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Major automakers in Japan are promoting vehicle subscription services to stimulate demand for new cars at a time when vehicle ownership is no longer coveted by consumers, especially young people.

Toyota Motor Corp. launched its Kinto auto subscription service in February 2019, followed by other leading domestic automakers.

An auto subscription service provides customers with exclusive use of a vehicle in exchange for a monthly fee. It holds the initial cost low because monthly vehicle subscriptions include taxes, auto insurance and maintenance.

Such services have attracted demand from young people as they curb costs resulting from the ownership of a vehicle to a set amount and enable subscribers to keep tabs on related expenses easily, according to industry officials.

Toyota allows customers to choose from 32 new vehicle models, or almost all of its lineup, including top-end Lexus cars, in the Kinto service requiring a three-, five- or seven-year commitment. Monthly subscriptions start at about ¥20,000 and include compulsory liability and voluntary insurance premiums.

As voluntary insurance premiums are high for young people, the subscription service greatly benefits them, a spokesperson for Toyota said.

Kinto had 16,800 subscribers as of March this year and has since been receiving applications from more than 1,000 people per month. About 40% of all subscribers are people in their 30s or younger.

In May, Honda Motor Co. began a subscription service involving new vehicles from 17 popular models, including minivehicles, with an option allowing subscribers to purchase the vehicles. Honda previously limited its subscription service to used cars.

Other major automakers, such as Nissan Motor Co. and Mitsubishi Motors Corp. , have also launched subscription services.

The COVID-19 pandemic is behind the growing trend in the automotive industry, as an increasing number of people are using vehicles for commuting due to fear of getting infected with the novel coronavirus in crowded mass transit systems such as trains and buses.

“Young people tend to shun rent-a-car and car-sharing services, fearing that joint use of vehicles with other people increases the risk of infection,” said an executive at a leading automaker.

But vehicle subscription services are still not widely used outside urban areas, because “people in the countryside still believe that automobiles should be purchased and owned,” an industry official said.

The outlook for a shift in consumer demand from vehicle ownership to vehicle usage will likely be affected by how far subscription services can find ways into rural areas.

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