Apple strategy teardown. Lyft raises extension. Auto commerce market map.
No strings attached
As 2017 draws to a close, momentum in auto commerce financing has only continued to accelerate. Used-car marketplaces have been especially hot, with $100M+ financings going to Chinese (SouChe, Chehaodao) and European (Auto1 Group) players. InstaCarro also raised $22M this week to expand its Brazilian marketplace.
OEMs have raced to experiment with new retail and go-to-market models. The car-subscription concept has been gaining traction for some time, and automakers are now announcing all-inclusive subscription programs at a furious pace.
Below are just a few recent developments, with the Volvo and Lincoln news both coming from the L.A. Auto Show:
Subscriptions are distinct from traditional leasing, with a commitment-free model bundling in services like insurance and maintenance. Most programs also offer members flexibility to rotate between vehicles at certain intervals.
There are notable divides between the OEMs and startups experimenting with these models; automakers obviously have access to a deep pool of the latest vehicles off their line. By contrast, subscription startups like Fair and Carma have built their fleets with (or partnered with dealerships for) used vehicles.
Though lacking new-car smells and the freshest tech, this model does present the opportunity to capitalize on the used car glut (especially in the US). Vehicles coming off post-recession leases have flooded the market, depressing valuations:
Although new car sales have plateaued in this saturated market, startups and automakers are banking that subscription models will carve out a new niche for the future.
Tearing down Apple
Our latest strategy teardown focused on the world’s most valuable company: Apple.