Sixt SE, Germany’s biggest auto-rental company, said its car-sharing venture with Bayerische Motoren Werke AG (BMW) is profitable in cities where it’s been operating for more than a year as sign-ups exceed forecasts.
“We’ve been surprised about the explosion of new subscriptions, which has helped boost revenue,” Erich Sixt, chief executive officer of the Pullach-based company, said today on a conference call with reporters.
BMW, the world’s biggest luxury-auto manufacturer, and Sixt operate the DriveNow service in the German cities of Berlin, Hamburg, Cologne, Munich and Dusseldorf, as well as in San Francisco. The venture is targeted at attracting young consumers to the Munich-based premium automaker before they consider buying a vehicle as they grow older and have families.
The partners are in talks on the terms of expanding DriveNow under a five-year plan to reach 25 cities in Europe and the U.S., Erich Sixt said.
Even with the profitable locations, Sixt still expects a “small-to-medium, single-digit” million-euro loss for DriveNow this year as startup costs in new areas outweigh revenue gains, Chief Financial Officer Julian zu Putlitz said on the call.
Membership has gained to more than 300,000 customers from 215,000 at the end of last year, Sixt today in a statement.
“We didn’t expect such a dramatic rise in membership,” Sixt said.
DriveNow allows customers to rent vehicles by the minute for point-to-point trips, and to leave the car parked on city streets when they’re finished. The fleet includes models from BMW’s Mini small-car brand plus the 1-Series compact and X1 sport-utility vehicle from the namesake marque.
The program’s main competitor is the Car2Go service from Stuttgart, Germany-based Daimler AG that offers Smart-brand two-seat autos by the minute in about two dozen cities.
Sixt’s second-quarter net income jumped 12 percent to 28.3 million euros ($37.7 million) as sales rose 7.6 percent to 441 million euros, the company also said today.