Car subscriptions will take 20% of sales in five years, says Volvo boss

Volvo XC40

The XC40 is the first car to be offered on Volvo’s subscription service

Volvo is to offer a car subscription service, starting with the XC40, due to “changing habits of the public”

Volvo’s new car subscription service will account for a fifth of its volume in five years’ time, boss Håkan Samuelsson has said.

Volvo has launched this model of car ownership in response to the changing habits of the public, in which subscription services, for example for mobile phones and TV streaming, are increasingly popular.

Volvo XC40 revealed 

Called Care for Volvo and launching on the new XC40 compact SUV, the subscription service includes insurance, taxes, maintenance and roadside assistance. 

It also includes wi-fi access and a concierge service. Over time, more services will be added. For example, Samuelsson said that next year, food shopping will be able to be delivered to the car.

Comment: Volvo leads the way, for now 

In the UK, the subscription costs £629 per month for the XC40 models available from launch, but will extend to other models over time. There is no deposit to pay and the fee is not affected by the buyer’s age or location.

Care by Volvo also allows customers to share their car with up to three friends or family members with a new digital key technology. However, this is not yet available in the UK due to a lack of appropriate insurance policies. It is expected to launch next year.

When asked whether he could envisage a time when cars would only be available on subscription, Samuelsson said there would be “a long period where both [traditional sales and subscription] will work” but that it would very much depend on customer demand.

The service will not be profitable for Volvo in the beginning. “We’ve priced this attractively for the market and then we will work on costs so to make it profitable [in future],” Samuelsson said.

Care by Volvo is also a tentative stop towards a car sharing programme for Volvo. While this service only allows a handful of designated people to share a car through an app, the technology could be used more broadly. Volvo digital boss Atif Rafiq said: “You can imagine lending to a stranger. We need to develop the network, for example, by having a car fleet that we own.”

He added: “If you’re a car company and you’re not thinking about car sharing, there’s a problem.”

Volvo’s forthcoming sister brand, Lynk&Co, is set to launch next year with a similar purchasing system.

Senior vice president Alain Visser said earlier this year: “Our aim is to enrich and simplify ownership by redefining how cars are bought, owned, connected, serviced and used.”

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Source: Autocar Online

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