As digital and mobile technology changes the automotive market, vehicle subscription and online marketplace businesses are also growing, and undergoing changes.
News has emerged, via Bloomberg, that Singapore-based automotive subscription operation Carro has gained the top automotive investment banker for HSBC in Asia as the company’s new chief financial officer. “Ernest Chew, who heads the British lender’s capital goods and automotive investment banking team in the region, will join Carro as its chief financial officer in February,” the news service said, citing unnamed sources.
Automotive sales are increasing going digital — and more consumers are buying more used products of all types online. Those two retail trends have recently collided in Southeast Asia, where Carro, an automotive marketplace and financing provider, reportedly has bought Jualo, an online marketplace for used goods from some 300 product categories.
According to the report, the deal comes as Carro raised some $30 million in fresh capital. “Jualo has amassed 4 million monthly active users and facilitated transactions worth $1 billion last year,” the report stated. “Carro, which operates in Singapore, Thailand and Indonesia, said more than $500 million worth of vehicles were sold last year on its platform, up from $250 million in 2017 and $120 million the year before.”
The new Carro hiring also comes amid more growth for automotive subscription services.
Indeed, the anticipated compound annual growth rate (CAGR) of the global automotive subscription services market through 2022 is 71 percent. In an effort to reach drivers who want the convenience and variety of a subscription, Mercedes-Benz is rolling out a pilot service called the Mercedes-Benz Collection. Drivers will be able to access Mercedes-Benz vehicles in Philadelphia and Nashville with the launch, the company said in an announcement. With the pilot, Mercedes-Benz is launching three tiers: Signature, Reserve and Premier. Drivers can select from any vehicle body style offered within their selected level. Vehicles offered include SUVs, sedans, coupes, cabriolets, wagon models and even roadsters.
This type of service is one way automakers can attract younger customers. And BMW is hardly alone: Cadillac launched a car subscription concierge service of cars and SUVs last year called BOOK. The service allows for the company’s vehicles to be delivered and picked up on demand for customers via a smartphone app.
The trend is not confined to famous automotive luxury brands, either.
Earlier this year, for instance, Toyota announced the official launch of KINTO, a new company to manage and operate its car subscription service. KINTO is funded by Toyota Financial Services and Sumitomo Mitsui Auto Service Company.
“As society shifts from conventional car ownership to car usage that can be enjoyed wherever and as much as users would like, there is a growing need for a service that allows customers to freely select the car that they like or want to drive, and enjoy it as they like, instead of using a car simply as a means of transportation,” the company wrote in a press release.
KINTO offers two services that will soon be available in Japan: KINTO ONE allows customers to drive one Toyota-branded vehicle over a three-year period, while KINTO SELECT allows customers to drive six models of Lexus-branded vehicles over a three-year period. Both are monthly fixed-sum services that include insurance payments, vehicle taxes, registration charges and regularly scheduled maintenance of the vehicles.
There has also been retraction when it comes to vehicle subscription services. Proof of that comes from Ford. The venerable automaker has agreed to sell its own vehicle subscription operation to Fair, a startup in this space.
As part of its ongoing research into subscription commerce, PYMNTS has regularly covered Canvas, which offers subscribers access to a selection of used Ford vehicles. “The two main ways to get into a vehicle today are short-term options, like ridesharing or renting by the day or hour, and long-term commitments, like leases and loans,” CEO Ned Ryan previously told PYMNTS. “There isn’t anything in between. We wanted to create a simple and easy way to get into a vehicle somewhere in between those two worlds.”
Nothing is ever boring when it comes to automotive commerce, and these recent subscription moves underscore that.