Will shared luxury car buying succeed?

An article in the Financial Times (February 19, 2016) titled “Car-sharing tests boundaries of the motor industry” describe a company, Orto, that plans to offer four customers shared ownership of cars such as Jaguar F-type. Owners get access for 170 days over two years, up to two weeks at a time. They pay about 2500 pounds up front and 380 pounds a month. Will such shared ownership be the norm to increase utilization of luxury cars? Will such owners treat cars better than car renters? Does the new Ford initiative to allow 6 users to share a Ford pickup suggest that car manufacturers might benefit from this approach to generate sales?

About aviyer2010

Professor
This entry was posted in Capacity, Collaboration, consumer, Cost, Ecommerce, logistics, manufacturer and tagged . Bookmark the permalink.

One Response to Will shared luxury car buying succeed?

  1. Kyle Harshbarger says:

    The closest analogy to me is timeshares. Joint ownership works if there is accountability between use. The accountability mechanism is critical to the success of this idea. Mileage, car condition, and how to exchange possession have to be contracted carefully.

    On the demand side, they are trying to skim the market. The assumption of this scheme is that people want a luxury car some of the time. Why would someone want 1.2 cars? It is hard to imagine utility for this type of arrangement, so how badly do some people want a luxury car some of the time? Personally I would hate this, but I have a feeling many people would be interested.

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