While automotive incumbents take a more cautious and planned approach to car subscription adoption, much of the existing consumer demand is being met by pure subscription providers.

These businesses are independent startups with the agility and technical capabilities to quickly launch and scale car subscription services.

These startups often have a more innovative and flexible approach to car subscription, which allows them to better cater to changing consumer needs and preferences.

Advantages and Challenges for Pure Subscription Providers

One advantage of pure subscription providers is that they are able to offer a wider range of vehicles, as they are not limited to a particular automaker's inventory.

This means that consumers can choose from a variety of makes and models, and may even be able to switch between different vehicles within the same subscription.

However, there are also some potential drawbacks to relying solely on pure subscription providers.

One challenge is that these startups may face difficulties in scaling their operations and building a sustainable business model.

They may also struggle to compete with the marketing and brand recognition of established automakers, which could limit their ability to attract a wider audience.

Case Study: Cazoo's Struggles in the Car Subscription Market

Indeed, we have already witnessed the spectacular rise-and-fall of the world’s first billion-dollar car subscription service when online car retailer and market disruptor Cazoo announced it would be exiting from car subscription as part of a major cost cutting strategy to save £200m to help reverse heavy losses after a hefty 95% collapse of its shares.

However, it's important to note that Cazoo's struggles may have been due to a combination of factors, including the impact of the COVID-19 pandemic on the automotive industry and the company's aggressive growth strategy.

The Future of Pure Subscription Providers

Ultimately, the success of pure subscription providers in the long term will depend on their ability to effectively address challenges such as scaling operations, building brand recognition, and attracting a wider audience.

Those that are able to do so may continue to play a significant role in meeting consumer demand for car subscriptions, while those that struggle may be forced to exit the market or pivot to other business models.

Consolidation and the Evolving Car Subscription Landscape

As the car subscription market continues to grow and mature, we are likely to see a consolidation of providers. This is a natural progression for any emerging industry, as smaller players are acquired by larger ones or merge with one another in order to gain greater market share and technical capabilities.

Consolidation can also bring benefits for consumers, such as increased competition leading to more attractive pricing and service offerings. However, it can also lead to a reduction in choice and potentially higher prices if a few dominant players emerge and are able to exert market power.