MILAN -- Fiat will support the Enjoy car-sharing service with a fleet of its top-selling four-seat 500 minicar, which will be offered to users at a lower price than the two-seat Smart ForTwos from Daimler's Car2Go program.
Fiat is providing cars to Italian oil and gas gian Eni, which will challenge the car-sharing arms of automakers such as Ford, PSA/Peugeot-Citroen, Daimler, BMW and Toyota.
All of the players want to gain a foothold in a sector that analyst Frost & Sullivan forecasts will grow to 26 million global users by 2020 from 2.3 million now. Europe is expected to have 15 million car-sharing customers by 2020, up from 1 million today, the consultancy predicts.
Competition is growing in the car-sharing sector, which is expected to have a global market value of $6.2 billion in 2020, up from nearly $1 billion in 2013, as more and more people take advantage of renting cars by the minute for short journeys within crowded cities, Navigant Research said.
Fiat-Chrysler’s Europe boss, Alfredo Altavilla, said during a press conference to announce the Enjoy program's launch that the Italian carmaker sees the new venture as “the quickest way to get customers into our cars.” Fiat will offer Enjoy users special discounts to buy a new Fiat vehicle, Altavilla added.
Slow start in Italy
Italy has the second-highest car ownership density in Europe after Luxembourg, but car-sharing programs did not really catch on until Car2Go debuted this summer in Milan.
Now it is expected that car-sharing schemes will be seen as a smart urban alternative to replacing aging vehicles because taxes on fuel and vehicle ownership have soared as Italy’s cash-strapped government scrambles for revenue. As a result, the country's new-car sales have dipped to their lowest level in decades.
No subscription fee
Customers of Enjoy will pay no subscription fee and a rate of 25 euro cents per minute for one of the Fiat 500s. That is 16 percent less than the 29 euro cents per minute for one of the ForTwos offered by Car2Go, which also charges a 19-euro sign-up fee.
Some of the perks offered by Enjoy include free parking and free entrance in to the city center (which costs non-residents 5 euros a day during working hours).
Eni CEO Paolo Scaroni said the press conference in Milan on Monday that he expects Enjoy to break even in 2016.
BMW’s DriveNow scheme, run in partnership with rental company Sixt, has expanded to five European cities and 1,600 cars after starting two years ago.
The automaker expects the business will turn its first profit this year. Daimler says Car2Go is profitable in the three major cities used to launch the program in 2009 -- Hamburg, Germany; Vienna, Austria; and Vancouver, Canada -- adding that it takes three to four years for a city scheme to make money.
Enjoy’s initial fleet of 300 gasoline- and diesel-powered Fiat 500s in Italy’s business capital will rise to 650 in January, with a rollout planned later for Rome, Turin and possibly other European cities.
Enjoy and Car2Go bring Milan’s car-sharing fleet to about 1,100 vehicles, and that number could rise to 2,000 next year, said the city's traffic superintendent, Pierfrancesco Maran. The city is accepting license applications until Dec. 31.