An emerging key trend in the automotive and equipment finance sector is the switch from ownership to usership, with consumers increasingly looking for pay-per-use assets rather than outright ownership.
The switch from ownership to usership has been most marked among younger consumers in the retail industry, who are increasingly moving to on-demand services. However, it is also now gaining traction across a wide range of industry sectors.
Servitization is defined as a conscious strategy to merge manufacturing and integrated services, offering to provide value-driven outcomes that are both scalable and resilient. This can include auto subscription services offered on a pay-per-mile basis, medical equipment where assets such as scanning machines are leased on a pay-per-scan basis, and robots on production lines offered as pay-per-pick.
Leading asset finance technology supplier White Clarke Group has been leading a major piece of research into the implications of servitization. The study includes in-depth discussions and interviews with over 20 finance industry experts and was conducted by Aston Business School’s Advanced Services Group.
The research examines the driving forces behind the switch from a product-based model to one that is outcomes-based, in addition to changes in customer expectations and examples of servitization in action across various sectors including automotive, healthcare, rail, IT, and agricultural and commercial vehicles. It also analyses the impact of these changes in the auto and equipment finance industry, for manufacturers, captives, banks, independent financiers and fintechs.
Five key findings emerged from the first stage of the study:
“As with many changes affecting the industry at present, we recognize that technology lies at the heart of servitization. This is why it has been vitally important for us to be involved from the outset,” said Brendan Gleeson, group CEO at White Clarke. “We are at the start of the servitization journey and have identified a number of pathways for additional related research to deepen our understanding of the impact, issues and opportunities afforded to us all by servitization.”
White Clarke Group provides end-to-end loan origination, servicing, collections and floorplan/wholesale finance technology to the automotive, consumer and equipment finance sectors. It is a global organization employing around 600 professionals, with offices across North America, Europe and Asia Pacific.
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