Car subscription services to take 1 of 5 sales by 2023, Volvo CEO says


2019 Volvo XC40

2019 Volvo XC40

Enlarge Photo

The 2019 Volvo XC40 not only represents the Swedish brand's first compact crossover to be sold in the U.S. but its first shot at a new model for drivers to obtain cars: a subscription service.

During the XC40 launch, Volvo revealed it would introduce Care by Volvo, a subscription service giving access to the compact crossover.

For a flat monthly fee, those who enroll will receive an XC40 for an unspecified duration, along with a mix of services—full concierge availability, maintenance, regular cleaning, pickup delivery, and even package delivery to the vehicle—that varies by location.

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Volvo is counting on the service to become an integral part of its business; its CEO believes one of every five vehicles delivered by the brand will come via a subscription service by 2023.

Its CEO, Håkan Samuelsson, told Autocar the service will not be profitable at first, because Volvo will price it aggressively to start.

In the United Kingdom, it's expected the service will be priced at £629 per month, or roughly $850.

2019 Volvo XC40

2019 Volvo XC40

Enlarge Photo

Volvo is one of many brands facing the future by testing car sharing and subscription services.

Hyundai, for instance, offers a notable "Unlimited" subscription model for its Ioniq Electric hatchback that takes the place of a lease.

The program provides unlimited miles for the duration of the "subscription," along with more limited charging and maintenance benefits as well.

CHECK OUT: 2017 Hyundai Ioniq Electric: how 'Unlimited' subscription really works

Samuelsson underscored the importance of car sharing as the auto industry at large continues to grapple with the combined impacts of electrification, connectivity, autonomy, and sharing on the vehicles it will build for the next decade.

"If you’re a car company and you’re not thinking about car sharing," he said, "there’s a problem."

Evidence of Volvo's approach to the future of car sharing can be seen in another feature of Care by Volvo: subscribers may share the car with designated family or friends.

2019 Volvo XC40

2019 Volvo XC40

Enlarge Photo

With just a smartphone and the right app, the main subscriber can let another driver use the car—no key is required for operation.

The subscriber can also check how many miles are being driven and when the vehicle is being used through the same smartphone app.

READ THIS: 2019 Volvo XC40 small SUV to become brand's first electric car

Volvo calls this a small step towards a grander car-sharing service, in which eventually subscribers will be able to loan or rent their vehicles to strangers, too.

However, the proper ecosystem must be put in place to provide all these functions; Samuelsson assured reporters that Volvo is already working on just such a network.

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