Olivier Kofler, what is the advantage of a car subscription?
Olivier Kofler, CEO of Carvolution: According to our customers, the answer is relatively simple: you pay less for your car and get better service overall, getting everything from one source. Clearly calculable costs, minimal effort, a wide range of tools from various brands and – the most important thing in most cases – a friendly and organized team that is always by your side with advice and action.
What subscription car does the CEO of Carvolution drive?
Currently a Tesla Model Y from Carvolution. I’m impressed with the value for money and the car offers ample room for my young family. I was driving Skoda Octavia. A year ago, it was the right time to switch to an electric car.
And how often do you change vehicles?
I change my car on average every two years. I don’t drive that often (laughs), my wife does. Because I usually travel by train every day and I usually only use the car on weekends. Still, I want to test different brands myself.
Carvolution won the Swiss Economic Award in the service category in the summer. What does this award mean to you?
We are very happy for that. It legitimizes what we’ve long suspected at Carvolution: car subscription has huge potential and will be an important part of the automotive industry in the future. It is also a great motivation for our team to work for our customers and give their best every day.
What makes your service different?
Personally, I’m very proud to see how Carvolution and the whole team have evolved. This is where an important part of our service comes into play: It’s important that people can easily, flexibly and cheaply subscribe to cars with us. We don’t just want to sell cars, we want satisfied customers. The team is ready to go the extra mile every day.
Carvolution launched its car subscription four years ago. Why do you still have to explain the subscription?
It is the difficulty of estimating the total costs correctly. Many people underestimate the true cost of a vehicle. A car costs more than its purchase price or rental rate. This includes insurance, taxes, repairs, service, new tyres, tire changes etc. is added. Everything is included in the Carvolution subscription. I usually describe using a particular car and deduct the costs associated with the car, such as insurance, taxes, tires, and service and maintenance.
According to the Cembra rental calculator, renting a VW Tiguan R-Line with a list price of around CHF 71,100 and giving you a 12 percent discount costs around CHF 1,249 per month for 36 months. The subscription fee for the same car is 699 francs per month. Insurance, tax, maintenance, etc., which reduces direct vehicle costs to 445 francs per month. You can now lower your costs. This is how I get people to see the great value the subscription has to offer. In this example, you save over 800 francs per month, so the car is almost 65 percent cheaper.
How does the price comparison work?
I even meet people in my circle of acquaintances who compare rental rates with our subscription prices. In such cases, I invite you to take the rental contract, insurance bill and final garage bills and make the correct calculations. If several thousand francs were initially paid, it is immediately clear why the rental rate is lower than the subscription price. For example, if someone made a three-year lease and paid 5,000 francs in advance, the down payment alone would amount to 140 francs per month.
What is the difference between subscription and rental?
The biggest difference is in price. Because the total cost of a subscription vehicle is less than the total costs of a rental vehicle. When comparing, it is important to look at the same model with comparable terms, mileage and no down payment. Another important difference is the choice and ability to configure the car yourself. With leasing, customers can configure each vehicle as they wish. Carvolution has around 70 preconfigured models from various brands to choose from. Customers can freely choose the duration and set the mileage package monthly through the app.
Will the subscription replace renting or purchasing?
The results of various studies show that in the near future, 40 percent of newly registered vehicles will be car subscriptions. The main reason for this improvement is that people are willing to drive pre-configured cars, but in return they benefit from lower costs, greater flexibility and an all-inclusive price. The tense economic situation will likely accelerate the trend further, as households do not want to take any financial risks and, if possible, do not want to have high purchase costs.
What is the secret of Carvolution, why are the prices so attractive? At first glance, this seems illogical.
There are several effects that positively affect low prices: Our purchase prices are low thanks to the very large volumes. We rely on lean, data-driven and highly digitized processes and do not need expensive showrooms. Thanks to our close cooperation with our Swiss garage partners, we have high residual values for vehicles.
With Morten Hannesbo, former Vice President of Auto-schweiz and CEO of AMAG, Carvolution has a heavy weight in the automotive industry on his team. How should this be evaluated?
Morten is a true visionary. It has the foresight and creativity to help shape mobility in Switzerland in a sustainable and future-oriented way. This makes him an important contribution to the team and our board of directors. Carvolution has built one of the largest fleets in Switzerland. It is very important to manage this fleet, which requires a lot of experience and a good network, correctly. It is precisely in this area that Morten will be able to provide us with active support.
How does the auto industry perceive Carvolution?
Overall very positive. Whether garages, body shops or tire partners, we work with over 1000 Swiss suppliers. It took some time to get the industry excited about car subscription and Carvolution. But today, most of the worries and fears are gone. Our partners see the benefits and the collaboration provides added value for everyone involved.
The automotive industry has had major delivery problems over the past two and a half years. How did this affect Carvolution?
We felt it like everyone else. The team often had to reschedule quickly so we could find good solutions for our customers.
Do customers have to wait for the car they want or do they realize it’s sold out?
This is very different. There are those who are very patient and have great understanding. Others were annoyed that some suppliers delayed delays too soon. It sometimes happens that customers wait too long to order a subscription and then certain models run out.
Inflation is straining household budgets and the energy crisis is making consumers nervous. How do your customers react to this?
We see contract times getting shorter because it keeps people more flexible. However, we also often hear that people are very happy with the car subscription option, especially in uncertain times. In this way, you can be mobile, do not have to make a large investment and do not take financial risks. In particular, the purchase of a classic car carries a risk due to uncertain values, ie the subsequent selling price.
About half of all new registrations are currently equipped with alternative drivers. What is the demand for such cars in Carvolution?
We’re hovering just over 50 percent. There are even months when it is close to 60 percent. It currently largely depends on the delivery capabilities of all-electric vehicles.
How many more internal combustion engines will Carvolution have?
An exact date has not yet been set. But of course: In the medium and long term, internal combustion engines will disappear. However, in many households, the problem of charging infrastructure needs to be clarified first.
Carvolution now offers over 70 different vehicle models. According to what criteria is the Carvolution offer aggregated?
Our offer is about having something suitable for everyone. For new drivers, families, expats, companies as well as retirees. In other words, there are criteria such as price, space, luxury. In all cars, special attention is paid to sustainability and safety.
Which are the best sellers?
Ford Puma is an integral part of our product range. But it’s also a really good car. Ideal for families, it’s an SUV, but it’s compact so it’s also suitable for the city. Starting from CHF 499 per month, Ford Puma also has extremely attractive prices.
And which term is most in demand?
Usually 36 months, 24 months or 6 months are chosen. The difference is mainly due to different needs. Some people start at 6 months and then go longer once they are satisfied with the car. We’re seeing the start with a shorter subscription being extended, primarily electric cars.