Pedal to the metal: Collaborate signs $2.2m deal with SG Fleet; targets business car subscription market
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Special Report: SG Fleet invests $2.2m in Collaborate’s car subscription business Carly.
Subscription car fleet business Collaborate (ASX:CL8) which owns car subscription business Carly has signed a $2.2m investment deal with Australian automotive giant SG Fleet (ASX:SGF).
The move will see not just the capital injection, but an agreement that SG Fleet will supply an initial set of 100 vehicles and a commitment to work together on demand generation.
The announcement comes after a string of recent deals with Hyundai, Turners Automotive Group (ASX:TRA) and Suttons Motors all signing agreements with the Carly business in the past four months.
With new car sales declining for the past 18 months and credit continuing to be squeezed, it’s not difficult to see why these big automotive players are jumping on board.
Car subscription offers a path to vehicle access for those that have been squeezed out of the market, and gives a more flexible option to vehicle access for those who may need a vehicle now, but may need a different vehicle (or none at all) in the not-too-distant future.
The agreement with SG Fleet looks to give Carly a boost in addressing the business customer market in particular, according to Collaborate CEO Chris Noone:
“Business customers are a particular focus area for us. In combination with their permanent fleets, many businesses find themselves encountering differing levels of additional demand throughout the year, and would benefit from a vehicle access model that has predictable costs and can scale up and down according to their needs. We look forward to working with SG Fleet to rapidly expand our presence in this market segment, pioneering business car subscription in Australia.” said Chris.
Carly has a clear strategy of using partners who share the vision on car subscription to rapidly scale into a market leading position:
“When faced with changing market conditions, those that succeed and thrive are always the leaders who innovate and seize the opportunities that these changes bring. Following recent agreements with Hyundai, Turners Automotive Group and Suttons Motors, SG Fleet joining us as a strategic partner is further validation of Carly’s leading role in this rapidly changing industry.” concluded Chris Noone.