A great time to be in the car subscription space

Back in 2017, I met with Toby the founder of Wagonex . I remember him going through the model of #carsubscription with me. I had also had other similar companies pitch to me in 2016 and if I am honest, whilst in the case of Wagonex I liked Toby and the company, I was not massively convinced that this wasn't just another fad in the startup world. I had seen Drover years before and the numbers for me just didn't stack.

Oh, how wrong I was! Note - we don't always get it right. On that note, I should say well done to Wagonex on their recent announcement with car insurance FTSE 100 Admiral Group Plc Insurance. AAM Group and Mycardirect know Wagonex well, as we use the tech platform and supply Wagonex vehicles for their subscribers.

Car subscription is a hot topic this year. The US market appears to be coming off the blocks in some ways but I can see very soon it is leading the way and already since January of this year it's very clear a lot more companies are joining the space and brand leaders becoming apparent. The UK is a big marketplace. Only the other month I spoke to Rob Jolly at Onto and we both agreed there is plenty of opportunity for all companies. Europe feels like a brave market to tackle, even more so than the US (never thought I would say that) but for those like Onto who announced plans this year to tackle Europe, we hope Rob and his team have the best of luck and hope it goes well.?

Mycardirect was started back in 2020 by the AAM Group (Alliance Asset Management Ltd) (formerly known as? Alliance Asset Management) at a time that the world went through some massive change. Change that I think may have helped the car subscription world. MyCarDirect has seen massive growth, this year turning over ￡7m in revenue, breaking even, and turning business away. Yes, you heard me correctly, turning business away. Even in a short space of time, we have learned what is good business and the business we don't want.?

Trends are now emerging, something that has surprised me and is different from what was expected all those years ago when Toby and I chatted.?

Cazoo Subscription, another client we supply cars to, we have seen change their operations and will be closing shop. There will be others I am sure in the coming years that have to change business models or no longer exist. Sometimes being first to market doesn't mean you win.?

MyCarDirect has plans for the US market. Already we have been looking and firming up partners in the US market. Subscription for vehicles is very localised and some early-stage companies are doing a great job, ones we look to work with. Finn and Autonomy seem to lead the way the US country spread wise.

What does the future hold? I am probably the wrong person to ask going on my previous track record with car subscriptions. For me, it's about value added to the customer whether they be B2B or B2C. Our egg partnership demonstrates this.? I think deal margins will come under pressure and I think the way you pay for your subscription will change slightly over the course of 48months. There is also a trend towards Electric Vehicles #evs , certainly a trend we see in B2B, but people still want the choice of petrol and diesel. Remaining flexible with terms, and making sure a customer knows exactly what they are paying for will also become more evident.?

Then there is the P2P element with another AAM Group customer and partner, Hiyacar . The Hiyacar team has been around since the start! It's clear that a generation is going to want to use P2P more than ever over car ownership. Take a look at Turo and Getaround in the US to see how quickly this market has grown.

MyCarDirect and AAM group are excited about the future. It won't be without times of major challenge, there will be change, things will go right and some things may be less so. But we have a team enthused by the future and I wish all in the car subscription space a great success.

David Murray-Hundley The Grumpy Entrepreneur Murray-Hundley

CEO Pario Ventures www.parioventures.com

Chairman AAM Group (Alliance Asset Management Ltd) Group & Mycardirect