Volvo Drives Consumers Toward Subscription Vehicles

Photo by Florian van Duyn on Unsplash

The automotive industry has been under tremendous pressure to innovate as two mega-trends apply pressure: electric vehicles and ride-sharing services. On the one hand, the interest / demand / need for electric vehicles are forcing rapid innovation around the product line. At the same time, the clustering of people into greater metro areas and the vast availability of ride sharing services eating away at the necessity for vehicle ownership at all.

Most have embraced the need for change head on. Every manufacturer is developing and deploying their electric and hybrid vehicles as quickly as possible. Also, we see increased participation, integration, and partnership with the ride-sharing ecosystem. These efforts are both commendable and credible.

At the same time, however, there has been another trend subverting our norms — the movement away from ownership. This movement is a critical component of the interest and success of the ride-sharing economy as well. For automakers, this should be one of the most troubling considerations for the future.

Volvo continues to show that it has its efforts aimed for the future. Their newly announced Care By Volvo program looks to turn the notion of auto ownership on its head.

In what it claims is a world first, the premium automaker will launch its XC40 compact crossover with a flat-rate subscription which either terminates after 24 months or simply rolls over into a new plan.
It’s a system that hints at a greater industry disruption every bit as fractious as electric cars, threatening to upend the traditional roles of new car dealerships, auto finance firms and, especially, insurance operators.
Far removed from its own, or the industry’s own, traditions of leasing cars, the Care By Volvo plan does not demand a deposit of any kind, has no age restrictions and its monthly payment includes all insurance, finance, tire changes and service costs, regardless of the driver’s state or even country.
Source: “Don’t Buy Your Next Volvo. Subscribe To It Instead.”, Forbes

Volvo ticks multiple checkmarks here with this move. First, it taps into the broad cultural shift away from ownership. Second, it adds convenience and simplicity by bundling all the complications up into a singular, easy-to-understand price. Lastly, it bundles a number of owner comforts into the experience, investing heavily in the customer and owner experience.

There is any number of electric vehicles on the market, but the business model and customer experience increasingly become critical considerations in the purchasing process and ultimate market differentiation. There’s more than one way to give Tesla a run for its money.


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Gregarious Narain is a serial entrepreneur and product strategist. A reformed designer and developer, he writes on his experiences as a founder, strategist, and father on the regular. Work with him at Before Alpha, connect on LinkedIn, follow on Facebook, or say hi on Twitter.