape and offers information on several market vendors, including:
This statistical study of the automotive subscription services market encompasses successful business strategies deployed by the key vendors. The automotive subscription services market is fragmented and the vendors are deploying growth strategies such as providing vehicles at minimum automotive subscription services to customers to compete in the market.
To make the most of the opportunities and recover from the post-COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The automotive subscription services market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the automotive subscription services market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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47% of the market’s growth will originate from North America during the forecast period. US and Canada are the key markets for automotive subscription services in North America. Market growth in this region will be faster than the growth of the market in the European region.
A rise in automotive prices and regulations in the region will facilitate the automotive subscription services market growth in North America over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The outbreak of COVID-19 negatively impacted the growth of the automotive subscription services market in North America in 2020. The imposition of lockdowns led to the temporary shutdown of manufacturing units of automobiles in H1 2020. The initiation of the COVID-19 vaccination drives and the restoration of supply chain activities stabilized the growth of the market in H1 2021. Nonetheless, several automobile vendors are adopting different strategies to overcome the challenges caused by the COVID-19 crisis. For example, automotive subscription services for B2B customers are increasing in Mexico. As Mexico is one of the top holiday destinations in North America, the acquisition is expected to help in maximizing the automotive subscription service options for various cars, including luxury cars. Therefore, such strategies are anticipated to potentially boost the growth of the subscription services market in North America during the forecast period.
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The automotive subscription services market share growth by the segments. OEMs segment will be significant during the forecast period. Under this model, customers pay a monthly subscription fee to OEMs for access to several vehicles in its model lineup. In addition, the monthly fee covers insurance, maintenance, and roadside assistance. Such subscription service launches by established OEMs will help accelerate the growth of the global automotive subscription services market during the forecast period.
This report provides an accurate prediction of the contribution of all the segments to the growth of the automotive subscription services market size and actionable market insights on the post-COVID-19 impact on each segment.
Car Rental market - The market size is expected to be valued at USD 93.17 billion by 2026 with a progressing CAGR of 18.66%.
Online Language Subscription Courses market - The market size has the potential to grow by USD 3.14 billion during 2021-2025, and the market’s growth momentum will accelerate at a CAGR of 15.04%.
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Automotive Subscription Services Market Scope |
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Report Coverage |
Details |
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Page number |
120 |
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Base year |
2021 |
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Forecast period |
2022-2026 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 22.8% |
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Market growth 2022-2026 |
USD 4.95 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
14.73 |
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Regional analysis |
North America, Europe, APAC, South America, the Middle East, and Africa |
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Performing market contribution |
North America at 47% |
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Key consumer countries |
US, Japan, Germany, UK, and France |
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Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
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Key companies profiled |
AB Volvo, Assurant Inc., Bayerische Motoren Werke AG, Cox Automotive Inc., Evogo Ltd, Exelon Corp, Flexdrive Services LLC, Freshcar, General Motors Co, Hertz Global Holdings Inc., Hyundai Motor Co., Mercedes Benz Group AG, Pinewoods technology services FZE, Prazo Inc, Tesla Inc., Toyota Motor Corp., Volkswagen AG, Wagonex Ltd, and Zoomcar India Pvt. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Distribution Channel
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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