Car-sharing Continues to Grow Hungarian Market

Automotive

Car-sharing is supposed to complement rather than offer an alternative to transport in the city. Still at an early stage, shared mobility in Budapest (and Hungary) has enough room for more companies, market players agree.

For a couple of weeks, a new citylight campaign has been running in the most frequented parts of Budapest. It shows a photo of a young man, standing in front of a BMW with the Széchenyi Chain Bridge behind him. The slogan reads: “Gábor (32), developer. He has 100+ BMWs”.

The campaign is by DriveNow, the newest player in the local car-sharing market, which arrived in Hungary in April. Unlike other companies already present, DriveNow says its offers a wide range of models of BMWs and Minis for every life situation.  

Originally a car-sharing service run by BMW, which first launched services in Munich six years ago, DriveNow merged with a similar service run by Daimler, Car-to-go, a year ago. It has now expanded to cover 13 cities, most recently in Budapest.  

“The number of initial registrations in the first two weeks has surpassed all our expectations,” Péter Fischer, head of Wallis Autómegosztó Kft., the local franchise partner of DriveNow, tell the Budapest Business Journal. The fleet of more than 200 cars added a third to the existing car-sharing fleet in Budapest, taking it to roughly 1,000.  

While the company operates more or less within the same service zone as its competitors, its target group and the composition of its fleet is somewhat different.  

“We offer a wider range of models from 3-door compact cars to urban SUVs to serve different life situations,” Fischer says. With premium cars also in the fleet, the company also targets users to whom this matters. Those using car-sharing services regularly often use the cars of all providers and will likely benefit from a third player in the market, Fischer adds.  

Péter Bársony

Business Potential

“The number of car sharing service providers in Hungary is increasing: this means that market players see the business potential in alternative transport and shared mobility,” Péter Bársony, an e-mobility expert at PwC Hungary tells the BBJ.

Bársony says about shared mobility that, with many overlaps in their target segments, these alternative transport companies both complement and compete with each other.  

“What they all have in common is that they all target users who have an innovative and environmentally-responsible approach to transport”, Bársony says. Beyond that, it is a matter of money which option they choose, he adds. Those using public transport belong to this group as well, Bársony notes. Cycling and shared mobility represent the next level in community transport.  

This flexibility is complemented by other “perks” shared cars with green license plate are entitled to, including free parking. The exemption from parking fee can, in fact, be a competitive edge over traditional cars, the expert says.

As is the case with many services, shared mobility arrived in Hungary with a bit of delay. There is some advantage to entering a market late, though; latecomers don’t have to go through the process of trial and error typical of early entrants and can immediately start using a model that works. In this case, that has meant skipping the so-called station-based model some Western European cities tried earlier and, instead, operating a free-floating fleet, where users can leave the vehicle wherever they want within the operational zone.

Largest Fleet

Hungarian oil and gas giant MOL introduced its car-sharing service, MOL Limo, in 2017. With 450 electric and traditional vehicles, it has the largest fleet in the market.  

“We have more than 45,000 registered users, half of which have used our services at least twice,” says Richárd Sáreczky, managing director of MOL Limo. Customers have driven nearly five million kilometers since the launch; users are aged between 20 and 35 years of age, and are mostly men, which seems to be trend at other service providers as well, according to MOL.  

Cars are used most often in the morning hours and in the evening during the rush hour commute to and from work. That said, on the Pest-side, cars generally stand idle for a few minutes only. In Buda, the most frequented pick-up places are Római part and Kelenföld railway station.

Car-sharing services are not meant to replace cars and public transport but complement it, most experts agree. But they can be an option for those who have not yet bought a car. If people can let go of the idea of owning a car, the savings and the environmental benefits can be significant.  

In Munich, where car-sharing took off six years ago, about 2,000 parking places have been freed up, Fischer says. A calculation by Vienna shows that the use of shared cars in the past two-to-three years equaled to 7,000 tonnes of fewer emissions, he adds.

Will car manufacturers enter this segment as well? Absolutely, Bársony says. “What’s more, they will have to change their operating models as future users do not want to buy a car; rather, they want a service that allows them to get from A to B.”  

This means that traditional car manufacturers need to think about how and within what time frame they can transform their operations so that they themselves become a mobility service provider.  

“They need to enter a market segment where other industry players have already done so and have been there for some time.” One step is to start a car-sharing service, for which the launch of BMW DriveNow is a good example.

Steeping out on Your (Shared) Scooter

Despite the fact that Hungary has not traditionally been a motor scooter-loving nation, Blinkee.city, a scooter-sharing service introduced a year ago, has proved popular since its launch. It offers a solution to the problems that all cities with heavy traffic struggle from: parking, noise and air pollution, Tamás Varsányi, managing director of Blinkee.city Kft. tells the BBJ. The company, supported by utilities business Eon, has recently expanded its fleet to 150 electric scooters, from an initial offering of 50. Its client base is somewhat younger than that of car-sharing companies, aged 20-35, which is partly attributable to the fact that scooters can be driven from the age of 16, Varsányi explains. Regarding further expansion, he cites other European cities that have fleets of 2,000-3,000 scooters; in Budapest, there would be room for 500, he calculates. 

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