The car as a Service (CaaS) model is emerging as a convenient form of driving for urban transportation ths days. The CaaS market size is expected to reach a value of USD 187.05 billion, at a CAGR of 18.83%, during 2021-2025, as per the latest Technavio Research.
According to the report, factors such as a wide range of vehicles with a single subscription package are projected to significantly support market growth during the forecast period. However, the growth momentum is expected to decelerate at a CAGR of almost 19% during the forecast period.
“The availability of a wide range of vehicles with a single subscription package is a key driver augmenting the car-as-a-service market growth. The user can own a car by paying the subscription or rental fee for a week, month, or a year by availing CaaS. By availing the service, users can flip between different cars under a single subscription or rental plan Every subscription plan has its own terms and conditions,” the report added.
It further mentioned some plans include long-time rentals that allow users to switch cars on a daily, monthly, or weekly basis. Some plans are similar to leasing but for a shorter duration, while some plans are particularly targeted to the luxury car segment, where convenience and comfort are of paramount importance.
The market is driven by factors such as the wide range of vehicles with a single subscription package and financial support by service providers to potential drivers, the study highlighted. However, the availability of automotive financing will hinder the market growth, it pointed out.
“The unprecedented outbreak of COVID-19 last year impacted market segments that have had a ripple effect on various stakeholders. To make the most of the opportunities and recover from the post-COVID-19 impact, the market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments,” the report said.
The report further said that the rise in urbanization encouraging vendors to expand their ride-hailing services will have a positive impact on the growth of vendors. On the other hand, the growing use of public transport is expected to reduce the growth potential in the market.
As per the report, 47% of the CaaS market growth will originate from APAC during the forecast period. China and Japan are the key markets for the CaaS market in APAC. This report encompasses exclusive information on potential business locations and understands the demographics of current and prospective customers.
“APAC has been exhibiting a significant growth rate for CaaS market vendors. Factors such as the rising pollution level in China and the level of congestion on roads are accelerating the car-as-a-service market growth in APAC,” it added.
Furthermore, the CaaS market share growth in APAC will be faster than the growth of the market in other regions.