VEHICLE SUBSCRIPTION MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Vehicle Subscription Market Size and Trends

The vehicle subscription market is estimated to be valued at USD 4.52 Bn in 2024 and is expected to reach USD 35.49 Bn by 2031, growing at a compound annual growth rate (CAGR) of 34.2% from 2024 to 2031.

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The vehicle subscription market is expected to witness significant growth over the next few years. The rising preference of consumers towards flexible all-inclusive plans and limiting large up-front costs associated with vehicle ownership are expected to drive the demand for vehicle subscriptions. Additionally, improving vehicle connectivity and frequent technology upgrades available in vehicle subscriptions are appealing to many consumers. As internet and technology penetration increases globally, newer regions are expected to adopt vehicle subscriptions, thus pushing market revenues higher between 2024 and 2031.

Changing Transportation Preferences

The automotive industry is undergoing significant transformation led by evolving customer preferences towards transportation. Younger customers in particular are less inclined to own a vehicle and deal with responsibilities of maintenance, insurance, and other recurring costs. With rising urbanization and focus on sustainability, many prefer the convenience and flexibility of accessing vehicles on demand. Vehicle subscriptions services directly address these changing needs by providing users alternative access to cars and related risks without long term commitments. The subscriptions allow customers to drive multiple makes and models based on their shifting needs and lifestyles. Users can easily upgrade, downgrade or cancel the memberships as per their requirements. The subscriptions also bundle insurance, maintenance and other costs into monthly or annual fee structures, taking away hassles of vehicle ownership. For some customers, the subscriptions even make financial sense as it may be cheaper than owning a vehicle after accounting for taxes, fees and other expenses over longer periods. Others value the freedom these services provide from responsibilities of asset possession. The subscriptions perfectly align with customers seeking short term access versus ownership as their transportation preference evolves with life stages. They are especially appealing to new drivers, millennial and Gen Z who care more about experiences than owning assets. Further, the ubiquitous availability, affordability and convenience factor has seen rapid adoption of subscriptions services in many cities worldwide, reflecting changing consumer attitudes towards personal mobility.

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The vehicle subscription space is on an incredible growth trajectory fuelled by the rapid integration of new technologies. Advancements in connectivity, electrification, autonomous driving, and analytics are seamlessly coming together to reshape the mobility landscape. Customers are increasingly demanding digital on-demand services with just a few taps on a smartphone. Subscription services are well placed to capitalize on these shifts by offering customers latest vehicles with sophisticated in-car infotainment systems, advanced driver assistance systems and soon even self-driving capabilities. Further, the ability to swap vehicles - upgrade and downgrade - allows customers to experience new innovations through the subscriptions on a continuous basis. Underlying technology platforms also allow aggregating big data for deeper customer insights, enabling personalized on-road experiences and services. Automakers are leveraging these insights to roll out over-the-air software updates, monitor vehicle health in real-time, and roll out new mobility features at scale through the subscription fleets. The services further compliment evolving mobility models such as MaaS and ride-hailing. Above all, advanced electrification will significantly extend vehicle life.

For instance, in February 2021, Hyundai, an automaker, expanded into the European MaaS market with the introduction of our Mocean Subscription service. Mocean Subscription is Hyundai’s global Mobility-as-a-Service (MaaS) brand. With no sign-up fee and a fully digital user experience, customers can enjoy a streamlined registration process from the first click to the handover of their car.