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.

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From Sharing Power Drills to Sharing Homes, so Why Not Cars?

A couple of weekends ago, I spent Saturday at the house of a Hollywood film-maker. He is not a household name, but he is certainly known around the EV community. My family and I had dinner in his garden, enjoyed the view, sat on his couch, watch parts of a movie on his big projector screen, talked with some friends about his Tesla, parked outside... the interesting thing is that the director and I don't know each other. As a matter of fact, he was not even there; one of my best friends was simply celebrating his wedding reception at this house.

Renting houses for movie productions is nothing new in Los Angeles. The production company sends the owners to a nice hotel, the crew comes in, shoots for several days (or weeks), and after restoring the place to its original condition, wires a nice check to the homeowner. They are professionals, and they know what they are doing. Last Saturday, on the other hand, we were almost one hundred civilians, celebrating.

The day after the wedding, I happened to read the chapter in the book Nudge where the authors discuss framing, and how the way we ask questions invariably tints the answers we get. Our experience the previous night seemed a perfect excuse to do a little framing experiment, so I asked my wife:

- would you rent our beautiful house in the hills (if we had one) to over ninety perfect strangers (including a few kids), plus a catering crew, knowing that they will be celebrating: eating, drinking, dancing, possible smoking cigars, drinking some more, with access to your pool, garage, bathrooms? How much would you charge?

Her answer, predictably, was no way.

I then tried an alternative framing:

- would you mind spending just one Saturday a month away from home, knowing that that single day will pay for the monthly mortgage, leaving some extra money to spare?

After a long pause, her response was, also predictably, quite different.

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Frost & Sullivan Carsharing Study

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Here is an interesting recent study by Frost & Sullivan, forecasting the number of carsharing users in Europe and North America in the next few years.

I had a good email conversation with Aswin Kumar, F&S Senior Research Analyst for the study. Unsurprisingly, he confirmed the importance of Paris' Autolib system, coming on line next year:

We expect 1 in 3 new vehicles added from 2012 be a Battery operated electric vehicle. This is mainly due to the addition of 3000-4000 EVs that will be from the Paris' Autolib' program starting Q3-2011. We are still awaiting a confirmation on the Autolib' program whether it will be done at one-go or in a deferred manner. Even if its done in a deferred manner of 1500-Evs by 2012 then that would be around 28% of the planned new vehicle addition between 2012 and 2013 in Europe. Furthermore, there are proposals to replicate the Autolib' model in United Kingdom and Spain around the time frame of 2013-2014 albeit in the tune of 1000 EVs.