Unclear value proposition – they look expensive
Personal vehicles may not be a good fit for the subscription model
Generational assumptions about vehicle ownership are not playing out
Subscriptions undermine the intimate relationship between people and their vehicles
joined by the potential for subscription models and the emergence of dimensions of mobility:
autonomous driving, connectivity, electrification and shared mobility (ACES).
As with all forms of disruption, success centers upon delivering products, services or processes that
solve issues that exist in established procedures, making life easier for potential customers, or by
taking cost or friction out of established methods.
On the face of it, automotive retailing looked ripe for disruption, but it has yet to happen on any
scale to a large degree.
Despite millions of dollars invested in startups and OEMs, the jury is still out on their future. Several
OEMs have exited the sector, although others hope to be back as electric vehicle (EV) volumes
grow.
OEMs apart, many of the brands once heralded as the future have disappeared.
J.D. Power summarized the subscription challenge succinctly:
ver the last ten years, there have been multiple references to the potential for disruption in
motor retailing. Behind the many events, white papers and articles championing the
potential for change has primarily been the trend to digitization. In turn, this has been
However, as investor service the Motley Fool observed, "Carvana just crushed earnings, but
investors should be careful." Their observation was that while there was an unprecedented increase
in used car values seen last year, these values could well fall again, leaving the business exposed to
inventory value losses.
t should come as no surprise that online car sales present an obvious opportunity.
Launched in 2012 in the USA, Carvana is arguably the most recognized online used car
retailer. In August 2021, it announced its first-ever profit.
