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Society07 March 2018

Rented future: a subscription model vs. ownership

Social trend

In the frenzy associated with the recent Super Bowl finals and campaigns that are at the forefront, it often happens that you do not notice ads that – not knowing why – are not commented on as broadly as they should be. They create a new quality, carry a strong message, have a wider mission than just to communicate the emergence of a new product or a non-standard offer. This is the new global Volvo advertisement for me, which has been broadcasted in a short version in Poland for a few days.

Despite the fact that it talks about the premiere of the XC40 model, available in the subscription model (monthly payment for access to the vehicle for a short, e.g. one-year period, instead of buying into ownership), brings with it something more. It is worth asking a question about how to find yourself in a world so heavily dominated by, often unjustified, consumerism and the pursuit of material goods. Does the campaign carried out by the Swedish Forsman & Bodenfors give at least a partial answer? Judge for yourself:

Referring to the growing trend of the automotive industry offering access to new cars in the subscription model, it is worth – as always – to reach hard data. A study conducted by Gartner indicates that almost half of respondents would consider access to a car instead of having one, and 12 percent of respondents would consider this offer by far.

In the US, over 2,000 customers were interested in access to Volvo cars even before the company announced a price list for this service. What’s even more interesting, among people who have been using applications such as Uber or Lyft for a long time, the rate of interest in joining the car subscription program is twice as high.

The reason why today’s generation of customers is more willing to look at access than to have access is also important. According to Michael Ramsey, research director at Gartner, the cost is not the main motivation that drives people away from buying a car. Clients choose to subscribe because it is easier than having and more flexible. In turn, Brian Bolain, marketing director at Lexus even claims that the subscription model is often even more expensive than buying a car, but for today’s customers it is less important, because simplicity counts.

The Volvo Care program offers the XC40 model for $700 with a contract for 2 years, soon there will be more models available, and the program itself is also available in Poland, although for the time being for entrepreneurs. This is just one of the signals of a clear trend in which the majority of automotive brands are looking. Some of them already operate in the area of subscription, others, such as Lexus, analyze this phenomenon before making the final decision on joining with their own program. Brands interested in the preparation of the subscription offer are not only those producing vehicles for the mass market, but also those from the premium segment.

Hyundai offers in subscription its electric car Ioniq, although it plans to develop the program with new models. The Ioniq version costs $300 a month for a three-year contract. Lincoln in the US claims that even a three-year lease agreement is a too long commitment for customers accustomed to frequent change of phones and such a popular subscription, for example, TV channels. This brand is going to launch this month’s month-to-month program, which will allow you to change your car every month, choosing from the offer available at the moment. The cost of renting is about $1,800 a month.

Porsche has already carried out a similar pilot programme. In the Atlanta district, a monthly Passport rental program has been launched, at a price of 2,000 USD a month. The effects, according to Porsche, were “mostly positive” and 60% of customers chose cars with a subscription price of $3,000. 80% of the pilot project’s clients were between the ages of 25 and 44. According to Klaus Zellmer from Porsche – everything will soon be focused around the subscription model.

Watching the Volvo campaign, from which I started this text, I would like to say that the scenes presented in it are not about us. Most of the film, however, talks about our society and about a handful of “misfits” who, faster than others, understood that to have, does not mean to be, and possession is not always the best solution. This idea was even better expressed at the end of the advertisement with the eloquent slogan By Not Owning Things You Are Not Owned By Things, with which I fully agree. I agree with the rightness of the subscription model in many areas (I also tried to buy a car in subscription 2 years ago, unfortunately, the first such program was not perfect then) and with the essence of decluttering our surroundings and the space in which we live, which is also referred to by Volvo.

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