In an attempt to attract younger customers, BMW will be expanding its car-sharing rental program to about 25 new cities in the United States and Europe.
DriveNow, the automaker’s car-sharing unit which is operated in collaboration with German rental car company Sixt, will be made available in more cities. According to Peter Schwarzenbauer, a BMW board member responsible for the program, the company will be bringing the rental business to 10 more locations in the United States and 10 to 15 new locations in Europe. DriveNow is currently available in San Francisco, Berlin, Cologne, Hamburg, Munich and Dusseldorf.
In an interview at the Geneva Motor Show, Schwarzenbauer said, “It offers very good opportunities for us to attract new customers.”
DriveNow as a “car-sharing concept” for the young generation was created in 2011. It was initially offered in German cities before it debuted in San Francisco in 2013. The program rents out BMW 1-series compacts and Minis, as well as their electric versions, by the minute. As a result, the use of such vehicles became more budget-friendly for its target market. Customers can enjoy a ride for short or long trips and park them on drop-off points when they are done.
At present, DriveNow has 240,000 users. BMW is about to add the new electric i3 car to its rental fleet.
BMW’s DriveNow is not the only car-sharing service available. Daimler’s Car2Go also makes renting vehicles affordable. The Car2Go service rents out Smart-brand two-seat vehicles by the minute in 24 cities, and plans to add Rome to its list of serviced cities in the middle of March with 300 cars in its lineup.
Car-sharing may be a threat to U.S. auto sales, as a recent study by AlixPartners suggests. AlixPartners, a consulting and business advisory company with an automotive practice, found that the popularity of car-sharing affects the demand of cars, both new and preowned. Data revealed that if car-sharing services were not available, Americans would have purchased 500,000 cars and that one car-sharing fleet vehicle also hindered the sale of 32 vehicles.
According to the study, 48 percent of individuals who often utilized car-sharing services ended up not selling or buying a car. Interestingly, the goal of BMW in expanding DriveNow to more locations is to introduce the brand to young customers, hoping that the vehicles they rent will leave an impression that could influence their decision when they have families and need to buy a vehicle of their own.
Car-sharing may have contributed to the decline of car ownership rates in the country, but it is not the main cause. In recent years, telecommuting and improved public transportation networks have also influenced Americans to forgo having automobiles of their own. Another key factor is the young people themselves: unlike older generations, they are not as interested to own cars. They would rather spend their hard-earned money on gadgets.
In the case of BMW, the automaker is aware of the needs of young people and takes these in consideration. Rather than thinking of a car-sharing service as a threat to their bottomline, the brand makes use of it to influence future consumer behavior in their favor.