CASE ASSIGNMENT: Daimler/BMW: A New Breed of Driver

Boasting 500,000 members, double-digit growth rates, and the largest selection of vehicles, Zipcar has firmly established itself as the leader in car-sharing programs. And while profitability for the business has yet to emerge, the demand is certainly there. Car ownership in many of the largest cities throughout the world has recently been flat or in decline, as major urban centers become increasingly crowded, with cities like Tokyo, New York, and London expected to see declines of car owners per capita over the next 15 years. Of New York residents, only 44 percent own cars. Analysts and researchers estimate 10 million drivers in the United States alone are open to participating in car sharing programs and car-sharing program memberships will rise to around 4.5 million in the United States and 5.5 million in Europe by 2016.
The increasing business of car-sharing has already begun to encroach on the market for rental cars, and companies such as Hertz and Enterprise have developed their own car-sharing programs to supplement their rental businesses. Recently one unlikely group of organizations has taken its first steps in this segment as well—namely, automakers themselves.
Automakers are hoping to reach this emerging target market in major urban areas—young, well-educated drivers, roughly age 18 to mid-30s, with good salaries, who are actively concerned about sustainability, pollution, and traffic congestion issues. Unlike past generations, they no longer view car ownership as a status symbol; they focus more on the convenience and practicality issues related to car ownership. BMW is looking to capitalize on this market with a new program called “BMW on Demand,” which it is launching in Munich, Germany. Connecting with this demographic could also have long-term benefits for BMW, as establishing a brand