Carly Holdings (ASX:CL8) launches direct-to-dealership subscription service – CarlyNow

Julia Seymour:

Carly Holdings is offering a new way for car dealers to subscribe any of their vehicles to drivers without the need to establish their own subscription business. It’s expanded its service suite with CarlyNow, a direct-to-dealership car subscription service.

Carly’s CEO, Chris Noone joins me now. Welcome, Chris.

Chris Noone:

Thanks very much.

Julia Seymour:

Now Chris, firstly, how does Carly currently work with car dealers?

Chris Noone:

So we work with a number of automotive dealers throughout Australia. The way we work with them currently is that the automotive dealer will provide a list of cars to us. We will display them on our website. We will do the marketing. We will find the subscribers for the vehicles, collect the payments, do the verification checks, apply the insurance to the vehicle, and then we’ll let the dealer know that the customer is coming to collect that vehicle.

Now, typically, that customer will have the vehicle on average for around five and a half months. The dealer is responsible for preparing the car and handing it over to the customer, and then we manage the car while it’s on the road with the customer. We do the fleet management. We look after any insurance issues. We organise servicing as well. So that’s the current way that we operate with dealers. They have to dedicate a fleet of vehicles to our service, and we essentially do the marketing for those. That’s a little bit different to what we’re announcing with our new product.

Julia Seymour:

So Chris, tell us about your new product, CarlyNow.

Chris Noone:

So we announced CarlyNow a couple of weeks ago at the Australian Automotive Dealer Association Conference in Sydney, which was attended by over 800 automotive dealers. We announced this product because we wanted a simpler way for car dealers to meet their customers’ needs. So CarlyNow is an online app and it enables dealers to do their own subscriptions on their own vehicles. Essentially, it allows them to create a subscription on the fly by leveraging our technology, our platform, our services, our payment infrastructure, our ID verification services, and also our fleet management services as well. So the typical situation is that a customer could be talking to the dealer right now, they could be saying, oh, I’m not sure if I want to buy a car. Or they might have actually placed an order for a car, but it will take six months to be delivered.

With CarlyNow, the dealer can actually use CarlyNow to actually subscribe any other vehicle to that customer. So let’s say the customer’s ordered the blue car that will be available in six months. They can say, great, that vehicle’s ordered. We’ll see you in six months of that vehicle. In the meantime, we’ll give you exactly the same car, but it’s in red. We know it’s not your ideal colour, but we’ll give you that car. We’ll subscribe it to you through CarlyNow. And the customer is happy because they’ve got a vehicle. The dealer is happy because they’ve met the needs of that customer and they’re also generating revenue from one of their vehicles as well. There are other opportunities where customers might be thinking, oh, I’m not quite ready to buy, maybe I will, maybe I won’t. So the dealer could say, well, why don’t we subscribe a certain vehicle to you for a few months? The other opportunity is electric vehicles where people are not really sure if an electric vehicle will suit their needs. Once again, they can enter the customer’s details into CarlyNow into the vehicle details, and we can create the subscription and all the protections and services that come with the whole CarlyNow product. So it allows the dealer to take advantage of an immediate opportunity, capture a customer, monetise them, and keep them happy.

Julia Seymour:

And how will this benefit Carly shareholders?

Chris Noone:

This gives us another string to our bow, and it also allows us to clip the ticket of our car dealers who are entering the subscription market. So we operate a direct model where we have our own fleet of cars that we subscribe to customers. We also provide services to other companies that have their own fleets, such as automotive dealers, automotive manufacturers, and also fleet management companies. So we have direct income, but we also have this other income where we’re supporting others to enter the subscription business. So essentially the benefit for our shareholders is that it’s a substantially increased revenue potential with very little cost for our business.

Julia Seymour:

And are you confident this will be a success?

Chris Noone:

Certainly am. We’ve had great feedback at the conference a few weeks ago. We’ve been testing it in the market for quite a while now, and it already leverages many of the services that we’ve already proven in the market. So with vehicle delivery delays still continuing, some people concerned about the economy and whether they should take out a loan or finance, or whether they want a more flexible option like subscription, we think there are many reasons that dealers will really jump on this product.

Julia Seymour:

Chris Noone, Carly Holdings CEO. Thank you for joining me today.

Chris Noone:

Thanks very much. Great to be here.