Mobility-As-A-Service and the Dealership Business Model

Mobility-as-a Service (MaaS) is a term that has been around for a few years now and we’re now beginning to see the impact of MaaS on the automotive landscape. The concept that vehicle ownership is no longer a carrot millennials value has change immensely how dealerships in particular need to think about their offerings to evolve and survive. Couple that with recent news about the ongoing slide in car sales and it makes a whole lot of sense.

There are sprinklings of innovation across the globe — Akshay Jaising of Maven, a car sharing service, has claimed that every shared car removes ten vehicles from the road and in September 2019 BMW and Daimler, decided to see this trend as an opportunity, and announced that they are investing nearly £1 billion to combine their mobility solutions around the world. Embracing coopetition, they have created a joint mobility venture, ShareNow, which will offer car sharing, multi-modal, and taxi ride hailing services, for an increasingly autonomous and on-demand future.

Evidence based research is also backing the MaaS concept. The world’s largest automotive company — Cox Automotive based in Atlanta, published a recent mobility study that highlights that the desire to own vehicles is dropping steeply among younger consumers. Enticed by the relatively small fee needed up-front and the convenience offered, many consumers in cities around the world do not now see the need to own a car.

The Opportunity in MaaS

To adapt to the industry change in the way passengers view and use transport, we will also see dealership, fleet and OEM business models evolve. The introduction of autonomous ride-sharing vehicles will be the cornerstone to making MaaS a reality and change the way consumers move around urban environments. Less congestion on the road, more environmentally friendly and convenient transport will cause a surge in consumer demand for MaaS.

And, from a B2B perspective, it is predicted that by 2025–26, vehicle subscription programs could account for nearly 10% of all new vehicle sales in the U.S. and Europe. Experts predict that over 16 million vehicles will be part of vehicle subscription services by 2025 and Volvo in particular is particularly bullish about the concept and is preparing appropriately.

To prepare for this shift in how people use transport, OEMs and manufacturers should consider whether the autonomous vehicles of the future may need to be built with a subscription based payment model in mind. By developing unique, customised subscription offerings for both drivers and fleet managers alike, customers will be better placed to select the service which best suits them, and their own subscription based business.

With that in mind, if you’re thinking about where to place strategic bets, it’s hard to overlook a business model that offers recurring, predictable and stable revenue as opposed to long sales cycles and banking heavily on consumer sentiment in an economy with an ongoing pessimistic outlook. At Blinker we’re building a world-class platform for dealerships, fleet and OEM’s to adopt the subscription model and in a world where consumer expectations matter most, it’s time to follow suit and embrace MaaS.

If you would like to know more, head over to blinker.com.au and request a demo. The team would love to empower you to be on the crest of the subscription economy in automotive.