Subscription services are everywhere now, with people buying books, clothes, and of course, entertainment through these packages. The business model was made popular by streaming services, and now it looks like Volvo could be the Netflix of the motor industry.
A Changing Business Model
Cars were once something that people were proud to own, but many people are beginning to see them as nothing other than something to cart them from place to place. With changing attitudes toward cars, Volvo decided to run a subscription service test for its vehicles.
The service was run in the UK and gave customers rapid access to cars from $713 per month, there was no deposit required and no contract. Volvo believes subscription services like these are the future for the motor industry. The car manufacturer knows it’s not offering a cheap service, but there are signs that other motor companies could provide such a service.
No Need To Own Things
Volvo seems to believe that young people no longer feel the need to own things, and that’s going to include their cars. This service is a way for Volvo to get in at the ground level and watch as car subscription services continue to grow in popularity. Volvo’s boss, Håkan Samuelsson, said the target was for subscriptions to account for 20% of the company’s car sales by 2022.
How It Works
Volvo is offering cars to its customers from $713 per month, and that gets them an entry-level XC40 T3 Momentum. For that payment, customers will get the car, scheduled servicing, tax, roadside assistance, maintenance, and 10GB of in-car WiFi. Customers can switch cars with three months’ notice or cancel their subscription in the same period.
Volvo looks set to be one of the forerunners at the change of the motor industry. It’s seeking to become the Netflix of cars, but only time will tell if people genuinely want this change or not.