2 Comments

Summary:

The relationship between car sharing companies and automotive manufacturers bears scrutiny, says GigaOM Pro analyst Adam Lesser in his weekly column.

greenitlogo

The relationship between car sharing companies and automotive manufacturers bears scrutiny, says GigaOM Pro analyst Adam Lesser in his weekly column (subscription required). Studies are emerging and show, not shockingly, that car sharing programs reduce vehicle ownership. Which raises the basic question: does car sharing present a long-term problem to the automotive industry by showing consumers that renting a car on demand, whenever they need it, is a better experience than car ownership?

The current answer is no, which may be part of the reason the industry isn’t fighting car sharing the way the hotel lobby is fighting vacation sharing company Airbnb. If anything, the automotive industry is moving quickly to compete in the car sharing market, viewing the space as a strategic investment. Daimler has rolled out its own car sharing company, Car2Go, in Austin and Vancouver; BMW announced DriveNow in March; and Volkswagen trials Quicar in Hanover, Germany, this fall. To read the rest of Adam’s thoughts, check out his column.

Other things Adam is reading and writing about this week:

  • Suntech sees China gaining from falling solar prices: The CEO of giant solar producer Suntech Holdings sees 24 months of oversupply in the market before supply and demand stabilize. He forecasts that China will surpass Germany by 2015 as the largest market for solar.
  • REC considers permanently closing some Norway production: Amid slumping prices for wafers and cells, Norway’s REC is exploring shutting its Norway production. The company has silicon materials plants in Washington state and Montana.
  • The cash-back car: NRG wants to buy electricity from EV owners: NRG Energy has bought a license to an aggregator technology that interfaces between individuals and energy wholesalers. The idea behind vehicle-to-grid technology is that drawing power from EVs will stabilize the grid and reduce costs for the utilities. The barriers are that EVs need bidirectional power supplies and automakers would have to agree not to void the battery warranty, should drivers connect their batteries to the grid.
  1. Hi

    Agreed on some of the points here but not others.

    Car/automotive industry – AGREED that they are diversifying into areas which would support current levels of car ownership in a cost effective & future proof manner (hybrid, EV’s etc.) and also moving into new areas such as electric bikes and bicycles.

    Certainly, BMW have launched an electric assisted bicycle called the Pedelec. Also, they are using bicycles in the London Olympics which is just as well from both a reducing CO2 emissions standpoint and the fact that London will be gridlocked during the Olympics (that is for sure).

    Renting a car on demand – DISAGREE with your view that consumers are not viewing renting on demand as a viable alternative to car ownership. Sure, there are differences in developed countries due to cultural, costs and historic transport factors.

    In the UK, consumers are seeing the value in not owning a car and renting on demand. Car clubs (renting on demand) are growing rapidly in cities like London where people have had enough of spiralling petrol (gas) prices, the costs of motoring and the pedestrian speed of car travel (London averages 12MPH!).

    Together with a comprehensive transport system and a cycling revolution, people are tuning off to car ownership. Londoners use their car on average 3.5 hours a week and by ditching their ‘motor’ for renting on demand can save £3,500 ($5,500) per year. Check out our article for more information on what’s going on across the pond http://www.greenabode.co.uk/london-car-clubs/

    Share
  2. Thanks, Greenabode.

    Just to clarify, my column doesn’t say that consumers are not viewing car sharing as a viable alternative to car ownership. My column reflects the view from automakers that in more urban areas, car sharing will result in families moving from owning 2-3 cars to only owning one. This is exactly what Nick Cole, CEO of Daimler’s Car2Go told me, and it’s a view that I share. I suspect some folks, particularly single urban dwellers, will decide to give up car ownership all together.

    The more interesting issue, for me, is that if there is a gradual reduction in cars sold due to car sharing, will the automakers with the best position in terms of car sharing start to dominate the market and the ones that are late to the car sharing party, suffer because they can’t make volume sales to the likes of Zipcar. What I see largely going on in terms of automakers like BMW getting interested in car sharing, is that they have to take a position in the car sharing market or risk getting locked out from a lot of future customers.

    Share

Comments have been disabled for this post