Daimler flooding Berlin with Smart cars, wants to take on Bmw’s DriveNow

Article by Christian Andrei, on May 14, 2012

Daimler’s strategy to get a bigger share of Europe's emerging rent-by-the-minute urban auto market includes the installation of the largest fleet of its Car2go short-term rental service in Berlin last month. This means that Daimler’s Mercedes-Benz models now outnumber BMW's DriveNow products two-to-one.

Car2go's chief Robert Henrich said that what’s happening in Berlin is part of a bigger campaign to get the attention of urban consumers and increase sales from services as the appeal of being a car owner in the cities diminishes.

He believes that as the leader in this business, it’s to be expected that competition will show up. He said that this proves that it has the “correct” business idea. Because of the expanding customer base for rental cars, Daimler and BMW are improving their city-based services that enable drivers to rent by the minute.

Consulting group Frost & Sullivan said that the car-sharing membership in Europe is expected to increase to around 15 million people by 2020 from 700,000 at the end of 2011. Sales in this region for 2011 reached 13.6 million cars. Daimler’s Car2go service costs the same as DriveNow in Berlin at 29 cents a minute. Daimler considers this move as a means to get back the top position in the luxury-car segment from BMW by the end of the decade.

Daimler thinks that to reach its goal, it would have to expand the appeal, particularly with younger drivers. Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, said that car-sharing is similar to a paid test drive. He said that this opens the door wide for customers who have not considered buying a car. He said that this also helps its image. Middle-class consumers are those who are likely to be attracted to car sharing. [source: Bloomberg]

Topics: daimler, bmw, smart, germany

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