DAIMLER AG Car2Go International operations - Guillaume Houdremont
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Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253 Analysis of current international operations 1) Facts of April 2015 12,500 vehicles In 8 countries 29 cities worldwide 1new city every 2 months Over 1,000,000 registered customers. Coming markets 2015 Honolulu – USA Torino – Italy Chongqing – PRC First expansion into Asian continent - risky but with a lot of opportunities. “If it works we will expand to other cities, Chongqing is very Chinese so it’s the perfect example to test. Big city - a lot of potential customers” (A.Leo, 2015). End of 2016 Increase market penetration by more than 70% to 50 cities. 2) Impact of globalization Enhanced interconnectedness: People, vehicles and infrastructure are increasingly connected (Ex. real time data transmission by smartphones!) Diminishing boundaries New players entering established markets, working together more and more. Urbanization and growth of megacities Alteration of consumer behaviors People are using and sharing instead of owning. Scarcity of resources and awareness on climate change. Demographic changes More individuality stimulates niche segments, people strive for autonomy. People under more time pressure, while comfort expectations are rising. Developing countries These countries offer a huge market potential with adaptable infrastructure, integrating new growing urban mobility systems along with its evolution in motorization and urbanization. 3) Current markets On global level of the car sharing business in North America and Europe currently accounts for 90% of memberships and fleets. From 29 cities worldwide 16 cities in North America (including 4 in Canada) are served by Car2Go. The US market represents indeed the largest player with one third of total vehicle fleet (4105 units). Germany follows as second largest player with 3600 units and with its largest fleet based in Berlin (1200 electro and fuel cars). The highest amounts of electric driven vehicles are currently located in Stuttgart (500 units).
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Transcript of DAIMLER AG Car2Go International operations - Guillaume Houdremont
Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253
Analysis of current international operations
1) Facts of April 2015 12,500 vehicles
In 8 countries
29 cities worldwide
1new city every 2 months
Over 1,000,000 registered customers. Coming markets 2015
Honolulu – USA
Torino – Italy
Chongqing – PRC First expansion into Asian continent - risky but with a lot of opportunities. “If it works we will expand to other cities, Chongqing is very Chinese so it’s the perfect example to test. Big city - a lot of potential customers” (A.Leo, 2015).
End of 2016
Increase market penetration by more than 70% to 50 cities.
2) Impact of globalization
Enhanced interconnectedness: People, vehicles and infrastructure are increasingly connected (Ex. real time data transmission by smartphones!)
Diminishing boundaries New players entering established markets, working together more and more.
Urbanization and growth of megacities Alteration of consumer behaviors People are using and sharing instead of owning. Scarcity of resources and awareness on climate change.
Demographic changes More individuality stimulates niche segments, people strive for autonomy. People under more time pressure, while comfort expectations are rising.
Developing countries These countries offer a huge market potential with adaptable infrastructure, integrating new growing urban mobility systems along with its evolution in motorization and urbanization.
3) Current markets
On global level of the car sharing business in North America and Europe currently accounts for 90% of memberships and fleets. From 29 cities worldwide 16 cities in North America (including 4 in Canada) are served by Car2Go. The US market represents indeed the largest player with one third of total vehicle fleet (4105 units). Germany follows as second largest player with 3600 units and with its largest fleet based in Berlin (1200 electro and fuel cars). The highest amounts of electric driven vehicles are currently located in Stuttgart (500 units).
Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253
Model markets
I. Austin
Second public expansion after internal pilot stage and official launch in Ulm - Germany. Upon success pilot phase in joint partnership with the city of Austin, Car2Go successfully set public. Government collaboration allowed Car2Go members to use street parking in downtown area for free. In exchange for this support Car2Go offered driving minutes for its employee city trips.
II. Stuttgart The city provided high substitutes and incentives for an EV fleet (electric vehicles) Transportation solutions of the city are interlinked in a unique multi-modal concept. The fleet is currently supported by 500 charging points, with strategically chosen locations giving residents abundant flexibility.
III. Vancouver Car2Go set a considerable partnership with the Polytechnic University offering its 18 000 students a monthly subsidy and free memberships allowing them access to a network of urban smart Car2Go vehicles in order to move between lectures.
IV. Toronto Current indirect competition was represented by Zipcar and Autoshare (offering full-size vans and hourly rates). Car2Go was therefore a complementary product to the existing products. The average car2go rental is 30min at 35cents per minute, including parking fees, fuel, maintenance and insurance (thestar.com, 2012). Markets fail
I. Ulm (ROI – Cost of operation) Pilot project started in Ulm end of 2008. A testing period for Daimler employees in order to gather practical experience and analysis for technical implementations, the service concept and usage behavior of future customers. In supporting Car2Go, Ulm promoted efficient individual mobility concepts for inner city traffic and the optimum usage of available parking pace and also by setting international standards. Publicly launched by March 2009 117 000 habitants were not sufficient in number to generate a profitable return in investment. “The new criteria for entering a new market is now 500 000 habitants” (A.Leo, 2015)
II. Lyon (Legal restriction on whole France)
The French court ruled that the name car2go sounded too similar to another company “CarGo” (French Rental Company) and could cause confusion. (Autoblog.com, 2012) France however has an important market potential for car sharing, so the company will look for all legal options to regain use of its global brand in France.
