A new car subscription company in Japan launched by Toyota Financial Services and Sumitomo Mitsui Auto Service Company is offering to reduce fees for customers who drive safely and efficiently.

The two companies are jointly funding Kinto, which aims to support a growing interest in vehicle subscriptions as an alternative to ownership.

Initially, two products will be offered on a trial basis in Japan.

‘Kinto One’ gives customers no-deposit access to one Toyota-brand vehicle over a three-year period, while ‘Kinto Select’ allows customers to drive six models of Lexus-brand vehicles over a three-year period.

Both services are offered as a monthly fixed-sum service that includes insurance, vehicle tax, registration charges, and scheduled maintenance.

Customers can apply online or through Toyota and Lexus dealers.

Kinto Select will be offered from February 6 and Kinto One will launch on March 1. Both will be trialled with Toyota and Lexus dealers in Tokyo, with a nationwide launch planned for the summer.

Kinto One costs between 46,100 yen ($419) and 99,000 yen ($901) per month before taxes, while Kinto Select costs 180,000 yen, or $1,638 a month.

Later this year, a points service is planned that will award points to customers based on their vehicle usage, such as for safe or ecological driving. These points can be applied towards monthly payments to reduce vehicle costs.

Details of the scheme haven’t been released, but any rewards service based on driving performance would need cars to be fitted with a telematics device to monitor how each vehicle is used.

The concept of ‘nudge economics’ to incentivise good behaviour was discussed at the annual White Clarke Group Auto Captives Summit last year.

Irfon Watkins, CEO and founder of blockchain-powered mobility currency DOVU, told the audience that blockchain-powered mobility tokens that reward the right behaviour could be a key tool in building loyalty amongst auto finance customers.

He suggested that crypto-tokens could be rewarded for everything from minimising damage on a lease vehicle to opting for greener transport.

By using a blockchain ledger to manage how and when the tokens are earned and spent, he said transactions can be instant, compared to traditional loyalty schemes where it can be weeks before points are made available.

This means that drivers could spend points the second they earn them at approved retailers, which could be a powerful influence on driver behaviour.

Watkins said: “If you tokenise behaviour, then you’ve got nudge economics. Nudge economics is reward-based economics. It isn’t penalising your customer for bad behaviour, it’s rewarding them for good behaviour.”

DOVU was recently announced as a shortlisted company in the European Startup Prize for Mobility.

The prize is organised by a public-private initiative co-founded by the European Parliament’s transport and tourism committee chairwoman Karima Delli, together with Boston Consulting Group and Via ID.

The launch of Kinto adds a new dimension to the growing vehicle subscription market.

Manufacturers and service providers have been introducing subscription services globally, with mixed results.

BMW and Daimler have attracted millions of customers to their mobility services, which announced a merger last year.

Daimler Financial Services recently reported that its mobility services arm had reached 26 million users for the first time, following 64% growth in demand.

There were more than 126 million transactions with its services including car2go, moovel and the ride-hailing group including mytaxi, Beat, Clever Taxi and Chauffeur Privé across 130 cities.

In response to its changing focus, Klaus Entenmann, CEO Daimler Financial Services, said it would become Daimler Mobility.

He said: “This new name gives expression to our strategic expansion of the business segments. 26 million customers along with strong double-digit growth in this future market of mobility are driving our investments."

Other brands have been reporting success, including Volvo with its Care by Volvo subscription service, while PSA Finance recently announced car subscription partnerships with Drover and Wagonex.

Leasing companies and specialist providers are also reporting success.

LeasePlan has said there is strong growth in its Subscribe & Drive service, while fintech start-up Fair has raised $385 million in its latest funding round, led by SoftBank, to enable global expansion of its vehicle subscription business.

SoftBank has investments in several disruptive businesses in the automotive sector, including global ride-hailing giant Uber, China’s Didi Chuxing and south-east Asia’s biggest ride-hailing firm Grab.

As part of the investment, funds will be used to expand a partnership Fair already has with Uber.

Despite market growth, there are some notable casualties in the mobility market.

Ford recently ceased operation of its Chariot shared subscription minibus service. The e-shuttle start-up was acquired by Ford in 2016 for $65m. It was the first acquisition made by Ford’s newly launched Ford Smart Mobility unit, which was targeted with investing in “innovative mobility start-ups and technologies”.

The manufacturer continues to invest in mobility services, including paying around £100 million last year to buy dockless electric scooter company Spin.

Cadillac has also announced it will “temporarily pause” its Book by Cadillac car subscription service in the US as part of a strategic review.

Industry reports suggest the key challenge related to the complexities and cost of fleet management and technological issues.

Overview of Kinto subscriptions

Applicable models Subscribers can choose from the five models below. Lineup expansion planned from autumn 2019. Prius, Corolla Sport, Alphard, Vellfire, Crown
Contract period 36 months
Deposit Not required
Payment methods Monthly fixed-sum (bonus payments also possible)
Monthly rates Prius - 46,100 to 55,400 yen, excluding tax (49,788 yen to 59,832 yen including tax)
Corolla Sport - 49,500 to 58,700 yen, excluding tax (53,460 yen to 63,396 yen including tax)
Alphard - 79,000 to 92,000 yen, excluding tax (85,320 yen to 99,360 yen including tax)
Vellfire - 75,000 to 88,000 yen, excluding tax (81,000 yen to 95,040 yen including tax)
Crown - 90,000 to 99,000 yen, excluding tax (97,200 yen to 106,920 yen including tax)
Includes vehicle charge, registration fees, tax, maintenance, voluntary insurance, vehicle tax
Supplementary services A point service is planned for introduction from fall this year. The service is planned to award points to customers based on their vehicle usage (such as for safe or ecological driving). Points can be applied toward payments.
Applicable models Users can select Lexus models from the following six choices, with changes possible every six months. ES300h, IS300h, RC300h, UX250h, RX450h, NX300h
Contract period 36 months
Deposit Not required
Payment methods Monthly fixed-sum
Monthly rate 180,000 yen, excluding tax (194,400 yen including tax)
Monthly rate includes Vehicle charge, registration fees, tax, voluntary insurance, automotive tax

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