Earlier this month a certain Chinese car manufacturer published its company results and, in the process, claimed to be the world’s fastest growing brand.
Heralding consumer deliveries up 20.81% compared to the first half of 2018, it announced half year sales of 55,877 vehicles.
The brand in question: Lynk & Co.
Describing itself as the world’s first new mobility brand, Lynk & Co are fashioned more as a lifestyle brand than a vehicle manufacturer.
It squarely targets young urban consumers, driven by in-car internet connectivity, vehicle sharing and subscription models of usership. 53% of its customer base are under 35.
But while few outside China will have heard of Lynk & Co, things may be about to change – they are heading to Europe and the UK in 2020.
Lynk & Co’s owners – Geely – are a manufacturing behemoth who only entered the world of automotive in 1997.
Backed by a surging home market, Geely are snapping-up Western brands, having acquired Volvo, Lotus and the London Electric Vehicle Company (LEVC).
While Volvo represent the premium end of the Geely portfolio, Geely is an upmarket alternative, designed in Sweden using Volvo’s modular vehicle platform, as used in vehicles like the XC40.
In China, all models are sold through company owned stores and via the ecommerce platform Alibaba, with no dealers involved. They come in one high spec variant, fixed at a no-quibble price.
While value and spec are one dimension of Lynk & Co’s value proposition, the more interesting angle is their approach to shared ownership, based on a smartphone App that allows a group of people to buy and share a single car.
The cloud-based system also enables owners to rent out their vehicle when not needed. In the process earning money in much the same way as renting a room via Air BnB.
It remains to be seen whether Lynk and Co manage to persuade Western buyers to surrender the freedom and sense of personal space that traditionally goes with car ownership. However, one thing is clear: the car market is bracing itself for a new era of transportation, increasingly focused on the concept of Mobility as a Service (MaaS).
Shared Social Mobility
Frost & Sullivan, the international Market Research firm, reckon that car subscription programmes will be worth almost $100 billion dollars by 2025, accounting for nearly 10% of vehicle sales in Europe and the US.
Given this backdrop, manufacturers are tentatively launching their own subscription models including: Audi (On Demand), Ford (Canvas), Jaguar Land Rover (Carpe), Porsche (Passport) and Volvo Care.
Car rental firms and leasing companies are following suit with similar “fractional ownership” and shared usage models. While private car sharing platforms like Drivvy and Turo are enabling car owners at large to rent out their vehicles to generate cash from a vehicle that might typically remain idle for 96% of its lifespan (source: RAC Foundation).
While each of the above presents a proliferating range of options for transportation, its clear there is no “one size fits all” model.
Car sharing platforms like Drivy as well as ride-hailing models like Uber and Lyft may work well in urban areas, where an available vehicle or a driver can be found on nearly every street corner. Apps may also provide connected journey solutions, enabling passengers to segue between vehicles and different forms of transport as they traverse cities.
But in rural locations where consumers need on-demand transportation to travel longer distances, car ownership may be difficult to resist.
As options fall into place one paradigm seems to ring true: flexibility and choice.
Within that sea of choice, temporary insurance models like Tempcover provide a compelling opportunity for individual freedom. The choice to share vehicles and journeys with others; insuring friends, families or even strangers to use your vehicle on an ad hoc basis.
It’s a model that should help share the increasing cash-burden of car purchase and ownership – splitting costs between users.
While Lynk & Co may well send ripples across the automotive marketplace, they are likely to be just one of a myriad of transportation options that could, over the course of the next two to three years, become all too familiar to us all.
