Subscription, the automaker’s New Approaches to Car Ownership?

Porsche, Volvo and other automakers are sure that consumers are ready for new and more flexible ways of owning a car. By offering their cars online via a flat monthly subscription, Porsche, Volvo and Polestar has broken away from the dealer-focused method of selling cars and finally adopted the model used to great success by the likes of Spotify, HBO and Netflix. Other car automakers have experimented with subscription offerings, but Polestar will be the first pure player. On October 17 Polestar announced and unveils its first electric performance car – Polestar 1- and their vision of the future ownership of cars. Polestar – use have been a Volvos racing partner since 1996, but in 2015 Volvo acquired the company. Polestar , will play a significant in the launch of smartphone-based subscription plans with monthly payments and no upfront fee. The Polestar vehicles will be available through 2 or 3-year subscription plans, a method most auto analysts believe could become the norm in years ahead. “We believe that subscription is the future,” said Jonathan Goodman, Polestar’s chief operating officer. On October 10 Porsche’s announced the new Passport subscription, an on-demand short-term rental program in Atlanta. You can subscribe for $2,000 per month, which will give access to 8 models of Porsche including the 718 Boxster, Cayenne and Cayman S at launch. Those who want a bit more can sign up for the The Accelerate program, is $3,000 per month, but it gives access to a total of 22 Porsche models and variants, including the 911 Carrera S, the Macan GTS and the Cayenne S E-Hybrid SUV. The Porsche membership may to many seem pricey, but it covers tax, registration, insurance, maintenance and even detailing fees. There’s a one-time $500 activation fee, and the of course do credit and background check, which is fully understandable given the value of the Porsche you can drive. On September 21 Volvo announced that they will launch a subscription that will make  ‘having a car as transparent, easy and hassle free as having a phone.’ Volvo have developed the concept ‘Care by Volvo’, which in many ways is a competitor for private leasing, where you pay a fixed fee to be allowed to use the car. With “Care by Volvo” there is no start up payment, and the new offering is similar to a subscription scheme, where you get a car, drive it for two years and then get a new car. The subscription price includes maintenance, service, and insurance. Volvo introduces the concept together with the launch of the new XC40, but then Volvo will expand the scheme to more of their models. “This is simple and clear, everything but fuel is basically included in one flat rate,” said Lex Kerssemakers, President & CEO of Volvo Car USA, “This is the next step toward making life less complicated for customers.” The program will officially launch at 2017 Los Angeles Auto Show, allowing customers to enroll in the subscription program for the first time. Pricing and details for Care by Volvo will be disclosed at the event.