BMW AG has announced plans to launch a project to let drivers in Germany rent its luxury sedans and roadsters by the hour, the latest effort from an auto maker to build a business by enabling consumers to get around without buying a car.
Short-term car-rental programs aren't new, but few have emanated from car makers, whose traditional growth approach has been to prod people to buy more cars, not fewer.
But among consumers in the world's biggest and ever-expanding cities, particularly younger drivers, car ownership is flat or declining, according to urban planners and researchers, The Wall Street Journal reported. To reach them, a handful of European auto makers, such as Daimler AG, maker of Mercedes-Benz cars, and PSA Peugeot Citroen, have been exploring alternatives that revolve around selling them transportation some other way.
As populations grow—and along with them congestion and pollution concerns—the number of car owners is likely to decline per capita over the next 15 years in Tokyo, New York, London and other cities in developed countries, said Sarwant Singh, a partner at market-research firm Frost & Sullivan.
With short-term car-leasing and car-sharing programs, auto makers are aiming not only to tap into customers who don't own cars, but to draw them to the brand in the event they do eventually want to buy or upgrade to a new car, he said.
BMW's 12-month pilot program, called "BMW on Demand," will allow drivers near its Munich headquarters to rent various models from its product lineup, from its compact 1 series (€16, or $22.29, an hour) to its flagship 7 series sedan (€32 an hour). Customers will be able to pick up and drop off the cars at BMW Welt (or "BMW World"), the auto maker's exhibition, event and car delivery center next to its headquarters, and can reserve them online, by phone or at a counter there.
A BMW spokesman said the company anticipated many potential customers would choose models they perhaps couldn't purchase outright—such as its M6 sports coupe, which has a U.S. starting price of $102,350—and rent them for special occasions. If the program is successful, the car maker plans to open more leasing sites in Munich and eventually in other European cities.
BMW's project is similar to Peugeot's Mu initiative, which the French car maker has been expanding across European capitals this year. It allows drivers to use a pre-paid account to lease vehicles—from a van to a scooter to a bicycle—on a short-term basis.
Daimler, on the other hand, has been testing a Web-based ride-sharing initiative called Car2go, much like Zipcar's car-sharing business in the U.S. and U.K. Software links drivers with Daimler's Smart-brand cars, allowing them to pinpoint and pick up an available car ad-hoc, then drop it off when and where they prefer.
In Ulm, Germany, the initial test site for Car2go, some 15% of the city's registered drivers are signed up with the program. The car maker has since expanded the program to Austin, Texas, and last week announced plans to eventually begin it in Hamburg and other locations.
Daimler last month also launched a carpooling variation of the program, called Car2gether, that uses social media to link riders with compatible drivers. At first passengers will be required to pay a small cash fee to help with the gas and maintenance. As the program progresses, Daimler plans to install an automated payment system, from which it will take a small cut of the fees.
Mr. Singh of Frost & Sullivan said he projects membership in such car-sharing businesses to climb roughly tenfold by 2016 to 4.5 million members in North America and 5.5 million people in Europe.