A New Breed of Drivers – Case Study

Summary:

Purchasing or leasing cars has become a fad, and the younger generations have moved on. Not
only does buying a car cost an excessive amount of money, but the pollution, sustainability, and
traffic congestion has gotten out of hand. Most commonly, ages 18-30’s have resorted to Zipcar,
or car-sharing programs. This allows people to rent cars for a specific time period to do what
they please, and return the car just like a person can do with a Redbox movie. BMW has stepped
up to create “BMW On-Demand” to please their customers and continue with sales. Daimler
proceeded to create the “car2go” program that had over 15% of the licensed drivers in Ulm,
Germany join within 10 months. They plan to create versions of the cars to sustain urban living.
Consumers are joining the ban-wagon and marketers see it and are working on responding.
Define the Problem:

Car dealerships must realize that renting cars is becoming more popular than purchasing. They
must create programs to do such a thing, just as BMW and car2go in order to please their
consumers and remain in business.
Analysis:

Strengths:
The first companies to act with the car-sharing program are seeing great successes in their sales
and see the consumers are reacting in a more positive way towards this program rather than
simply purchasing a car.

Weaknesses:
The companies will not see as much revenue as they would if they were to sell an actual vehicle.
They would also need to change their cars in a way to make driving them cheaper, such as
changing the diesel to gasoline, in order to further please the customer and make them believe it
is the best deal to rent.

Opportunity:
Consumers see that renting cars is not only beneficial to themselves and their pockets, but also to
the environment. They believe they are overall saving an abundance of money by simply
borrowing the car whenever they must get to and from rather than overall purchasing. This will
increase revenue towards the idea.

Threats:
The main demographic of the car-sharing program are people ages 18-36. They are most prone to
accidents because usually people at that age are relatively new drivers. The car-sharing program
doesn’t necessarily require insurance towards that specific rented vehicle which could cause
major problems to the company as opposed to buying and not having to worry.
Alternatives:

1) The car-sharing program could require a signature before being rented stating any
damages be put towards and at fault of the person.
2) The car-sharing program could be somewhat like a taxi service so the company would not
be at risk or fault of accidents from customers. It would also be somewhat convenient for
the customers.
3) In order to keep up with consumer wants, the companies could offer the car-service at a
specific cost, and if the driver seems pleased enough, offer the actual cost to purchase the
car at a discounted rate to not only increase revenue towards the car-sharing, but also
potential final sales.
4) The company could stick with a certain choice of car models that best suit urban areas
rather than having to constantly update all different cars to customer wants.
Recommendation:

I believe the best choice for the companies leaning towards car-sharing would be seeing how the
customer is feeling and offering a discounted rate towards overall purchasing the car. This seems
like a logical idea because, it is seen that the customers are car-sharing because they either do not
want to deal with owning a car, or they cannot afford such an investment. Allowing them to test
out the program would give them a feel for the car, and offering a discount towards a final
purchase would not only be convincing towards them but they could bring in more revenue and
potentially inform other customers.