Bayerische Motoren World Domination
[Video via The Auto Channel]Ivan, one of my coworkers here in London, has a funny way to describe his admiration for his former employer BMW; he just paces back and forth muting they cover and master every single angle of the business, e.v.e.r.y single one, all while shaking his head in disbelief. Proving Ivan right, BMW announced last week that they were starting a premium car-sharing program in Germany. The news comes right on the heels of their February announcement of the i sub-brand, a division that wants to be to environmental vehicles what the M brand represents to performance, as well as the launch of i-ventures, their venture capital arm. Why would a conventional car company move into such a fundamental threat to their core business as car-sharing? While the launch of the i sub-brand is understandable from a product point of view, creating a venture firm and a car-sharing organization might seem, at first glance, odd. I see three possible explanations: 1- The Conspiracy theory: eyeing car-sharing as an attack to the fundamentals of their business model, BMW has decided to start its own car-sharing company and get in the game, only to follow with a string of acquisitions (Zipcar?) that will ultimatly allow them to dominate the business. Full domination achieved, they will declare the division a money loosing operation and close it down. Very unlikely, but we have seen this movie before.
2- The Last-Man Standing theory: with oil getting back to record levels, an urban environment getting more and more hostile towards cars, and young people just not interested in car ownership (even in Germany), car companies will need to diversify from gasoline powered steel cans in order to survive. Some companies like Renault-Nissan are betting on EVs, while BMW seems to be betting on efficiency (pure electric or not) and services. With their impeccable reputation and global reach, they have, if anything, a better chance than anyone to stay relevant in the new mobility landscape. 3- The Who-The-Hell-is-Going-to-Otherwise-Afford-our-Products theory: hellbent in producing technological marvels, they have realized that their EVs are simply going to be extraordinarily expensive; if a conversion like the Mini-E was $850 a month, God knows how much they are going to charge for the carbon-fiber i family. Better then to let the unwashed masses rent them by the minute, so they can at least get a taste… One can accuse German companies of prepotence and over-engineering, but not of short-sightedness. Unlike American car companies, obsessed over quarterly reports, German car companies (mostly family controlled) tend to follow a carefully charted long term strategy. In that light, the fact that one of the most admired brands in the planet, actively getting a pulse of the Mobility-as-a-Service world through i-Ventures, would own a car-sharing platform to deploy some of the most advanced high-efficiency vehicles in the planet at a price-per-minute that everyone can afford, sounds like a formidable formula not only to stay relevant, but to invent the future in the process. World Domination indeed. (Now if they could only stop saying Premium every twenty seconds… their introductions are starting to sound like The Big Lebowski, without the laughs).