Turners invests in car subscription business
Turners Automotive Group Limited is investing AUD$1 million into ASX-listed Collaborate Corporation, a tech-focused car-sharing and vehicle subscription business based in Australia.
Turners will acquire a 12.13 per cent stake in Collaborate Corporation and will appoint a director to the Collaborate board.
Collaborate’s core business centres around the rapidly evolving car sharing market with DriveMyCar, Australia’s leading peer-to-peer car rental business, complemented by Carly, Australia’s first truly flexible car subscription offering, which launched in March 2019.
This is the first of a series of potential investments by Turners under the pillar of innovation and ventures, a part of its broader strategy launched at the end of May 2019.
The investment in Collaborate strongly fulfils Turners’ investment criteria, given its adjacency to Turner's existing business model, the potential synergies that exist between both companies and the exciting opportunity for Turners to participate in the rapid growth of the 'sharing economy' as it relates to transportation and changing consumer preferences.
“Strategically the investment in Collaborate makes sense for both companies," says Turners chairman, Grant Baker. "We have been impressed with Collaborate’s board and management team, the progress they have made and the traction they are getting with customers in a short space of time. We are very excited about the partnership between the two organisations.”
Alternative vehicle ownership models are on the rise internationally, and vehicle subscription programmes could account for nearly 10 per cent of all new vehicle sales in the US and Europe by 2025.
In developed markets like the UK and the US, subscription-based ownership models have already crossed 10 per cent of monthly household incomes, driven in large part by the benefits experienced by consumers such as greater flexibility and a reduction in costs incurred including the purchase of vehicles, parking, insurance, fuel and maintenance.
“We are excited about Turner’s future as we position ourselves for the long term projected changes in the traditional retail car market," adds Turners CEO Todd Hunter. "New concepts such as peer to peer car rentals and car sharing are a part of the future and provide a new revenue opportunity for car dealers and other industry players.”
