BMW Plans to Test Short-Term Car Rentals in Munich

BMW Group announced plans to launch a short-term car rental program called "BMW on Demand" near its company headquarters in Munich, according to the Wall Street Journal.

The 12-month pilot program will allow drivers to rent any current BMW model by the hour, from the automaker's compact 1 series (€16, or $22.29, an hour) to its flagship 7 series sedan (€32 an hour). Customers will be able to pick up and drop off the cars at BMW Welt (or "BMW World"), the automaker's event and car delivery center. Customers will be able to reserve vehicles online, by phone or at a counter at the center.

A BMW spokesman told the Wall Street Journal that the company expects potential customers to choose models they couldn't purchase outright-such as its M6 sports coupe, which has a U.S. starting price of $102,350-and rent them for special occasions. If the program is successful, the automaker plans to open more leasing sites in Munich and eventually in other European cities.

BMW's new program follows in the footsteps of other European automakers, such as Daimler AG and PSA Peugeot Citroen, which have explored other transportation programs besides simply selling cars.

Daimler's "Car2go" is a Web-based ride-sharing program. The program links drivers with Daimler's Smart-brand cars, allowing them to find and pickup a vehicle on the spot, then drop it off when and where they prefer.

French automaker Peugeot's "Mu" program allows drivers to use a pre-paid account to lease vehicles-from a van to a scooter to a bicycle-on a short-term basis.

These automaker-backed car sharing and car rental programs may pose some competition to car-sharing heavyweight Zipcar and a recent crop of startups like Spride Share, RelayRides and WhipCar. There isn't a crystal ball to tell which programs and companies will survive in the long run, but analysts said the car-sharing industry is expected to bloom.

Research firm Frost & Sullivan said the number of drivers using car-sharing networks increased 117 percent between 2007 and 2009 in North America. Within five years, the firm expects to see 4.4 million people in North America and 5.5 million people in Europe sign up for car-sharing programs, more than tripling membership from 2009.

In addition, the firm forecasted that by 2016, revenue from car-sharing services could reach up to $3.3 billion in North America and €2.6 billion (about $3.2 billion) in Europe, up from $253 million and €220 million ($269.7 billion) in 2009, respectively. 

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