1. NIO launches subscription car rental in Europe?
According to Pengpai News , "The subscription model has the opportunity to obtain a higher gross profit margin than selling cars, which is undoubtedly."
At the NIO Berlin 2022 media communication meeting on October 8, NIO Auto CEO O Li Bin said that NIO's subscription model in Europe has a good soil and a lot of room for development, but at the same time, the subscription model highly tests the company's operational capabilities, and for NIO, which has penetrated into the hinterland of old car companies, it may be more challenging than selling cars.
On the evening of October 7th local time, NIO held the NIO Berlin 2022 event in Berlin, Germany, and announced that it will start providing services in the four countries markets of Germany, Netherlands , Denmark, and Sweden . This is NIO's further business in the European market after entering the Norwegian market last year. The difference is that NIO will open reservations in the above four markets in the "subscribe mode".
NIO introduced that the subscription model is designed to provide users with sufficient flexibility and personalization, and the vehicle subscription period ranges from 1 month to 60 months. Unlike car rental services, this subscription model is "one price and all inclusive" in addition to electricity bills. In addition to using the vehicle, users can also obtain services including full insurance, maintenance, battery replacement, flexible battery upgrade, winter tire replacement and other services. Subscribers will become members of the NIO user community, participate in various user activities organized by NIO, use the NIO center, etc. In terms of
price, taking Germany as an example, the short-term subscription price is 1,249 euros to 1,549 euros per month, and the long-term subscription price has dropped to a certain extent. For example, the price of the 36-month subscription period is 999 euros to 1,199 euros per month.
2. Will anyone really rent it for thousands of euros per month?
To be honest, when many people see this subscription service launched by NIO, this service is neither like car rental nor the traditional car selling model. So what should we think of this subscription model?
First of all, we carefully study the so-called subscription model of NIO, which is actually a very special model. The core logic of this model is to say that subscribing to us to magazines, or to purchase monthly cards for online reading platforms and video platforms, the subscription method can effectively promote consumers to use cars at a lower cost. Under such circumstances, for users who have relatively little savings or have poor consumption capacity, they only need to spend less money to own a car of their own, and there is no need to consider a series of issues such as car depreciation, because in essence, the subscription model is also a rental model. Therefore, for European and American countries, especially for this kind of rental car market, adopting the subscription model is undoubtedly a relatively good choice.
Secondly, let's take a closer look at the reason why NIO adopts this non-traditional subscription model, which is actually a special model developed by NIO after carefully studying the entire automobile market. Last year, NIO entered the Norwegian market, but in the first half of this year, NIO sold only more than 500 vehicles in the Norwegian market. Therefore, under such circumstances, it is actually very difficult to open the market. Then using a non-traditional direct sales form to help NIO open the market subscription model has become a good choice. After all, for Europeans, NIO is still a relatively new type of car. Whether it is brand influence or market appeal, it is not as good as traditional European brands. So under such a background, it is actually a better choice to make users willing to accept NIO through a lower cost.
3. From the perspective of long-term market development, if the subscription price is relatively reasonable, the subscription model actually has its market space in the domestic market. The core reason is that everyone has been complaining over the years. Relatively speaking, the value retention rate of these new energy vehicles themselves is too low, and the cost of replacing batteries after a period of time is too high. If users can help users accept this car at a lower cost through the subscription model, it will undoubtedly be a relatively large market update for new energy vehicles. The logic of this model is similar to the logic of launching automobile finance by General and Ford Automobile , allowing users to enjoy it as soon as possible with less money, but the car does not have to bear the series of risks behind the car. This can undoubtedly better promote users to use your services and purchase your products.
