CEO Olivier Kofler on the finances of the Swiss car subscription pioneer: What is Carvolution doing with 200 million francs?

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Olivier Kofler, are you hungover? The 200 million franc financing from Britain’s Barclays Bank and the US’s Waterfall Asset Management was of course widely celebrated at Carvolution.

Olivier Kofler, Carvolution CEO: (Laughs.) No, no. It’s hard to believe, but we only toasted with a small beer. That wasn’t enough for the hangover. But the happiness in the team is great. Thanks to this financing, we are able to meet the rapidly increasing demand for our vehicle subscriptions.

What will Carvolution do with this money?

It is used solely to fund our growing fleet of vehicles and therefore is only used to purchase new, additional cars.

Is there a wider choice of vehicles then?

First of all, there will be more vehicles, so customers can receive their cars as quickly as possible and benefit from the attractive all-in-one price. A wider model range is expected, especially in the field of electric vehicles, as many new models are coming to the market from manufacturers.

Does financing from abroad also mean opening up abroad?

No, not right now. We believe that Switzerland is our market and we want to do a great job here. Although it may sometimes seem tempting to expand abroad, it is more important for us, as the market leader, to provide an excellent customer experience at the local level.

Barclays Bank described Carvolution as “an exemplary start-up in the mobility sector”. What do you do differently than other subscription providers?

I think it paid off because we were so focused from the beginning. We decided to become a car subscription provider and we are doing so very consistently. This means that we can always focus 100% of our processes, decisions and developments on delivering a very simple and inexpensive automotive solution to our customers.

You challenged the automobile industry with your new car subscription in 2018. Where does courage come from?

Courage, if you want to call it that, comes from the belief that car subscriptions have enormous potential. Additionally, our team has the skills and motivation to offer a solution that offers many drivers an advantage over renting or purchasing.

Manufacturers and importers also now offer their cars as subscriptions. Apart from renting or buying, what makes the model so attractive?

Our customers point to low and clearly calculable costs as the main reason. Because a car subscription, unlike a rental fee, is an all-in-one price that covers everything from insurance to tires, you know your total costs. They also benefit from the fact that at Carvolution we deal with all matters related to cars. This means we take your vehicle back, insure it and deliver it directly to your door if desired. Subscribers can easily order the car digitally and manage it later via the app. Overall, the subscription is a combination of attractive price and simplicity.

When it comes to car subscriptions, proven car experts such as Ferdinand Dudenhöffer expect their market share to grow rapidly. It seems investors believe in growth, too. Why will subscription continue to grow?

Forecasts say that by 2030, about 40 percent of new cars will be subscription-based. The combination of straightforward and low costs, the flexibility of only having to use a car for a few years rather than half its life, and the simplicity of digital processes are absolutely convincing.

How does your subscription model differ from rental? Both models involve using or renting a vehicle for a certain period of time.

You can have the car you want when renting, but the selection at Carvolution is currently limited to around 60 models. You also cannot configure the subscription cart yourself. Thanks to this restriction and because we buy all of our cars in large quantities, we can offer much lower prices. We also bundle insurance, taxes, tires and vehicle maintenance with the subscription. Car subscription offers all-in-one pricing and is more flexible in terms of mileage and contract duration. This means customers get the highest price for a comprehensive package and benefit from lower overall vehicle costs.

For a long time, Carvolution touted that, unlike leasing, no down payment was required. You now offer multiple vehicles with down payment and, accordingly, lower monthly fixed prices. From where?

You never stop learning, even with your own product (laughs). We are currently testing the down payment issue. But it seems to be a need of customers because it is often expressed as a wish. The concept of down payment through leasing is known and becoming widespread. Everyone who pays a deposit benefits from significantly lower monthly costs.

The Swiss mobility barometer shows what other studies have already proven: many car owners underestimate the total cost of the car. Carvolution emphasizes these costs over and over again. Is your customer better informed?

In any case. Accurate calculation of total vehicle costs is actually always the first step towards vehicle subscription. We support our customers as much as we can. We also offer a best price guarantee, promising that our total costs will be lower than leasing. Anyone who is unsure should not hesitate to get in touch. We will then help you compare costs. If we are more expensive, we will lower our price.

Source: Blick