Europcar enters the car subscription market0
by Jordan Symmonds on 15.12.21
Last updated at 21.10.22 12:49 PM
The recent takeover of Europcar by a consortium led by the strategic partner Volkswagen means transforming Europcar from a classic car-rental company into an innovative mobility platform, opening up doors to more sustainable alternatives to vehicle ownership. New mobility solutions, such as flexible subscription and sharing models, will equip Europcar to face current and future mobility challenges” Europcar press release June 2021.
Today Europcar Norway announced that it will launch its ‘Sesongbil’ subscription service in Norway, and the service will be distributed through the Schibsted-owned marketplace FINN. At Casi, previously imove tech, we applaud Europcar for their willingness to adapt to new consumer trends. We also applaud that FINN takes a clear position in the fast-growing car subscription market.
The FINN subscription marketplace runs on components from the purpose-built white-label technology from Casi. If you are interested in becoming a subscription provider on a marketplace platform, please let us know!
Europcar’s recent move must be considered a strong acknowledgment of the subscription model. Car manufacturers have been looking at new ownership models for a long time already. Leasing companies have experienced that their customers want shorter commitment and more flexibility. Now the rental industry experiences a demand for more predictability and longer commitment periods. And to all of them, Car Subscription stands out as the type of service that their customers have long-awaited.
“We must build the car subscription market together with other powerful players, as existing services are still few, small, and in general not really known among consumers. Big trusting players like FINN and Europcar will help the consumers to discover alternative ways of owning their vehicle, which is good for everybody in the car subscription space," says CPO and Co-Founder, Gunnar Birkenfeldt.
What differs rental from car subscription anyway, you might ask? Some would argue that rental companies have been doing car subscription services for decades already. They own the car, bundle it with insurance and other services, and let the consumer rent it for their desired period. At first glance, it could look like “same shit, different wrapping.” But is it really?
If you look at the underlying capabilities needed to run and scale a car subscription service, rental companies should be well-positioned with their sourcing, infrastructure, and financials. But there is for sure some re-engineering to be made to convert traditional rental into profitable and flexible subscription models. Car subscription, having more long-term customers, is less logistic intensive than traditional rental. This is an opportunity to digitize the operating model to run the service more efficiently. According to Casi data, the value depreciation on a subscription vehicle is more similar to a privately owned vehicle. This means less cost per month, and an opportunity to offer more attractive prices to end-users of car subscription.
Finally, car subscription is challenging the traditional model of buying a car. This means that the rental companies can start competing for a new customer segment - the car buyer. Rather than ‘same shit different wrapping’, we would argue that car subscription is a ‘wrapped gift’ for the rentals.
Casi enables providers to launch and scale car subscription services. Want to know more? Ask for a demo!