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Increasing Interest in Subscription Economy will Revolutionize the Dealer Service Experience

Vehicle subscription services are a relatively new, convenient way for consumers to access mobility services as an alternative to traditional car ownership.

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Research reveals opportunity for automotive OEMs to gain significant market share as vehicle subscriptions rise in popularity.

Syncron, a provider of cloud-based after-sales service solutions focused on empowering the world’s leading manufacturers to maximize product uptime and deliver exceptional customer experiences, has released new research highlighting how customers’ increasing interest in subscription-based services is forcing automotive manufacturers to redefine their dealer service operations.

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Vehicle subscription services are a relatively new, convenient way for consumers to access mobility services as an alternative to traditional car ownership. In this subscription-based approach, customers pay a flat monthly fee to a manufacturer or third-party provider in return for on-demand access to several vehicle models. The fee covers insurance, maintenance and roadside assistance — and just like consumers’ subscriptions to movies or music — can be turned off or on at the click of a button. Original equipment manufacturers (OEMs) that already employ these models include BMW, Cadillac, Volvo, Jaguar Land Rover, Lexus, Mercedes-Benz, Audi and Genesis.

The onslaught of the subscription economy is redefining the way customers consume products and forcing automotive manufacturers to examine decades-old business and service delivery models. OEMs can no longer rely on new product sales to meet shareholder expectations and must identify additional revenue opportunities — putting the dealer service experience in the spotlight.

Up until now, automotive service has been a reactive, break-fix model where vehicles are repaired after they’ve already broken down. To meet the demands of subscriptions, however, OEMs will need to equip dealers to preemptively repair vehicles before they ever fail. To arm OEMs with the resources they need for this shift, Syncron set out to understand how customers view the dealer service experience today and what their expectations are for the future, surveying 500 vehicle owners across the U.S. and Europe. The findings are featured in a new report, “Shifting Gears from Reactive to Proactive: How Customers’ Rising Interest in the Subscription Economy is Revolutionizing the Automotive Dealer Service Experience.”

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Despite multiple vehicle subscription options available today, consumer awareness remains relatively low. More than 60% of survey respondents indicated that they are unfamiliar with vehicle subscriptions, however, 57% were very interested when presented with the concept. Additional findings from the research report include:

  1. Customers are satisfied with the dealer service experience as it stands today. Nearly 60% of vehicle owners indicated that they use their dealer for maintenance and repairs today, with more than 90% describing their most recent dealer service experience positively.
  2. Interest in subscription services is high, but awareness is low. Around 60% of respondents indicated fixed monthly cost and included maintenance and repairs as the biggest advantages of vehicle subscription services. More than 40% of respondents also indicated they would be willing to pay a premium price for a subscription-based model.
  3. Automotive OEMs must invest in service today to prepare for the future. More than half of survey respondents lack loyalty to a particular automotive brand when making final vehicle purchasing decisions. And, with nearly 40% of these vehicle owners indicating that a negative dealer service experience would sway their perception of a brand, the customer experience at the dealer level is more important than ever.

“In the coming months and years, automotive manufacturers must optimize their current infrastructure to lay the foundation for a successful future,” said Gary Brooks, CMO of Syncron. “It’s not so much a matter of if, but when, customers will overwhelmingly demand subscription-based services. Automotive OEMs must begin equipping their dealers today to prepare for a proactive service model where vehicles are repaired before they ever fail. In this new research report, we aim to inspire and motivate automotive manufacturers to do just this as they navigate today’s ever-changing customer expectations and prepare their businesses for the seismic shift to the subscription economy.”

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