Car clubs focus on urban drivers

Hertz, one of the largest car buyers in the world, is launching a new scheme that is likely to threaten its major suppliers – the big carmakers.

The rental car giant, which typically purchases 550,000 new cars annually, has launched a new car sharing club in three major cities that is meant to discourage urban residents from owning cars.

“It’s an alternative to car ownership,” said Michel Taride, who is the Hertz Europe president. “For us it’s a great growth opportunity.”

The global car club market is currently worth $1 billion, although it is expected that this will soar to $10 billion or more in the next 5-10 years, according to Taride’s prediction.

“Car clubs appeal to urbanites who still need to use a car, but don’t want the hassle of owning one,” noted John Lewis, the director general of the British Vehicle Rental and Leasing Association.

He added: “Car clubs will grow as populations continue to migrate towards cities, where there is already a huge market for pay-as-you-go transport.”

A shift of any magnitude away from outright car ownership could harm struggling manufacturers, as each car in a car club or sharing scheme can replace 20 privately-owned vehicles.

“Car manufacturers make most money from retail sales,” said Taride.

Thanks to news.bbc.co.uk for the above quotes, for more information on this article please visit their website.

www.hertz.com