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To Boost Income, Automakers Allow Customers To Own Cars Without Buying Them


In a bid to revive revenue, at least four automobile companies in the Indian market are allowing customers to "subscribe" for a car without making a payment.


The subscription model allows customers to own a brand new car without any down payment. The customer will be required to pay a fixed monthly subscription fee and take care of fuel expenses. The insurance, road tax and maintenance aspects are also handled by the company.

To Boost Income, Automakers Allow Customers To Own Cars Without Buying Them

The subscription model is an extended concept of self-drive rental car services in India. The users are also required to make a security deposit payment like in the case of rental cars, infact, these cars are issued in tie-ups with existing rental car service providers.

For example, Hyundai has partnered with Revv to provide cars on monthly and yearly subscriptions, while MG Motor India has a tie up with Miles.

Apart from these two brands, Volkswagen and Nissan also provide the option to customers. Meanwhile, Mahindra is in talks with Revv to start its subscription model.

Indian automakers, Tata Motors and Maruti Suzuki are also looking to enter the new market.


The subscription model gives these companies an additional revenue system while penetrating into a new segment of customer base- the new earners that are in the early stages of their career. The flexibility, options, affordability and low maintenance appeals to the young.

The companies also allow the purchase of the vehicle subscribed to on satisfying some conditions. Hyundai India has a lock-in period of 12 months, on completion of which one can extend the subscription by 48 months (with an option to opt out of it anytime) for a monthly fee instead of a year. If the customer likes the car and wishes to purchase it, he/she can do so at a pre-determined settlement charge.

While the concept if fairly new in India, it accounts for nearly 30 percent of personal car market in the US. At present, companies are providing this service only in major Indian cities on a pilot basis.

Read more about: cars automobiles
Story first published: Monday, August 5, 2019, 14:43 [IST]
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