Car Subscription MasterClass

Casi shares insight on how to lower operations costs and control value depreciation
August 17, 2022
Jordan Symonds

Calling all OEMs, dealerships, fleet operators, and mobility venture players! In our car subscription MasterClass you will learn more about car subscription and why this innovative product thrives in the changing automotive industry. We cover two areas in detail that we've experienced as being crucial to a services success: 1. Digitizing and automating operations and logistics, 2. controlling fleet value depreciation.

Enjoy our first MasterClass and don't miss our key takeaways below.

There! We hope you enjoyed the video and are ready to become a pioneer in car subscription. Here are few things you need to remember.

The automotive industry is undergoing radical changes.

The industry is going green

The green shift is underway and electric vehicles are cutting the new car sale margins in half. Electric vehicles need less maintenance resulting in after-sales revenue being reduced by 80-90%. We also see the end-customer experiencing uncertainty regarding electric vehicles; Wether that's because of usage patterns, unfamiliarity of the new brands, or price tag hesitation, we've experienced that flexibility beats uncertainty. Car subscription enables end-customers to go electric.

Direct distribution wins

Direct distribution is replacing traditional sales models of OEMs selling to an importer, followed by a sale to a dealership network, and finally the car owner. Now, OEMs are prioritizing being closer to the end-customer and owning the customer journey. In Norway, the number of visits to the dealership when purchasing a car has gone from four visits to 1.1 on average. Mobility decisions are made from home on a phone or laptop. That is where customers want to be met. With Casi's car subscription platform, the provider has multi-chanel distribution including their own branded website and marketplace connectivity.‍

Sharing economy

The introduction of sharing economy is challenging the ownership model itself. Instead of owning a car, the end-customer cares about having the right form of mobility at the right time. Personal vehicles stand still for 96% of the time on average and data shows urban Millennials and Generation Z opting to not purchase a car. Car subscription is a business model that appeals to these demographics and unlocks new revenue streams for businesses looking to capitalize on the industry changes.‍

Developing Technology

The fast pace in which technology is evolving is a key enabler in merging the fragmented transportation industry into one mobility industry, powered by mobile phones and an instant gratification culture. Car subscription is a digital product that end-users love and facilitates bundled services and profitable cash flow for the players daring to make a move in this space.

Become a Master of Car Subscription‍

We've overcome many challenges together with our customers while launching and scaling car subscription services, and the two most significant challenges that are important to traverse correctly are, 1. Delivering a high-end service, including logistics and 2. Value depreciation of the fleet.

Car subscription is a product end-customers love largely because they pay one flat monthly fee and have access to their car with bundled services. This high-end product can be costly for providers as logistics and operations eat up the margins, meaning the digital players will gain a competitive advantage. The Casi platform is built on an event-based architecture and we've seen this digital operating model lower operations costs to 10%. Compare that to the rental industry standard of 30%.

Still, fleet value depreciation is a service operators largest risk. Value depreciation and financing costs account for roughly 60% of the subscription price. Don't trust the outdated three-year residual value estimate; Instead use the Casi platform. We use different data points including real-time mileage from telematics in the car, market prices, credit facility, and subscription financials. These data points provide the cars real-time value, meaning we know what's it's worth at any given time.

Our platform's data driven engine categorizes your fleet into keep, adjust, sell, enabling providers to optimize their service and optimize cash flow throughout the car's life cycle. The platform makes recommendations depending on the cars performance; Keep means the margins on the car are good, the down payment is going as planned, and there is a demand for the car. Adjust means you need to take action; It could be that you should increase the price on the car or make other changes to the car in order to avoid loss. It's all about keeping the fleet of car subscriptions as healthy as possible. Finally, the Sell category compares the business case of selling the car out in the market or keeping it on car subscription.

The worry about value depreciation belongs to the past and by using all the available data, you're able to be in control of the value depreciation.

Since 2018, Casi has paved the way for leading subscription services and we know what it takes to establish subscription as a profitable business model.

Submit your information at the bottom of this page and let's discuss why car subscription should be your next revenue stream.

We hope you learned something in our Car Subscription MasterClass and that you're eager to get started. Speak soon!

Jordan Symonds
Jordan Symonds
Head of Communication
Jordan works to build the Casi community by telling stories about our customers, employees, experiences, and insights we’ve gained over the years in automotive!