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Volvo, Cadillac and Porsche drive subscription model growth

Carmakers are launching rental services even as peer-to-peer car lending platforms gain traction

Once every teenagers’ dream was to have their own car. Now they have an app for that.

Volvo, Cadillac and Porsche are among brands that have launched subscription deals this year, as the industry dips its toe in the water of a world of selling services rather than cars.

As car ownership begins to wane in some major cities, manufacturers are experimenting with ways of providing transport ranging from car-sharing schemes to on-demand booking through smartphone apps.

“We’re making the change from selling cars to selling mobility,” says Alain Visser, chief executive of Lynk & Co, a new brand co-owned by Volvo and its Chinese parent Geely. By bundling insurance, road tax and maintenance costs into a single monthly sum, carmakers hope to take the hassle out of running a car, as well as attract new customers to their brands. Lynk & Co, which will launch its electric car subscription offer in China next year and Europe in 2019, plans to allow motorists to change vehicles every month, and dip in and out of the contract as often as they like.

“The key is flexibility,” says Mr Visser, adding that consumers, which Lynk expects to be younger than traditional buyers, may decide not to have a car in the summer months if they travel, or may want to take the bus for a short while to save money.

Volvo, which co-owns Lynk & Co, and its super-premium performance brand Polestar, both also offer subscription services that allow customers to switch between vehicles.

But this comes at a price. Porsche’s Passport service, unveiled earlier this year, is twice as expensive as buying one of its cars on pay-monthly finance because consumers can flit between different cars in its range.

This flexibility, being able to swap a small family SUV for the school run for a sports car at the weekend, raises a fresh potential problem.

“The difficulty in those schemes will be managing the supply, because everyone wants an SUV in winter and a conve