Like many of its peers, Toyota, the largest automotive manufacturer in the world by volume, is repositioning itself as a mobility service provider. As part of this transition, it has entered the mobility-as-a-service (MaaS) market with Kinto. Kinto gives users access to a range of Toyota and Lexus vehicles for a monthly subscription, alongside services such as leasing, car sharing, and carpooling for businesses and private consumers.

This launch puts Toyota in direct competition with Uber, Lyft, and ZipCar. Kinto is not based on a single service or a product and is not bound to one location. With Kinto, Toyota aims to become the mobility provider of choice for all types of customers.

Changing demographics, which will see Millennials make up one-quarter of consumers by 2025 according to the United States Department of Labor, are part of the rationale for this shift. Younger consumers are more open to the concept of subscribing to a service rather than owning a car. This has led to the rise in subscription based-mobility services like ZipCar and Sharenow. Mobility service spending globally is climbing at a compound annual growth rate (CAGR) of 3.5%, compared to the 1.5% CAGR of global vehicle sales before the coronavirus pandemic according to GlobalData.

Ridesharing platforms have suffered in the pandemic

Covid-19 has impacted the ridesharing industry. Uber’s mobility bookings were down 73% in Q2 2020 and 50% in Q3 2020, with coronavirus safety concerns compounding the market’s natural shrinkage as more people worked from home during the pandemic.

Given the current operating environment, it would not seem a great time to launch a service like Kinto. But Toyota has an eye on the long-term and the demographic and societal shifts present a market opportunity that Toyota will not pass up.

With Toyota’s vast network, experience, and financial power, it can potentially dominate the mobility sector and close the gap on new entrants like Nissan’s ClickMobi and startups like ZoomCar and Revv, which have been collaborated with tech experts and carmakers to launch subscription services.

Additionally, Toyota has a competitive edge over other car manufacturers as it has the most diverse geographic spread of any of the major original equipment manufacturers (OEMs). The mindset change from owning assets to accessing services is not the preserve of established economies and markets. It may be a long road for Toyota in mobility services, initially due to the pandemic, but the company’s reach and financial firepower will put it in a strong position to meet the evolving mobility needs of consumers rather than just being a manufacturer of vehicles.

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