Leasing trends Pt3: Is leasing a stepping stone to subscriptions?

This year marks the 15th anniversary of the launch of the BBC’s iPlayer and the 10th anniversary of Netflix in the UK, both landmark events that have changed the face of television viewing.

Frequently cited as prime examples of thevrevolution in consumer attitudes away from ownership (videos and DVDs) to usership (on-demand streaming), the meteoric rise of the two services has parallels in the automotive world.

Ownership models are shifting from purchase to leasing and, potentially, subscription as customers seek the same all-inclusive convenience from motoring and travel that they enjoy in other areas of their lives.

Hoping to capitalise on this trend, vehicle manufacturers have a natural interest in business models with the potential to generate revenue and profit throughout the life of a vehicle, rather than just from its sale. This has spurred OEMs to invest heavily in their financial services operations, developing products that seem light years away from the historic provision of loans to support customers to buy their cars.

To stretch the Netflix analogy even further, the streaming service has shown the importance of producing and controlling unique content – in the automotive world it’s the vehicle manufacturers that produce such content. Their challenge is to deliver it to customers in the format they want via the easiest possible interface.

At last count, manufacturer-captive leasing companies account for five of the largest 15 fleets in the FN50 and vehicle numbers are rising rapidly with the popularity of personal contract hire (PCH).