HYUNDAI has become the first car-maker in Australia to begin rolling out a full service subscription model that will include all its vehicles and forge a closer relationship with its franchise dealers.

After announcing their intention to work together last October, subscription provider Carly, which is part of listed public company Collaborate Corporation Ltd, and Hyundai Motor Company Australia (HMCA) are looking to subscriptions as a pathway to getting more Hyundai cars on to Australian roads and more profit for Hyundai dealerships.

The subscription system is simple, appearing as a type of rent or lease but with all the vehicle costs bundled into one monthly fee. Additionally, customers of Carly have no involvement in any financial detail of the vehicle other than that payment.

Crucially, subscribers can hand the car back with just a month’s notice or swap into other cars that are more suitable for their current needs.

Cars are sourced from dealers who retain ownership and from defleeted vehicles owned by fleet leasing companies.

For the dealer, the process is easy. The CEO of Collaborate, Carly’s parent company , Chris Noone, told GoAutoNews Premium that the company provides a full service for dealers.

“We do all the marketing, we acquire the customers, we verify the customers, we collect the payments and provide the insurance for the vehicles,” he said.

“Essentially, everything is done for the dealer and all they have to do is hand over the vehicle to the customer.”

There are one or two other dealer duties – such as greeting the customer and photographing the vehicle at handover and at the return, to record any damage – but basically it’s a set and forget business deal for any Hyundai dealer that has signed up with Carly.

HMCA senior manager of business planning and CX innovation, Nicholas Vasilevski said company vehicles had been with Carly customers for about a month and he expects Hyundai dealers to begin participation within two months.

“We are still in the planning and modelling stage for how dealers will work with Carly,” he told GoAutoNews Premium.

“Despite the virus, we have very good response from customers and 30 per cent of the HMCA vehicles offered through Carly were taken up very quickly. That indicates how strong demand is for a different mobility solution.”

Mr Vasilevski said customers were a mix of young and older motorists and said another few months would reveal more accurate customer demographics.

In a statement, HMCA CEO Jun Heo said: “The future of personal mobility will not be based solely around vehicle ownership, and Hyundai will adapt to changing consumer demands.”

“Through this partnership with Carly we will provide consumers with more choice, an alternative to purchasing a vehicle, which for some drivers may better suit their ever- evolving lifestyles.”

Mr Noone said: “Customers book the vehicle online through Carly and we have a Hyundai branding page showing all the Hyundai vehicles.”

“The pickup is from the dealer location and the dealer does the servicing and maintenance of the vehicles. The dealer retains ownership of the vehicle.”

Mr Noone said that because the subscription business model is new, most dealers don’t have a lot of experience.

“That is where we help. We don’t have the dealerships, we don’t have the cars and we don’t have the staff on the ground. That’s why the partnership is very effective,” he said.

“It’s the best of what we do and the best of what the dealer does. We provide training for the dealer on how subscription works, how to attend to the customer and the handover and vehicle inspection process.”

Mr Noone said Hyundai dealers with initially offer new Hyundai cars but in the future there will be the ability to include used cars.

“We have some cars from HMCA on fleets as well as dealers, but Hyundai made it very clear to us that they wanted their dealer network involved with Carly,” he said.

“For HMCA, it gets more Hyundais on the road but it’s also a way of getting more business through the dealers.”

Mr Noone said subscription services give customers options about their mobility.

“If there’s anything in the future that they can’t predict, they can change their vehicle to a different type that best suits their needs,” he said.

“Consumers don’t actually change vehicles very often. I think they are comfortable that they can change, rather than actually changing.”

Carly is not only for private users. Mr Noone said fleets and businesses can subscribe to these vehicles.

“There is no restriction. Subscription is a tax deductible expense and we are seeing more businesses use Carly because they can get cars when they need them and reduce their fleet quickly when they are not needed.”

By Neil Dowling