Subscription models vary, but in general, they allow customers to lease cars for periods of around six months. The arrangement costs more than typical multi-year leases, but drivers get more variety and short-term commitments.
The new Jaguar Land Rover service, called Pivotal, is debuting in the U.K. after completion of a trial program. The first vehicles available are the all-electric Jaguar I-Pace, Range Rover Sport and the Land Rover Discovery. More are likely to follow, the company said in a news release.
Jaguar Land Rover said in a July 2 news release that 18 percent of drivers "prefer no-commitment subscriptions to paid-up ownership." The company went on to state that subscription model leasers are expected to account for 10 percent of U.S., U.K. and European automobile "sales" by 2025.
"The early trials have proven this as an effective way of encouraging new customers to try the brands, with 80 percent of new members not having previously owned a Jaguar or Land Rover vehicle," the release stated.
Rawdon Glover, managing director of Jaguar Land Rover UK, said in a prepared statement: "The future of mobility has never been more in the spotlight, and our customers are increasingly looking for more flexibility in the way they interact with us. We are constantly looking at new and innovative ways to deliver the best solutions for our customers, and adding the Pivotal subscription service to our portfolio is the latest in a line of new services that put our customers’ needs first."
He continued: "Through Pivotal and our network of retail partners, even more drivers can get behind the wheel of a Jaguar or Land Rover, and we’re excited to see how this new initiative fits in a post-pandemic world where personal transport will undoubtedly be in more demand."
Isobel Dando, managing director of Pivotal, said: "The world is changing, and Jaguar Land Rover is changing with it, adapting to the needs of our customers as well as supplying those who would not normally consider our cars and SUVs. Traditional car ownership may not provide the flexibility required by some in the modern world, and with Pivotal, we are able to offer an alternative, premium option. Our customers love driving, and a subscription gives members [the] chance to experience living with different vehicles – whether their priority is lower-emissions, advanced safety technologies, versatility or design, Jaguar and Land Rover vehicles have plenty to offer."
Across sectors, operators of subscription services need to be aware of customers' and clients' interest in cutting costs due to COVID-19, experts have warned.