Car subscription service fast gains ground among 30s, 40s in Korea

[Source: Hyundai Selection]

Car subscribing instead of owning is catching on fast in South Korea.

According to the auto conglomerate on Wednesday, the cumulative number of subscribers to Hyundai Motor Group’s mobility subscription services under the platform choices of Hyundai Selection, Kia Flex and Genesis Spectrum was tallied at 31,560 as of Monday, surging 66.5 percent from 18,958 of mid-February.

Hyundai Motor Group unveiled its car subscription service first in 2019. Hyundai Selection subscribers are able to choose and drive one of the nine Hyundai Motor vehicles including Grandeur, Santa Fe and Palisade with a monthly fee ranging from 590,000 won to 990,000 won ($502.17-$842.62).

Most of the subscribers are in their 30s and 40s who value experience more than ownership. Users simply need to book a new car on a dedicated mobile app to drive them during a subscribed period without concern about maintenance costs because the subscription fee covers the insurance premium, maintenance cost and auto tax.

The ratio of 30s and 40s took up 66 percent of all Kia Flex users, 73 percent for Hyundai Selection users, and 77 percent for Genesis users, according to the group. Younger 20s who just started their career and thus have little financial means to buy a car also account for 10-20 percent of the entire subscribers.

“To a manufacturer, car subscription service is a new channel to promote new products because users’ satisfactory experience from the mobility subscription service can lead to actual purchases,” said an official from Hyundai Motor.

Startups are also active players in the country’s vehicle subscription market.

Mobility startup The Trive Inc. recently launched its used car subscription service dubbed Trive, which allows users to drive both Korean brand cars and foreign import cars for six months. Luxury supercars costing hundreds of millions of won also are available on a monthly fee of up to 9.35 million won.

Hyundai Motor Group’s auto financing unit Hyundai Capital Services also provides a subscription program for Hyundai Motor and Kia’s used cars of less than five years old.

Hyundai Motor now is expanding its subscription program to all vehicles for promotion with various experience services. Users are allowed to add more options like a 50,000 won discount for taxi fares, 20-time free ride on electric scooters, and unlimited access to music streaming.

Later this year, the Korean auto giant will launch electric vehicle battery subscription service with a plan to rent EV batteries to electric taxis and trucks.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]