Turners Automotive Group is hoping to launch a vehicle subscription service in March under which people pay a flat monthly fee for the right to use a particular vehicle.

Turners is licensing the concept from ASX-listed Collaborate, a company it bought a 12 per cent stake in for $1 million in July last year and which launched the Carly subscription service in Australia in March last year.

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The concept was pioneered in the United States in 2017.


To begin with, Turners will be supplying 200 company-owned used vehicles to test the concept but the aim is to access third-party-owned vehicles, both new and used, from other dealers, fleet owners and manufacturers.

"We really like the fact that Carly take a sort of industry approach. They're looking to basically present all the unsold cars in the market to consumers in quite a different way," Turners chief executive Todd Hunter told BusinessDesk.

As for the limited launch, "it's like anything when you start off. You want to be sensible about the way you commit to it," Hunter said.

"We can test whether there's an appetite for the approach and, if there is, we will scale it."

Details such as pricing have yet to be finalised but will probably be similar to the pricing in Australia, Hunter said.

Carly offers three plans in Australia ranging in price from A$115 ($120) to A$147 a week for a minimum term of 30 days. Customers can drop the service by giving 30 days notice in writing and they can choose to change vehicles every month.

The subscription cost includes overheads such as insurance, registration and servicing.

They can also vary the type of vehicle, depending on changing needs. For example, a person might want a small economy model most of the time but could switch to a van for a few days when moving house.


The rationale for the service is that while boomers wanted to own cars, later generations want greater flexibility and the ability to make smaller financial commitments for short-term agreements.

Hunter says the subscription model offers dealers and manufacturers an alternative to leaving unsold new or used cars sitting around.

While new cars typically depreciate hugely as soon as they're driven off a dealer's yard, the market for near new cars is often much greater than for new cars. "This model gives them an option of getting cash flow while getting the car to a price point where it makes sense to sell," he said.

Since Turners invested in Collaborate, a company with a current market capitalisation of A$17.3m, both companies have spent the intervening months getting to know each other and working on how Carly will work in New Zealand, which will be Collaborate's first licensing agreement for the Carly concept.

"We're excited about the opportunity. In the end, success will be determined by whether customers want a more flexible way of accessing a car than owning it outright," Hunter said.

Collaborate chief executive Chris Noone said in a statement that Turners is the largest seller of cars in New Zealand, putting it in an ideal position to trial the concept here.

"Turners has an unequalled marketing capability and network of industry partnerships that will provide Carly with an excellent opportunity to grow rapidly in New Zealand."

Collaborate estimates that vehicle subscription programmes could account for nearly 10 per cent of all new vehicle sales in the US and Europe by 2025.

Collaborate shares are trading at 1.5 Australian cents and have gained 25 per cent in the last 12 months while Turners shares are trading at $2.85 and have gained 18.8 per cent in the last year.