By Rebecca Howard
July 1 (BusinessDesk) - Turners Automotive Group is investing A$1 million into ASX-listed Collaborate Corporation, a tech-focused car-sharing and vehicle subscription business based in Australia.
Turners will obtain a 12.13 percent stake in the company and will appoint a director the board, it said in a release to the NZX.
Collaborate Corporation’s core business centres around the car-sharing market with DriveMyCar, an Australian peer-to-peer car rental business, complemented by Carly, a vehicle subscription service which launched in March 2019.
DriveMyCar offers flexible rental periods, is up to 57 percent cheaper than traditional car rental companies, and enables owners to earn money from a vehicle they are not using, Turners said.
Carly, meanwhile, is gaining in popularity. “Not only does it offer flexibility, variety, minimal responsibility and an all-round simpler solution to vehicle ownership, the single monthly payment covers all the usual costs of vehicle ownership, from registration and insurance to maintenance and repairs,” it said.
Turners said this marks the first of a series of potential innovation investments it is considering as part of the new growth strategy launched in May. It also said it is an opportunity that allows it to learn and potentially introduce the capability into the New Zealand market.
In May, the company said it had largely finished a review of its business and will streamline its operations and brands to focus on what it does well, remove risks from the group, and accelerate growth in the most capital-efficient way possible.
“We are excited about Turners' future as we position ourselves for the long-term projected changes in the traditional retail car market. New concepts such as peer to peer car rentals and car sharing are a part of the future and provide a new revenue opportunity for car dealers and other industry players,” chief executive Todd Hunter said.
According to Turners, alternative vehicle ownership models are on the rise internationally, and vehicle subscription programmes could account for almost 10 percent of all new vehicle sales in the US and Europe by 2025.
The stock last traded up 0.4 percent at $2.35.