BERLIN (Bloomberg) -- Daimler AG, maker of the Smart city car, is stealing customers from Mazda Motor Corp. and Fiat S.p.A. with rentals aimed at drivers ready to forgo auto ownership.
“I thought I would miss my car,” said Sam Eder, a 33- year-old marketing manager in Austin, Texas, who sold his Mazda Miata in June after signing up with Daimler. “But I just hit the six-month mark without it and don't miss it at all.”
Daimler's Car2go service, which rents Smart cars by the minute in Austin and the German town of Ulm, will add Hamburg early in 2011 and is in talks with “dozens” more cities in Europe and North America, said Robert Henrich, the unit's chief.
Daimler is competing with Hertz Global Holdings Inc. and Zipcar Inc. for a share of an industry likely to surge 12-fold to $7 billion in revenue in Europe and North America by 2016, according to a Frost & Sullivan study.
The growth reflects a shift in people in their 20s and 30s, who see car ownership as a financial drag with little status upside. That view challenges the traditional auto business of making and selling vehicles to people like Niran Babalola.
The 25-year-old director of technology at an Austin non- profit organization, who prefers to ride his bike, uses Car2go when he's running late or can't get sweaty. He says he's forgoing a car to make a social statement.
“I like living in walkable places and so by supporting that in my choices, I hope they'll make more walkable places,” said Babalola. “It's a bit of wishful thinking.”
BMW, PSA join trend
Car sharing is attractive to younger drivers in part because they grew up with monthly cell-phone bills and are accustomed to pay-as-you-go services. The lack of parking also complicates car ownership in crowded city centers, the main target of Car2go and other such offerings.
The trend is pushing automakers including BMW AG and PSA/Peugeot-Citroen to develop services to woo these consumers.
“We're seeing a growing trend toward collaborative consumption,” said Aswin Kumar, an analyst with consulting firm Frost & Sullivan. “That metamorphosis is inevitable; the auto companies have to change from being a manufacturer to a service provider.”
Car2go, which only offers the two-seat Smart, differs from competitors by allowing consumers to rent by the minute rather than the hour. It doesn't charge for distances as long as the trip is less than 150 miles (240 km).