Selling mobility instead of cars: new business strategies of automakers and the impact on private vehicle holding

Abstract

This article considers the business strategy of an automaker entering the car-sharing market. Given the high growth of the car-sharing industry, this could become a new business segment and simultaneously have effects on branding. The considered case is a car-sharing system called car2go, which was launched by Daimler in 2009. An empirical analysis based on primary data (N = 1881) indicates that private vehicles are reduced as a consumer reaction. This constitutes a potential for environmental gains, as shared and consecutively used cars require less of production resources compared to a higher number of private cars being bought, driven and parked individually. Implications for public policy are that the allocation of public space to car-sharing systems could result in a net gain of space in cities. Policy makers should also consider the dependency of car-sharing schemes on municipal support regarding parking spaces and they should anticipate the upcoming electrification. This is the first study on a large-scale car-sharing system operated by an automaker using retrospective primary data. It contributes to the assessment of the current trend of car manufacturers launching car-sharing schemes.

Fun to drive? The dynamics of car manufacturers' differentiation strategies

“…Mobility services challenge car manufacturers and continue to divide opinions among them. Some manufacturers aimed at becoming mobility service providers a few years ago (Firnkorn & Müller, 2012; Jungwirth, 2018). Today efforts in the mobility service domain are rather limited (Hörcher & Graham, 2020; Miao, Jia, Li, & Qiu, 2019).…”

Fun to drive? The dynamics of car manufacturers' differentiation strategies

“…Mobility services challenge car manufacturers and continue to divide opinions among them. Some manufacturers aimed at becoming mobility service providers a few years ago (Firnkorn & Müller, 2012; Jungwirth, 2018). Today efforts in the mobility service domain are rather limited (Hörcher & Graham, 2020; Miao, Jia, Li, & Qiu, 2019).…”

Designing the Business Models for Circular Economy—Towards the Conceptual Framework

“…Others argue that CE will give the companies new profit possibilities, increase competitive advantage and build resilience against several strategic challenges [4,56,57]. Detailed advantages could concern: innovation and competitive advantage, additional revenue streams, long-term contracts, customer loyalty and feedback, multiple benefits of internal resource management, and beneficial partnerships throughout the value chain [7,58,59,60]. Customer and user benefits mainly comprise of increased choice at lower cost; however, there are also some social benefits, like a contribution against climate change [4,52].…”

Circular Business Model Innovation: Inherent Uncertainties

“…Previous literature has identified several drivers of implementing a CBM, especially of the PS type. These include cost savings in manufacturing (Walsh, 2010;Stahel, 2010), differentiation potential to meet low cost competition (Besch, 2005;Heese et al, 2005), enhanced customer relations (Walsh, 2010), improved customer behaviour understanding (Firnkorn and Müller, 2012), improved margins (Pearce, 2009), reduced environmental impact (Mont, 2004) and increased brand protection (Seitz, 2007). Michaud and Llerena (2011) showed by experimental auctions that willingness to pay is not necessarily measurably lower for remanufactured products as long as environmental information is provided.…”

Fun to drive? The dynamics of car manufacturers' differentiation strategies

“…Mobility services challenge car manufacturers and continue to divide opinions among them. Some manufacturers aimed at becoming mobility service providers a few years ago (Firnkorn & Müller, 2012; Jungwirth, 2018). Today efforts in the mobility service domain are rather limited (Hörcher & Graham, 2020; Miao, Jia, Li, & Qiu, 2019).…”

Designing the Business Models for Circular Economy—Towards the Conceptual Framework

“…Others argue that CE will give the companies new profit possibilities, increase competitive advantage and build resilience against several strategic challenges [4,56,57]. Detailed advantages could concern: innovation and competitive advantage, additional revenue streams, long-term contracts, customer loyalty and feedback, multiple benefits of internal resource management, and beneficial partnerships throughout the value chain [7,58,59,60]. Customer and user benefits mainly comprise of increased choice at lower cost; however, there are also some social benefits, like a contribution against climate change [4,52].…”

Circular Business Model Innovation: Inherent Uncertainties

“…Previous literature has identified several drivers of implementing a CBM, especially of the PS type. These include cost savings in manufacturing (Walsh, 2010;Stahel, 2010), differentiation potential to meet low cost competition (Besch, 2005;Heese et al, 2005), enhanced customer relations (Walsh, 2010), improved customer behaviour understanding (Firnkorn and Müller, 2012), improved margins (Pearce, 2009), reduced environmental impact (Mont, 2004) and increased brand protection (Seitz, 2007). Michaud and Llerena (2011) showed by experimental auctions that willingness to pay is not necessarily measurably lower for remanufactured products as long as environmental information is provided.…”

Fun to drive? The dynamics of car manufacturers' differentiation strategies

“…Mobility services challenge car manufacturers and continue to divide opinions among them. Some manufacturers aimed at becoming mobility service providers a few years ago (Firnkorn & Müller, 2012; Jungwirth, 2018). Today efforts in the mobility service domain are rather limited (Hörcher & Graham, 2020; Miao, Jia, Li, & Qiu, 2019).…”

Designing the Business Models for Circular Economy—Towards the Conceptual Framework

“…Others argue that CE will give the companies new profit possibilities, increase competitive advantage and build resilience against several strategic challenges [4,56,57]. Detailed advantages could concern: innovation and competitive advantage, additional revenue streams, long-term contracts, customer loyalty and feedback, multiple benefits of internal resource management, and beneficial partnerships throughout the value chain [7,58,59,60]. Customer and user benefits mainly comprise of increased choice at lower cost; however, there are also some social benefits, like a contribution against climate change [4,52].…”

Circular Business Model Innovation: Inherent Uncertainties

“…Previous literature has identified several drivers of implementing a CBM, especially of the PS type. These include cost savings in manufacturing (Walsh, 2010;Stahel, 2010), differentiation potential to meet low cost competition (Besch, 2005;Heese et al, 2005), enhanced customer relations (Walsh, 2010), improved customer behaviour understanding (Firnkorn and Müller, 2012), improved margins (Pearce, 2009), reduced environmental impact (Mont, 2004) and increased brand protection (Seitz, 2007). Michaud and Llerena (2011) showed by experimental auctions that willingness to pay is not necessarily measurably lower for remanufactured products as long as environmental information is provided.…”