The automotive industry is at a crossroads. Over the last five years we have seen some of the most significant innovations and developments since mass production made personal vehicles available for everyone. From the rise of electric vehicles, and the early steps of hydrogen power, to hugely increased efficiency, most of the obvious changes have been physical. However, on the horizon looms larger questions surrounding ownership, flexibility, and rapidly changing consumer expectations.
As dealers, manufacturers, and rental organisations have adapted to the physical changes within the cars, it’s becoming rapidly clear that the consumer landscape is changing in parallel to this. 59% of all payments made globally are now digital[1], and this figure is set to continue to grow over the next two to five years and nearly two thirds of all purchases begin online[2].
Ready or not, this rapid change has already started to come to the automotive industry. The clearest evidence of this is the establishment and subsequent online market share of Cazoo, who need little introduction. The online focused dealership has raised nearly £500m in less than two years[3], building a marketplace for used cars and acquiring Imperial Cars in July 2020. At the same time, Cinch (launched by BCA[4]) and HeyCar have also started to compete for online equity,as the opportunities in this space become apparent.
Whilst providing significant disruption to the industry, we see that the adoption of digital sales channels in vehicle retail is just the start of things to come. Consumers are redefining how they own and use everyday and luxury items, from clothes to underwear, and now even cars. Subscription is undeniably on the rise, and Hakan Samuelsson, the Chairman of Volvo states is anticipating this shift; “20% of sales will be on subscription by 2022, and 50% of sales will be on subscription by 2025”.
This is addressed through a platform like Wagonex, which enables businesses of all shapes and sizes in the automotive industry to upload their vehicles to a marketplace for subscription. It’s a plug and play platform, with no technological resources or knowhow required for our partners. You can manage your fleet from within your browser, and earn reliable, incremental revenue from your fleet. Our platform is entirely paperless, with smart integrations to automate credit and identity checks to pre-screen customers before they get to sign the contract.
For your customer (and they remain your customer from start to finish) subscription allows them increased flexibility and clarity of costs with road tax, maintenance, and roadside assistance all included in their fixed monthly price.
This model brings much needed clarity to the industry, both for the customers but also for dealerships. A Wagonex partner receives regular, clear payments each month via direct debit while their vehicles are on the road, and retains ownership throughout the length of the contract.
Over the last four years since we were founded, we’ve worked with numerous high profile dealerships and manufacturers to build them a subscription offering that works for them, whether that be on our marketplace, or their own, separate platform. We now cover a huge range of vehicles through our system, from large commercial vehicles to small electric city cars.
We have also integrated our technological capabilities with leaders in identification checks and payment systems. This means that in seconds we can confirm customer identities and undertake credit checks. This is all performed through our system so our partners know that every customer who requests a vehicle is fully background checked.
Our goal is to become a leading technology partner to the automotive industry. Helping businesses move towards digital subscriptions, whether they’re currently entirely digital, partly digital, or haven’t entered the online market yet.
To find out more about becoming a Wagonex partner, take a look at how we can work together here.
Or read more stories, news and helpful information about subscription in our blog.
[1] https://www.techcrunch.com/2019/06/11/internet-trends-report-2019
[2] https://www.thinkwithgoogle.com/feature/path-to-purchase-search-behavior/
[3] https://www.crunchbase.com/organization/cazoo
https://www.am-online.com/news/acquisitions-and-deals/2020/07/14/cazoo-completes-acquisition-of-car-supermarket-group-imperial-cars
[4] https://cardealermagazine.co.uk/publish/bca-has-launched-its-direct-to-consumer-used-car-sales-website-cinch-with-more-stock-on-sale-than-cazoo/206330
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