This story was first published on INDVSTRVS Magazine by By Joanne Leila Smith.
For a nation that is notoriously expensive to drive and own cars, the Singaporean car market is set for a revolution with Carro, South East Asia’s largest automotive marketplace launch of a monthly-flat fee product that includes car ownership, insurance, maintenance, 24-hour assistance and road tax.
Millennials rejoice. What seemed unobtainable for many in Singapore is now possible with Carro offering Singapore’s very first subscription-based car service.
Consumers are given the flexibility of selecting a plan and driving off with a car of their choice without the huge upfront expenditure – and immediate depreciation – of traditional car ownership.
With a large expat community and growing millennial population, Carro’s move seems to tap into the trend for consumer convenience without encumbrance.
The subscription-based service means users can pay a flat monthly fee that includes all costs associated with car ownership – insurance, road tax, warranty, 24-hour assistance, and maintenance costs. Customers are also entitled to return the car with a no questions asked policy about minor wear and tear, dents and scratches. CEO and Founder of Carro Aaron Tan explains why this value offering is needed now.
“A typical person takes nearly six years to pay off their car loan, two thirds of them even trade in their vehicle before they’ve paid it off, picking up yet another loan. Car ownership in Singapore has reached an inflection point and this offering is going to revolutionise car ownership in the country. We are empowering consumers with the flexibility to drive the car of choice with the option to return it at any time, no strings attached,” says Tan.
Tan says Carro’s subscription-based service is available in three plans –
Daily | $1,199 a month plan is targeted at individuals or small families in brands such as Volkswagen Golf and Toyota Altis
Roomy | $1,499 a month plan is for families who need sufficient boot space in SUVs and 7-seater cars; and
Fancy | $1,999 a month is a luxury plan for consumers who crave Mercedes, BMW or any other European gem.
“Users no longer have to stick with the same type of car for the full period of ten years. Car owners can start out with a compact vehicle, move to an SUV or MPV when starting a family, and eventually upgrade to a luxury car. Users can choose to return the car anytime, forget about the need to sell the car after using – a truly hassle-free car ownership experience,” says Tan.
Carro’s footprint includes Singapore, Thailand and Indonesia. The company is the region’s largest automotive marketplace – having transacted over USD 500 million worth of cars in 2018.
The past few years have seen auto manufacturers in South East Asia compete with low-interest financing and incentives to drive car purchases. In the region, sales of new cars increased for a third consecutive year in 2018, rising 6% and breaking the previous record set in 2013.
Thailand marked a 20% jump in sales, and in Indonesia, sales grew 7%. The total sales among six nations, including Malaysia, the Philippines, Vietnam and Singapore, totalled a record 3.57 million units in 2018.
Despite strong performance in 2018, a slowdown for export performance in the region is projected for 2019, on the back of the slowdown of exports from China and US auto-manufacturers, which are largely due to trade tensions between the two nations.