III. London (Political & Infrastructural) Car2Go experiences administrative hurdles due to London’s 32 municipalities, each with its own mayor. Too many complaints from residents in regard of parking space. Finally the service was only offered in 3 districts.
Note. Even Drive Now (BMW & SIXT car sharing joint venture) with extensive PR activities and strong ties with the local policy did not try to establish in London.
Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253
IV. Birmingham (Cultural car ownership) The ratio of the Englishman to car ownership is more pronounced than elsewhere else in Europe in England. Upon customer feedback and taking the UK’s strong culture and tradition of private vehicle ownership into account Car2Go decided to quit this non-lucrative market (Bbc.com, 2014).
4) Mode of entry
I. Joint-venture Daimler’s Car2Go GmbH, headquartered in Stuttgart, is the majority shareholder in the company. It’s a limited liability company owned 75% by Car2Go and 25% by Europcar of Guyancourt, France. This joint-venture has its purpose of accelerating and extending their innovative partnership World-wide. The resources benefiting the company include access to Car2Go technology and know-how, the “Car2Go” and “Europcar” brands, Daimler’s vehicle-related services and Europcar’s car rental know-how and infrastructure. Advantages of the joint-venture:
Europcar has a vast expertise in terms of fleet management and logistics.
Expertise of Europcar which has been offering individual-mobility solutions for more than eighty years and has always anticipated changes in mobility behavior at an early stage.
Extensive network of branches to offer customers further places to register.
Cooperation by offering a wide choice of mobility options for any occasion.
Innovation of urban mobility to serve current and future needs and reach new categories of customers
II. Government joint-partnerships
In search of new mobility solutions governments support Car2Go in a joint-partnership. Advantages of government joint-partnerships
Faster business licensing and approval.
Exclusive and sufficient operation plates.
Free parking lots – Tax reduction – Monetary incentives (emission and traffic congestion reduction).
Government platforms for marketing and promotion – City employees and officials adopt car sharing during the testing / pilot stage.
Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253
III. Other cooperation Universities offer its students a monthly subsidy and membership allowance, allowing them access to a network of Car2Go vehicles in order to ensure mobility between lectures… External factors to be considered in mode of entry
Social and economic realities
Wealth distribution and demographics
Car ownership
Crime rates
Traffic flows
Status and luxury notions
Modes and cost of mobility
Infrastructure and policy
Quality of road network
Traffic congestion
Governmental support
Availability of public transportation
Credit card/ bank account penetration
Parking space availability and cost
5) International strategy
Blue ocean strategy Car2Go created an uncontested market space with its new concept, capturing new demand as well as niche segments. Considering the global economic crisis of 2008 young people were progressively shifting away from car ownership because of rising costs and improvements in urban public transport. Car2Go is the first one way free floating car-sharing system charging customers by the minute, making it stand out the other service provider through its flexible concept.
Figure 1 Blueoceanstrategy
Analysis of Car2Go current international operations Guillaume Houdremont – ID 150253
Expansion strategy Car2Go first gained experience internally within its own company structure, moving public in its domestic market before entering to foreign “alike” markets and gradually towards culturally and geographically more distant countries.
Looking for ways to reduce emissions, alleviate congestion, and create a more sustainable environment for their residents, cities must have a developed transportation program and the readiness to collaborate in joint-partnership with Car2Go With the ambitious goal to increase market share by 70% by end of 2016 Car2Go is anticipating phone technology and plans to push the community aspect hard, integrating online profiles with the car. Goal for every established city is to never walk longer than 500meter or 10min by food. References
Daimler Group Germany:
Julia Schwarz - Communications executive Car2Go - [email protected]
Andreas Leo – Communications manager Car2Go – [email protected] “If it works we will expand to other cities, Chongqing is very Chinese so it’s the perfect example to test. Big city - a lot of potential customers.” (A.Leo, 2015) Interviewed by Guillaume Houdremont on conference call, Car2Go Communication Manager, 2 March. “The new criteria for entering a new market is now 500 000 habitants”. (A.Leo, 2015) Interviewed by Guillaume Houdremont on conference call, Car2Go Communication Manager, 2 March.
Figure: Figure 1 Blueoceanstrategyaustralia.com www.blueoceanstrategyaustralia.com.au/wp-content/uploads/2011/03/Blue-Ocean-Images-for-Web-b-21.jpg
Websites: Dana, F. (2012) Car2go launches short-term car rentals in Toronto, joining Zipcar, Autoshare, even taxis in moving market, Available at: http://www.thestar.com/business/2012/06/13/car2go_launches_shortterm_car_rentals_in_toronto_joining_zipcar_autoshare_even_taxis_in_moving_market.html (Accessed: 28th February 2015). Sebastian Blanco (2012) Car2go suspends operation in Lyon, France because of name conflict with Car' Go, Available at: http://www.autoblog.com/2012/06/20/car2go-suspends-operation-in-lyon-france-because-of-name-confli/ (Accessed: 26th February 2015). BBC News (2014) Car-sharing scheme car2go to withdraw from the UK, Available at: http://www.bbc.com/news/uk-england-birmingham-27546644 (Accessed: 26th February 2015).
