How is Collaborate Addressing The Lucrative Car Subscription Opportunity?

  • Sep 27, 2019 AEST
  • Team Kalkine
How is Collaborate Addressing The Lucrative Car Subscription Opportunity?

The automotive industry is currently going through enormous disruption with new vehicle sales in Australia declining by 10%, and fallout from the banking royal commission making it more difficult for car buyers to obtain finance.

A generational shift is also occurring with younger generations (under 40 years old) increasingly viewing long term ownership of car as a burden. Due to this, car dealers and manufacturers are struggling with declining sales and low profit margins.

The consumer’s shift from vehicle ownership to vehicle access has given birth to the Car Subscription opportunity. One company which is currently leading the Car Subscription revolution in Australia is Collaborate Corporation Limited (ASX: CL8)

Collaborate Corporation Limited is focused on ‘collaborative consumption’, ‘peer-to-peer’ or ‘sharing economy’ business model with a strong focus on mobility solutions. The company’s businesses include:

  • Carly - Australia’s first flexible car subscription offering;
  • DriveMyCar, Australia’s leading peer-to-peer car rental business;
  • Mobilise- Rental marketplace for under-utilised assets;
  • MyCaravan- Leading peer-to-peer caravan rental business.

Vehicle Access - Challenges and Solution

Below is the snippet of some of the changing trends/preferences in the vehicle access space-

To solve these problems, Collaborate Corporation came up with a solution of Car Subscription. Collaborate has recently launched Carly, Australia’s first flexible car subscription offering, to seize the subscription opportunity which builds on its DriveMyCar business.

Why Car Subscription is Better than Buying a Car?

  • No long-term financial commitment;
  • Choose a car and have it delivered next day;
  • Switch car when needs change;
  • Pause subscription if car is not required;
  • All-inclusive monthly subscription – insurance, registration & servicing.

With a proven technology platform, established automotive industry partnerships, and significant operating experience, the company is well-positioned to address the rapidly emerging car subscription opportunity.

Collaborate leveraging major global trends

Collaborate is leveraging four major global trends, as discussed below-

  • The shift from ownership to access: Younger generations increasingly feel car ownership is a burden which is why they place more value on accessing cars when and where they need them;
  • Automotive Industry Disruption: Consumers are demanding new ways of accessing cars while automotive dealers and manufacturers understand the need to embrace the types of models that Collaborate offers to stay relevant;
  • The uptake of multiple mobility solutions: Drivers are seeking multiple mobility solutions to match their lifestyle and particular needs which can differ on hourly, daily and monthly basis;
  • The rise of subscription services: From mobile phones, to movies and even food, subscription services are an effective way to access a range of products, including cars.

Carly is flexible car subscription platform which provides consumers a more flexible way to access the vehicles with no long-term commitments while providing new sales channel for automotive dealers and manufacturers. Below is the snippet of Carley platform-

  • Listing - Carly manages upload of vehicle images and specifications;
  • Discovery- Customers can view vehicles and subscribe entirely online on mobile, desktop or in a dealership;
  • Marketing- Utilising key channels – search, display, Facebook, Instagram, re-targeting, radio and partnerships;
  • Subscriptions- The Carly’s team processes all subscriptions and provides customer service before, during and after commencement;
  • Verification- Carly performs ID verification and credit checks to mitigate risk of fraud and payment issues;
  • Payments -Carly collects all payments from subscribers and remits funds to vehicle owners;
  • Logistics - Carly organises delivery of vehicles, servicing and accident management;
  • Reporting - Carly full subscriber, vehicle and financial reporting.

Significant Developments

The company has announced various significant announcements, supporting the future growth of Carly vehicle subscription, including:

  • Agreement signed with I-Motor, one of Australia’s leading providers of websites and digital marketing services to Australian automotive dealers, to offer an end-to-end Car Subscription Solution for dealers;
  • Agreement signed with leading NSW dealership group, Suttons Motors to supply vehicles to Carly;
  • Raised $1 million through a placement to a strategic investor, Turners Automotive Group Limited, the largest seller of cars in New Zealand;
  • Collaborate and Turners have also agreed to work together to launching Carly in New Zealand which will enable Collaborate to leverage its existing investment in the technology platform supporting Carly and access a substantial new market.

After the successful launch of Carly in Sydney and Melbourne, the company is now preparing to launch Carly in New Zealand as well and has already secured key registrations to facilitate the launch. In addition to this, the company has also obtained an internet domain ‘www.carly.co.nz’ and has activated a ‘Coming Soon’ page on the website to engage prospective customers of Carly.

Collaborate is further eyeing opportunities to partner with strategic collaborators regarding the demand for and supply of assets for its online marketplaces.

By the close of market trading on 27 September 2019, CL8’s stock was trading at a price of $0.009 a market capitalisation of circa $8.89 million.


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