Auto Industry

Don’t dare to share

Should BMW be embracing Shenyang’s car-sharing club?

BMW-w

Any colour but blue, please

Sensual and sexy: two adjectives deemed appropriate for both the Victoria’s Secret models who adorned the catwalk and the new car they were introducing, the all new MG6. On the surface it sounds like the perfect marketing pitch. But for the readers of Britain’s Autocar magazine, the MG’s debut has struck a discordant note because the models were strutting their stuff in Nanjing and the brand’s owners are not British, but the Chinese car giant, SAIC.

One social media commentator called it a “travesty that an old British marque is launched and built in China. It isn’t an MG in any way”. The reaction demonstrates just how hard it can be to revive a brand that has a very strong association with another country. SAIC’s previous efforts to design a sports car befitting the iconic MG tag, for example, were castigated by the car pundit Jeremy Clarkson as being as “Chinese as a chopstick” and so bad that he titled his review, “MG hammered”.

A company’s brand is often its most important asset; the thing it treasures above all else. And in the case of another carmaker – BMW – it may be in danger of squandering some of its own ‘treasured’ Chinese brand equity thanks to its new popularity within the car-sharing sector.

Baoma, the company’s Chinese brand name, means ‘treasured horse’. The labelling has long been held up as one of the best cultural crossovers given how highly valued horses were throughout Chinese history (see WiC283, where we ranked BMW’s Chinese name as the best devised by a foreign firm). In modern times, BMW cars have also been status symbols for the country’s newly affluent.

But will they retain that cachet if any old bod can hire one for a maximum of just Rmb200 ($30) per day?

In mid-September, 1,500 blue BMW Series 1 cars hit the streets of Shenyang as part of a car-sharing club. And they have proved very popular. So popular in fact, that Chinese media has been reporting the frustrations of existing BMW owners, who own rather than share their cars.

“Stop staring, it’s not for sharing” read the sticker on one windscreen after the owner got fed up with hopeful punters circling the car trying to find the QR code to unlock it.

Some analysts believe that BMW may lose its pulling power as a luxury brand, since drivers that would not normally be able to afford a BMW can simply hire one for a couple of hours.

And predictably, it did not take long for the first crash to happen. On October 6, the Shenyang Evening Post reported a serious accident involving one of the cars. “I guess it was probably the first time the driver got behind the wheel of a BMW,” said one netizen. “I bet he became a bit too excited about using the accelerator.”

And in an ominous portent for BMW a second complained, “Whoever said BMW meant luxury? QR codes will be its ruin.” (That prediction may be overly bleak but sales of blue-coloured BMWs may take a hit.)

The incident also underscores one of the main challenges facing car-sharing companies; liability for damage caused by inexperienced drivers. One netizen argues that drivers should have a minimum of two years experience before they are allowed to hire a vehicle.

Another’s concern cut to the heart of a big issue the sharing economy has to grapple with: trust. “Don’t we need to worry that terrorists might be able to hire them and plant stuff?” asked one netizen.

As WiC has reported previously, China has taken to the sharing economy with gusto. In the transport sector there are multiple bike sharing companies. None are profitable, some are already closing down and others are merging to try and create economies of scale.

One of the most ambitious is Mobike, which started off in the bike sharing space, but is trying to scale up across all modes of “intelligent” transport. It numbers some of China’s leading private equity firms among its backers and secured $600 million in funding in June via its series E round led by Tencent.

Over the past couple of months, Mobike has launched a string of new initiatives including strategic cooperation agreements with taxi-hailing app Dida Pinche, and chauffered car firm Shenzhou Zuche. Thepaper.cn also says it has signed an agreement with the Guian New Area local government in Guizhou province to develop an electric vehicle platform. The Mocar may soon follow the Mobike.

China’s domestic media believes the move makes sense, even though the car industry has a far more complex industrial chain than bikes. Mobike has already built up a nationwide team of staff who might be trained to service cars. The new fleet could also be quickly integrated into its existing app.

And perhaps most importantly of all, Mobike has a big customer base of potential drivers. As Wu Dong from Zhejiang School of Management tells Caixin Weekly, “A large user base has helped the company to acquire a massive amount of data, which could be used as a new source of revenue as it moves into other sectors.”


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