Times are changing and what seems unthinkable to many is completely normal for the next generation. This also applies to the subscription of services. Buying CDs and DVDs is dead, today people subscribe to streaming services. Software, telephones are switching to subscriptions, and cars are booming in the form of operational leasing. Especially in the business sphere, it is more convenient for companies to rent cars and basically not worry about their vehicle fleet, however this is becoming more popular among the younger generations for private purposes as well. Generation Z is approaching their thirties and reaching the time when many of them will be buying a new car, and leasing may be a more viable solution for many than saving up large sums for a one-time purchase. Volvo he is aware of it and intends to continue it.
While in 2020 there were 5,500 cars for rent, in 2021 it was 16,900 cars, and for 2022 this number increased to 25,100 (by 49%). To put that into context, Volvo made 615k cars last year, so it’s doing roughly 4% so far. That’s not much, but the number tends to grow, and Jim Rowan, CEO of Volvo, has hinted that he will work on it even more, because the EX30 compact electric crossover is on the way, which, in the form of a subscription, could be a very attractive car for Generation Z (and subscription should be preferred in his case as the main form of “purchase”). In this way, Volvo could also appeal to a younger clientele, which it has not yet addressed much. Even in his own words, he is surprised how many people in the price category between 40 and 60 thousand USD buy a car without visiting a dealer.
Of the aforementioned 615,000 cars, 18% were purely electric, 23% were plug-in hybrids, and sales of purely combustion versions fell by 15% (this is also due to the fact that they are disappearing from the offer). Volvo’s plan is to produce 1.2 million cars within a few years, half of which should be purely electric cars.
