🚗 Owning a car is no longer cool

👋 Hello Loopers,

How is your week going?

I've had a terrible week. My car broke down, and despite paying €2,500 for repairs, it still doesn't work. The mechanic mentioned that one of the reasons for the breakdown is that I don't use the car often, which is true. My car sits unused for about six months a year because I live between the US and Spain. Given this, it no longer makes sense for me to keep a car. So, I've decided to sell it and subscribe to a car whenever I'm in Madrid. Today, I’m talking about the new era of mobility. Let’s dive in!

Today we are covering:

Owning a car has lost its shine. 🌟 It's not just a millennial thing, people of all ages are moving away from seeing cars as status symbols. With the responsibilities and long-term commitments that come with owning a vehicle, it’s no wonder we are all looking for other options.

Right now, about 82% of all new car sales in Europe’s top five markets, are financed through banks and financial institutions. This shows just how important auto finance is for car manufacturers to hit their sales targets. But guess what? More and more people are starting to see car ownership as a hassle.

Ride-hailing and car-sharing services are popping up everywhere, offering alternatives to owning a car. But let's be real, they have their downsides: you might struggle to find a ride during peak times, they can be pricey for long trips, and you can't leave your stuff in the car. These services are great for supplementing public transport but aren't a true replacement for having your own set of wheels.

Vehicle subscriptions are stepping in to save the day. They combine the benefits of car-sharing with the convenience of owning a car but without the hassles. We anticipate this market to boom as it addresses numerous issues associated with traditional car ownership.

So, car ownership might be on the decline, but vehicle subscriptions are here to fill the gap. They offer flexibility, convenience, and all the perks of having a car without the long-term commitment. Keep an eye on this trend—it’s set to change the way we think about moving around!

What is a Car Subscription?

Think of a subscription like Netflix, but for cars. You pay a monthly fee to access a vehicle without the long-term commitment of buying or leasing. This fee covers insurance, routine maintenance, and roadside assistance, making it an all-inclusive package. Plus, you can swap cars, pause, or cancel your subscription anytime. Isn’t it cool?

Subscriptions vs Leasing

Car subscriptions give you more freedom than leasing. While leasing ties you to a 2-3 year contract and adds extra costs like insurance and maintenance, subscriptions include these in one flat fee. Plus, you can pause or cancel whenever you want, giving you ultimate flexibility.

Subscriptions vs Buying

Buying a car means committing to a loan and dealing with depreciation. With a car subscription, you avoid long-term financial commitments and the hassles of ownership. Just pay a monthly fee for access and swap cars whenever you need something new.

Why Choose a Subscription?

Julian, my brother, recently subscribed to a hybrid Kia Xceed from Bipi. Bipi was one of the pioneers in this model and offers a wide range of cars from 1-36 months, all included.

Bipi’s success has inspired other companies like Lynk & Co, Finn, Volvo, and Sixt to launch their own subscription services, making it easier than ever to enjoy the benefits of car subscriptions.

Own Less. Enjoy more!! 🔥 

Today, I had the pleasure of speaking with Carmen Giganto, Corporate and special sales specialist at BMW.bymycar Madrid. She's a rock star in the mobility sector and shared her exciting vision for the future!

What do you think are the main reasons why customers prefer a subscription model over buying cars?

C: Today, as consumers make more thoughtful purchases, valuing savings over owning certain items like vehicles, the concept of subscription, rather than obsolescence, emerges. Unlike traditional buying or leasing, a subscription allows for changing the vehicle or canceling the service with much more flexibility, adapting to the user's changing needs. There is no need for a large initial investment, and when it comes time for renewal, the customer has the option to get a new model with the latest technology if they wish. This is a feature that users increasingly value, and that's where BYmyCAR Madrid leads the sector with its BMW and MINI brands.

What do you consider will be the biggest challenge for the subscription model in the near future?

C: We are well aware that the subscription model is very dynamic and requires consumer loyalty. One of the most significant challenges we face is the ability to retain customers. A good example is the streaming services industry, where companies like Netflix and Spotify invest heavily in personalized content recommendations to keep subscribers interested month after month. Therefore, at BYmyCAR Madrid, thanks to our extensive experience in this field, our customers find themselves in an environment where it's not just a mere transaction of fee for vehicle, but they belong to a community where they are included in newsletters related to the automotive sector, informed about new driving experiences, and exclusive events, making them see us as a differentiator. This added value sets us apart from the competition. The customer, whether a business or an individual, is the reason we are constantly reinventing ourselves to offer them confidence that will ultimately influence their final decision.

How do you see the future evolution of the subscription model in mobility?

C: It's a reality that is here to stay. It's a matter of time and logistics of charging points before it becomes more solidly established in society. The growing massification of large cities poses a serious challenge for sustainable mobility. Thanks to the digital revolution, tools like big data and concepts like carsharing are vital for creating smart cities with high-performance mobility systems. Therefore, we at BYmyCAR Madrid integrate all this data into our systems so that, through our CRM, MKT, and advanced software tools, we can provide customers with sustainable mobility solutions, both in their travels and in domestic charging points.

What advice would you give to aspiring entrepreneurs who want to start a sustainable mobility brand?

C: To build a successful company in a market undergoing revolution, like mobility, you need ambition, focus, and speed. Ambition to pursue a big dream that drives the team to do incredible things. Focus to, once the opportunity is identified, concentrate on executing your long-term vision. Speed to innovate above the rest and meet the needs of an increasingly demanding customer. We must be aware that it is a more medium-term project in terms of profit, but it is a sure bet in the long term globally.

ClimateHack Berlin: ​This event will highlight how startups and innovative technologies are driving sustainable practices across the entire fashion value chain. July 23, 2024 - Berlin

SkyDeck Climate Happy Hour: Join this event at SF rooftop to discuss and drive innovations towards a more sustainable future. Meet with other investors, SkyDeck founders, advisors and other key professionals to discuss the latest innovations in sustainability and climate tech! August 7, 2024 - San Francisco, USA

Are you passionate about sustainability and looking for your dream job? Here are a couple of exciting options:

• Sustainability Executive at Puig

• Environmental Specialist at Hitachi Energy

• Sustainability Go-to-Market Activation Lead at Microsoft

• Director, Sustainability at Fresh

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See you next week!! 🕺🏽💚

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