car subscription

‘Car Subscription’ is on a rise in India

The mindset of Indian consumers is changing with time. The pattern in the consumption of cars is also altering day by day. One can easily witness the shift in the consumer buying decision process. There is a sudden shift from traditional “buying or owning” towards  “leasing” and to the latest “subscribing”. Vehicle subscription is defined as a service where a customer pays a recurring fee for the right to use one or more automotive vehicles.  Car subscription makes car ownership and driving easy and hassle-free.

The trend of car subscription is growing among the middle-class youth, despite the common mindset of considering ownership of car as a status symbol. The reason for this growing trend lies in the basic flaws in the mobility and transport sector. Issuses such as congested roads, inadequate parking, volatility in fuel prices, high-interest rates, lack of credit history and rising insurance premiums are some of the reasons consumers are putting off their car buying decision. Thus, we Indians are moving away from the tradition of aspirational buying to need-based usage.

With the increasing trend of car subscription, there has been a decline in the sale of Passenger vehicles in recent years. As per the data available in the public domain, in the first ten months of 2019 alone, the top Indian cities have seen a lethargic growth in passenger vehicle demand. As reported by a leading economic daily, Delhi, Mumbai, Chennai, and Kolkata – the top four metropolitan cities that account for 11% of the country’s passenger vehicle market, witnessed a drop in the sales between 4% -12% from April 2018 to January 2019.

Subscribing a car has become flexible, economical and accessible. The lock-in period for car subscription extends a maximum of up to 3 months. The renewal amount for the subscription process decreases with each installment.

With the changes in the consumption pattern, automobile giants such as Hyundai, Nissan, Mahindra & Mahindra, Volkswagen have already started offering subscription services either directly or in partnership with third-party companies. As the customers growing affinity towards shared mobility and digital technologies, the car subscription model is well on its way to disrupt the existing norm of self-owned cars.


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Ankita Singh

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