GM of Sales and Marketing KINTO at Toyota South Africa Motors, Slade Thompson unpacks the driving factors behind the rise in vehicle subscriptions.GM of Sales and Marketing KINTO at Toyota South Africa Motors, Slade Thompson unpacks the driving factors behind the rise in vehicle subscriptions.

In an era where flexibility and choice redefine consumer choices, the traditional concept of car ownership is undergoing a significant transformation. Getting a car still means signing a loan, battling repairs, and praying for resale value. That’s simply not what many modern consumers are looking for these days. What they seek is simplicity, convenience, and predictability in an unpredictable world. For these consumers, a vehicle subscription is exactly what they need to put their minds and their money at ease.

The surge of vehicle subscriptions is not just a passing trend; it's a logical and economic choice that aligns with human nature – especially in the socioeconomic world we live in today.

The economic landscape: navigating change

Escalating interest rates and soaring vehicle costs have compelled consumers to explore alternatives, propelling vehicle subscriptions into the spotlight. According to research on the car subscription market by Straits, the global car subscription market size is set to grow from USD2.78 billion in 2022 to around USD38 billion by 2031. That gives it a remarkable compound annual growth rate of 33.5%.

Surely this underscores the financial strain associated with traditional car ownership. Structural shifts in mobility patterns further emphasise the need for flexible, affordable, and convenient alternatives.

Aligning with human nature

Car subscriptions have gained popularity due to their practical benefits such as flexibility, affordability, and lower commitment. However, the psychological motivations behind this trend are equally important. On one hand, car ownership fulfils a desire for success and freedom, especially for status-conscious individuals, while on the other hand, some experience ownership fatigue and prefer hassle-free access without responsibilities.

The flexibility offered by subscriptions allows people to express their identity through vehicle choices, experiment with different cars, and avoid commitment-related anxiety. Additionally, subscriptions address concerns like fear of missing out by providing access to the latest models and technology, offering convenience, control, and environmental sustainability.

Emerging trends suggest users may develop a sense of psychological ownership, and the future of car subscriptions could be influenced by the integration of self-driving technology, introducing new ownership models and ethical considerations. But that is far down the road, especially in South Africa.

The global example: Toyota's KINTO One

Let’s take a look at how the world’s biggest vehicle brand is embracing subscription to cater to the needs of modern consumers. Launched globally in 2019, Toyota’s KINTO One serves as an example of a car subscription service that disrupted the conventional ownership model.

This comprehensive offering, including insurance, maintenance, and roadside assistance, bundled into a transparent monthly payment, exemplifies how top vehicle brands are adapting to evolving consumer needs. Although KINTO One has seen explosive growth since its South African launch in 2022, it represents a broader trend that transcends a single brand or service.

Flexibility unleashed: a common thread

The real appeal of vehicle subscriptions lies in the unparalleled flexibility they offer. KINTO One, as an example, empowers customers to modify monthly mileage and contract duration, addressing the long-term financial commitment concerns associated with traditional car ownership. As consumer budgets remain in a state of flux amidst economic turmoil, flexibility is a common thread among vehicle subscription services globally, making them an attractive and practical choice for consumers seeking adaptable leasing experiences.

Overcoming Resistance: industry-wide strategies (for consistency changed it to lower case

Acknowledging resistance to change, the automotive industry, including leading manufacturers, actively addresses concerns such as resistance to changing cars, the desire for insurance control, and perceived high costs.

By expanding their offerings and providing customisable solutions, manufacturers are collectively steering towards a future where vehicle subscriptions become synonymous with flexibility, choice, and ease of use.

A sustainable evolution

As we navigate the roads of the future, vehicle subscriptions emerge not as a fleeting trend but as a sustainable evolution in the automotive industry. Toyota's KINTO One, alongside similar global services from top-tier brands, exemplifies how vehicle subscriptions offer a psychological and economical no-brainer.

In a world where adaptability is paramount, subscription services provide road users with the freedom to choose without the burdens of traditional ownership. And this evolution is all driven by the psychological and economic realities of today’s consumer.