Turners to test drive vehicle subscription scheme

Turners Automotive Group is hoping to launch a vehicle subscription service in March under which people pay a flat monthly fee for the right to use a particular vehicle.

Turners is licensing the concept from ASX-listed Collaborate, a company it bought a 12 per cent stake in for $1 million in July last year and which launched the Carly subscription service in Australia in March last year.

To begin with, Turners will be supplying 200 company-owned used vehicles to test the concept but the aim is to access third-party-owned vehicles, new and used, from other dealers, fleet owners and manufacturers.

“[Carly is] They’re looking to basically present all the unsold cars in the market to consumers in quite a different way,” Turners chief executive Todd Hunter told BusinessDesk.

As for the limited launch, “we can test whether there’s an appetite for the approach and, if there is, we will scale it,” Hunter said.

Details such as pricing have yet to be finalised but will probably be similar to the pricing in Australia, Hunter said.

Carly offers three plans in Australia ranging in price from A$115 ($120) to A$147 a week for a minimum term of 30 days. Customers can drop the service by giving 30 days notice in writing and they can choose to change vehicles every month.

The subscription cost includes overheads such as insurance, registration and servicing. Customers can also vary the type of vehicle, depending on changing needs.

The service’s rationale is that while boomers want to own cars, later generations want greater choice and the ability to make smaller financial commitments for short-term agreements.

Hunter says the subscription model offers dealers and manufacturers an alternative to leaving unsold new or used cars sitting around.

Collaborate chief executive Chris Noone said in a statement that Turners is the largest seller of cars in New Zealand, putting it in an ideal position to trial the concept here.

Collaborate estimates vehicle subscription schemes could account for nearly 10 per cent of all new vehicle sales in the US and Europe by 2025.

Collaborate shares closed yesterday at 1.3 Australian cents and have risen 25 per cent in the last 12 months. Turners shares closed at $2.92 and have risen 18.8 per cent for the year.