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A Smart commuter solution for overcrowded megacities

Eric, the twentysomething cab driver in Berlin, lives in Europe's hottest capital and, ironically, he's a professional driver who cannot afford his own car. Car-sharing with Car2Go is his answer for personal transport.

Mac, the Vancouver-based University of British Columbia poli-sci student, can't afford a car either, and his Calgary-based parents can't loan him the family ride. So he, too, has a subscription to Car2Go – good enough for a budding lawyer on a tight budget.

Then we have different business types in Calgary and Toronto. Tim Reuss, Mercedes-Benz Canada chief executive officer, says the fastest-growing Car2Go market in Canada is Calgary, land of pickups and sport-utility vehicles. Why? A downtown parking space can cost $30 or $40 a day. The commuter from the 'burbs can do it in a Car2Go Smart for $10. Albertans may be loaded, but they're also practical.

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Toronto?

"Here's my sales pitch," he says, "A parking space in the downtown normally costs $15 a day, but for a Smart it costs $10 downtown a day. For 20 working days a month, that's $100. The lease rate on a new Smart is $99 a month. You just got your Smart for free" if you park downtown every day.

Reuss, of course, has gone beyond Car2Go to include the entire Smart brand in general. But they really are one and the same. Mercedes' parent, Daimler AG, owns Smart and has a long-range plan to grow the brand, mostly in the growing number of ultracongested megacities.

"Smart wants to be more than a car," Smart brand head Annette Winkler says. "Many people are now looking for mobility solutions. Car2Go is an example of how the Smart brand can provide those mobility solutions. If you buy a Smart, you get Car2Go registration for free, globally. Car2Go puts more Smart cars on the street, so it helps to promote the brand."

A global phenomenon is happening here. It's not just about age and finances. If an oil baron in Calgary embraces the same transportation solution as a banker in Toronto, a cabbie in Berlin and a student in Vancouver, we might be looking at a trend that transcends income, class, status, education and life stage. Car sharing is coming of age.

Why? "Peak Car." A number of researchers believe global sales will peak at 100 million units a year within the next decade. Last year, global sales hit 82 million and IHS Automotive says the world's auto makers are creating capacity to build 120 million vehicles by 2016. The world's roads don't have the room to add 120 million new cars a year, minus the few million scrapped annually.

So, if you're a car company with a long-term plan to stay profitable, "the key question is: Do you sell cars or do you sell mobility?" Tim Ryan, a New York-based vice-chairman of markets and strategy for consultant PricewaterhouseCoopers LLP, said in a Bloomberg report. "If you ignore these megatrends, you run the risk of becoming irrelevant."

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Winkler says "mobility solutions" are central to Smart's plan to be relevant and profitable.

"Smart is an urban car, developed as the perfect urban mobility solution," she says. "So we set out to see which cities are perfect for Smart and we concentrate our efforts there."

A Smart city has narrow streets, a lack of parking, congestion and environmentally conscious residents who are what she calls "forward thinking." They see luxury differently – it's small and convenient. Smart is concentrating efforts in megacities with the right cultural fit – Vancouver, Toronto, Berlin, Nanjing, Austin, Tex., San Francisco and so on. Smart and its dealers swoop in, work with local officials and businesses to create cheaper Smart-specific parking spaces and such. A smart app helps you navigate.

"This is a hell of a lot of work for dealers and people on the ground, but it's a big advantage for people in the city," she says.

This is the future. Just ask Eric or Mac.

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