Toyota keen to expand into car subscription market

The all-new Corolla Altis hybrid variant

The world is changing, and more quickly than ever thanks to the ongoing pandemic. Of the challenges facing carmakers—autonomous driving, electrification, and shared mobility—it’s the latter one that is taking hold the fastest. Anyone who has foregone using their own car for the convenience of taking a Grab or Uber has had a taste of shared mobility.

Carmakers are of course jostling for their place in this new mobility landscape. Toyota Motor Corporation launched their mobility initiative in February 2019. Dubbed Kinto, the company is jointly funded by Toyota and Sumitomo Group. Kinto comes from the Japanese for “flying nimbus”: Kinto-un. Toyota wants you to think of it as the automotive equivalent of ‘the cloud’—an on-demand service that can adapt to users’ needs quickly and seamlessly.

For the Kinto service in Japan, there are two options: Kinto One, where the client drives one Toyota vehicle over a three-year period; and Kinto Select, where six Lexus vehicles are available over the three year period. The client pays an all-in monthly fixed fee—it already includes taxes, registration, and maintenance. Europe followed in 2020, with more type of services rolled out. These include a car-sharing type service, carpooling, and subscription type service. Toyota will be launching its own ride-hailing service soon.

In the Philippines, Toyota’s Kinto launched on 26 June 2020, with four models: Vios 1.5 G CVT, Rush 1.5 G CVT, Fortuner 4×2 G diesel, and Corolla 1.8 Hybrid. Dubbed Kinto One, the service will be available in all of the brand’s Metro Manila dealers, with expansion to other areas by next year.

Clients can choose between a three-year or four-year program. A customer gets his choice of car, use it according to the terms and conditions of the Kinto program, and then return the car at the end, with the option to then subscribe to a brand new vehicle.

Ms. Cristina Arevalo of Toyota Motor Philippines cites the main advantages of the Kinto program versus a traditional lease: no downpayment, a fixed monthly subscription fee, full vehicle service including preventive maintenance, and vehicle registration. Comprehensive insurance is also included.

How much will the service cost? “Cost will vary depending on model to be availed, but its cost cannot be compared with typical financing cost. Unlike regular vehicle financing where a customer pays mainly for vehicle purchase, Kinto One includes other benefits rolled into one package,” according to Ms. Arevalo.

Kinto One offers the following options:

Car Model:
Vios 1.5 G CVT
Rush 1.5 G AT
Fortuner 4×2 G AT (Diesel)
Corolla Altis 1.8 V HV

The monthly lease indicated in the table already includes the ff:

• Periodic Maintenance for the whole term
• Normal Wear and Tear Parts Replacement
• Annual Comprehensive Insurance Renewal
• Car Registration​

Mileage Options:
Light Package at 15,000 km/year
Standard package at 20,000 km/year
Maximum package at 30,000 km/year

Subscription Terms:
Three years
Four years

Any Filipino citizen with at least a two-year employment record and a major credit card can qualify for Kinto. Foreigners residing or working in Metro Manila will need just a local deposit account and a valid international or Philippine driver’s license.

It makes sense that the initial batch of Kinto vehicles are the practical ones. Inclusion of the Corolla hybrid means that owning such a vehicle becomes a very simple proposition, and removes some of the unknowns that may be hindering a customer from choosing a hybrid. We are of course hoping that more interesting cars can be added to the mix, including the Lexus lineup, as is available in Japan. Practical vehicles like pickups and MPVs may also be ripe for inclusion here. And then there’s the dream—having a subscription to the company’s sports cars. Calling up a GR Supra, Lexus IS sedan, or Lexus RC or LC coupe like cueing up the next episode of Star Trek may be possible one day—sometimes a fantasy can become real.

The service is just the beginning of Toyota’s vision for future mobility. Once Toyota has established its base, Kinto can evolve into more of a ride-sharing or ride-hailing application, with the company’s futuristic e-Palette autonomous vehicle being one milestone.

Indeed, the program is still quite new. “Kinto One started in Japan in early 2019 and the pilot run in Thailand and Indonesia started only in Q4 of 2019. Since it is a very new ‘usership’ program for individuals, it still too early to judge the success of the program. We expect that it will take some time before customers realize the benefits of Kinto One as an alternative to car ownership,” shares Ms. Arevalo.

The financial market’s sentiment may not be in carmakers’ favor—companies that are highly-valued tend not to own a lot of physical assets, as in the case of Uber and Airbnb. We think that carmakers have a good shot, since they know the market very well and can quickly adjust their offerings to suit. With their dominant market share in the Philippines, and philosphy of placing customer satisfaction first, Toyota—with Lexus—might just be the brand to pull it off.