A startup backed by Jaguar Land Rover is unveiling a vehicle underwriting program to appeal to the wealthy millennial generation that doesn’t want to buy or lease a car.
Pivotal, backed by JLR’s venture capital unit InMotion, will offer a six-month subscription for drivers in the continental UK starting at £ 750 ($ 934) a month for a Land Rover Discovery Sport or Range Rover Evoque, according to the company’s website. The high-end Range Rover will cost £ 1,600 a month. The payment will cover taxes, maintenance and insurance, and customers can cancel their subscriptions after three months, Pivotal said.
Other companies have announced similar programs: Volvo Car AB will introduce a subscription service, Care by Volvo, in September. London-based startup Drover Ltd. partnered with BMW AG to offer an alternative to car ownership. And in the United States, Volkswagen AG’s Audi unit offers subscriptions for its cars, starting at $ 1,495 a month.
Daimler AG’s Mercedes-Benz brand introduced a U.S. subscription service in 2018, but disconnected the two-year-old pilot, Automotive News reported last month.
With new car sales plunging amid the coronavirus pandemic and people reluctant to return to public transportation, automakers are looking for ways to stimulate demand. Jaguar Land Rover, owned by Tata Motors Ltd., said in a statement that it expects subscription services to account for almost 10% of all car sales in the US and Europe by 2025.