Car subscription models
: chinese EV producers and the german B2C car market

  • Tim Klintwort (Student)

Student thesis: Master's Thesis

Abstract

The automotive industry is experiencing rapid transformation, driven by the shifts towards electric mobility, autonomous driving, connectivity and new car usage models, creating opportunities for new entrants to challenge established players in markets that long seemed untouchable. This thesis examines whether car subscription models can serve as an effective market entry strategy for Chinese electric vehicle (EV) producers to gain a foothold in the German business-to-customer (B2C) car market. A mixed methods approach, combining qualitative interviews with industry experts and a quantitative survey with potential customers, was used to assess the viability of this strategy. The findings suggest that while Chinese producers possess dynamic capabilities and technological innovations, they still face significant market entry barriers that arise from negative user perceptions, lack of brand recognition, the need for building distribution channels, potential tariffs and capital requirements. Car subscriptions, which offer a low-commitment entry option for potential customers, are especially attractive for customers who´s negative perceptions manifest in experiencing social and performance risk towards the car and can provide a more capital-efficient entry by reducing the need for extensive dealership networks. However, the study also highlights operational and financial challenges associated with car subscriptions, such as managing vehicle returns, maintaining service networks, and ensuring sustainable revenue streams. It concludes that while subscriptions are a promising strategy for market entry, they should be part of a broader multi-channels sales strategy, which long term success is highly dependent on the companies9 ability to convince the customers of their brand during the subscription period.
Date of Award17 Oct 2024
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorPeter V. Rajsingh (Supervisor)

Keywords

  • Automotive industry
  • Car subscriptions
  • China
  • Dynamic capabilities
  • Electric vehicles
  • Germany
  • Market entry barriers

Designation

  • Mestrado em Gestão e Administração de Empresas

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