New Delhi: The Car as a Service (CaaS) model is emerging as a convenient form of driving for urban transport today. The CaaS market size is expected to reach a value of $ 187.05 billion, at a CAGR of 18.83%, during 2021-2025, according to the latest Technavio research.
According to the report, factors such as a wide range of vehicles with a single subscription package are expected to significantly support the market growth during the forecast period. However, the growth momentum is expected to slow to a CAGR of nearly 19% during the forecast period.
“The availability of a wide range of vehicles with a single subscription package is a key factor increasing the growth of the car as a service market. The user can own a car by paying the subscription or the rental fee for a week, a month or a year using CaaS. Using the service, users can switch between different cars under a single subscription or rental plan. Each subscription plan has its own terms and conditions, ”the report adds.
He further mentioned that some plans include long term rentals that allow users to change cars daily, monthly or weekly. Some plans are similar to leasing but for a shorter duration, while some plans are particularly targeted at 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 and the financial support of potential driver service providers, the study noted. However, the availability of auto finance will hamper the growth of the market, he stressed.
“The unprecedented COVID-19 outbreak last year has impacted market segments which has had a ripple effect on various stakeholders. To make the most of opportunities and recover from the post COVID-19 impact, market vendors should focus more on growth prospects in fast-growing segments, while maintaining their positions in slow-growing segments. The report says.
The report further states that increasing urbanization encouraging sellers to expand their ridesharing services will have a positive impact on seller growth. On the other hand, the increasing use of public transport is expected to reduce the growth potential of the market.
According to the report, 47% of the CaaS market growth will come from APAC during the forecast period. China and Japan are the key markets in the CaaS in APAC market. This report includes proprietary insights into potential business locations and includes demographics of current and potential customers.
“APAC has shown a significant growth rate for providers in the CaaS market. Factors such as the increasing pollution level in China and the level of congestion on the roads are accelerating the growth of the car-as-a-service market in APAC, ”he added.
Moreover, the CaaS market share growth in APAC will be faster than the market growth in other regions.