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Volvo, please bring your subscription model to Malaysia!

Business models are changing all the time, things that used to be expensive and hefty in terms of a CAPEX layout is now changing with subscription models. In IT, the likes of cloud, software and platforms as a service is now prolific that if you talk about building your own server hardware, you would be considered a dinosaur unless it is a mining rig. Now in the US, Volvo is going ahead with the same model for cars.

Instead of purchasing a car upright, Volvo is charging USD$600 per month onwards to lease out its XC40 compact SUV. The only catch, you need to sign a 2-year contract. But that is ok because we seem to be in an era where smartphones are priced at RM5,000 and 2-year contracts help reduce the cost and spread it out.

The program is called Care By Volvo and they plan to start it in 2018 and for what you pay on a monthly basis (depending on the model you are leasing), you get the following items included.

  • The all-wheel drive XC40 with a turbocharged 2.0 liter 4-cylinder engine, heated front seats, heated steering wheel, panoramic roof, 19-inch wheels, trimmed with Volvo’s “Premium” and “Vision” packages, which includes features like lane keep aid, collision avoidance assistance, and adaptive cruise control
  • 24-hour customer service with roadside assistance
  • Factory scheduled maintenance
  • Tire and wheel damage protection, and “wear and tear replacements” on things like windshield wipers and brakes (provided you drive fewer than 15,000 miles per year ~24,000km)
  • Premium personal insurance provided by Liberty Mutual (there’s a $500 deductible, and it includes “$250,000 bodily injury protection per person and $500,000 bodily injury coverage per accident”)

New Volvo XC40 – exterior

At RM2450 per month, that is definitely not a bad deal at all. Remember this includes factory scheduled maintenance and wear and tear replacements. Now, I really wished that Volvo and other car manufacturers will offer something like this here in Malaysia.

Just like with mobile phones, Care By Volvo subscribers will also have the option to trade in the XC40 for a new model 12 months into the subscription, which will trigger a new 24-month contract. So from owning the latest and greatest iPhone model each year, now there is a possibility you can be driving a newer car every two years.

This model can’t arrive here any sooner!