New models range from more flexible and straightforward lease programs to streamlined car-sharing as automobiles become increasingly high-tech and consumers demand a simplified shopping experience
TORONTO – Major automakers are preparing for a future where drivers might not want to own the cars they use.
The shift comes as the industry undergoes rapid technological change towards a driverless future. While high up-front costs and ownership burdens have a small but growing minority of drivers. As well as fuelling demand for the alternatives.
“In terms of the ownership models, I think really we’re on the cusp of change,” said James Carter. He is the principal consultant at Vision Mobility. James Carter is the person who gives advice to the auto industry.
The new models range from more flexible and straightforward lease programs to streamlined car-sharing. This happens as automobiles become increasingly high-tech and consumers demand a simplified shopping experience.
Volvo, for one, has announced that it will bring its subscription service to Canada to meet those changing demands.
The service starts at $949 per month. It is a leasing alternative that covers insurance & minor wear. Also, included in the cover are winter tires and other costs in a single payment.
“We’re giving everybody an opportunity to get a vehicle. Also, own a vehicle like they own their cellphone,” said Alexander Lvovich, managing director at Volvo Car Canada Ltd.
Customers sign up for 24 months which is shorter than many lease agreements. While they can get a new vehicle and the latest technology that comes with it every year, Lvovich said.
Volvo expects the subscription model to make up about 10 percent of overall sales. A target already exceeded in its U.S. operations. This is because customers are looking for a streamlined process.
“These people want convenience, they want defined and predictable price and they want all the services included. And they want to be able to access this experience in a convenient way online.”
Volvo was the first to launch such a program in Canada. But many higher-end car companies have a variety of subscription models in other markets. These markets include allowing customers to switch between a number of vehicle options.
While some companies offer subscriptions, automotive giants like General Motors are pushing into car-sharing programs.
GM launched its Maven program in 2016 and expanded it to Toronto earlier this year. It allows customers to use a fleet of company vehicles. A rental process for customers’ convenience made simple by GM’s Marven Program.
GM is pushing into territory once led by small-scale co-operatives but becoming crowded by corporate heavyweights.