Abishek Narayanan, Research Manager, Frost & Sullivan
The current shortcomings in leasing offerings, such as flexibility and premium offerings, will demand short-term subscription solutions. Additionally, as per the current market dynamics and customer preferences, existing subscription offerings are expected to improve pricing to drive market growth. Increasing environmental concerns and rising fuel costs have created a need for emission-free vehicles, thereby pushing EV demand in the leasing space. However, leasing companies have struggled with structuring their business models; hence, growth has been slow. New revenue streams, such as charging pods and charging cards, will emerge as the market recovers.
Key takeaways include:
• The European market will increase focus on private leasing while the US will focus on corporate leasing, which will balance the overall leasing industry.
• Leasing companies will invest in three key areas: digital retailing, fleet connectivity, and new product innovation (vehicle subscription and used-car leasing).
• New revenue streams are expected from support services, including fleet consultancy, EV charging stations, charging cards, and targeted fleet after-sales.
• Providing alternative mobility solutions for flexibility and affordability: Vendors should focus on solutions that offer flexibility in duration, vehicle selection, and swapping.
• Increasing digital sales channels to kick-start emerging mobility solutions: Capitalizing on digital sales channels is a strategic move for lease companies as it will interest millennial and tech-savvy customer segments.