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DESPITE trends in the US for OEMs to shutter their in-house subscription offerings, subscription services for cars in Australia continues to expand with major players reporting growth.

Now, Loopit – formerly Blinker – has announced this week that it was expanding into New Zealand in a partnership with the vehicle retail and distribution company The Giltrap Group and global car rental firm SIXT.

The partnership has been presented as a pilot program that, if successful, could springboard Loopit’s software into other markets.

Instead of being a third-party service being operated on behalf of dealers, the Loopit subscription IT platform offers dealers full control of the running of their own subscriber service to their own customers and profiting from the income generated on their own cars.

Giltrap Group, NZ’s biggest car retailer and in operation since 1966, represents 17 car brands in New Zealand, including Aston Martin, Audi and Volkswagen.

The new subscription service will include luxury cars and electric vehicles, with the flagship models being the Range Rover Velar and Audi E-Tron.

Giltrap will offer Loopit’s car subscription service under the SIXT Subscribe+ branding.

Loopit, operated by HelloCars which is run by brothers Michael and Paul Higgins, said it had a 52 per cent increase in inquiries from dealerships wanting to integrate subscriptions into their business.

“The COVID-19 pandemic saw new-car sales at an all-time low and led to increased interest in subscription from dealerships wanting additional revenue,” Mr Higgins said in a statement.

“Our technology has already proven a success across Australia, and we’re excited to bring this innovative solution to dealers in New Zealand.”

SIXT’s subscription gives NZ motorists flexible car use options of six, nine or 12 months with a guaranteed brand-new vehicle.

The Giltrap Group general manager for business development, Dane Fisher, said subscriptions provided an opportunity for dealerships to innovate and cater to shifting consumer demands.

“We’ve already seen the subscription solution gaining popularity around the world and we expect it to rapidly become a significant part of the automotive world moving forward,” Mr Fisher said.

“As a business, we aim to be at the cusp of industry innovations and our partnership with Loopit is just another example of this.”

Loopit started in 2019 and now partners with automotive businesses including Titan DMS and Dealer Solutions – which is part of Cox Automotive – providing access to more than 1000 dealers nationally.

It announced in July it would be exporting its industry-leading technology to New Zealand, the Middle East and the United Kingdom.

Most of Loopit’s revenue comes from established car dealerships, OEMs and emerging car subscription providers which pay a percentage of the value of each recurring subscription placed by customers, plus a fixed fee.

The company had previously forecast “underlying sales by participating providers to reach $38 million” for 2020 based on existing dealer performances. Asked if that target had been met, the company referred GoAutoNews Premium to its upcoming financial figures due later this month.

Another major car subscription provider, Carly, has also seen record growth through 2020 despite COVID-19 which shows the rising level of interest by individuals and also fleet operators.

In addition, Carbar CEO Des Hang said the subscription model will play “a huge role in 2021 and beyond.”

Carbar has just announced it was partnering with energy provider AGL and charging company JET Charge to supply a selection of EV models to Brisbane-based consumers. This comes after entering the Sydney and Melbourne markets.

“If I had to put money on it, I’d wager that in a post-COVID-19 world more services will become subscription-based – including things that we never imagined [will] be a subscription too,” Mr Hang said.

Carbar in September reported that because of the higher price of EVs, 69 per cent of respondents to its survey said they would prefer to drive an EV via a subscription model. This compares with financing a new car (11 per cent) and buying one outright (5 per cent).

By Neil Dowling

Manheim
DealerCell
Schmick