Vehicle-type strategies for manufacturer's car sharing

Abstract

PurposeThis paper aims to study vehicle-type strategies for the manufacturer's car sharing by accounting for consumers' behavior and the subsidy.Design/methodology/approachThe authors develop a game model, in which a monopoly manufacturer that can produce gasoline vehicles (GVs) or energy vehicles (EVs) not only sells vehicles in the sales market, but also rents them out in the sharing market by the self-built platform. The manufacturer strategically chooses which type of vehicles based on consumers' behavior and whether the government provides the EVs’ subsidy.FindingsWhen consumers' low-carbon awareness is relatively high or the marginal cost is low, the manufacturer chooses EVs. The manufacturer chooses GVs when the low-carbon awareness and the marginal cost are low. Only when the low-carbon awareness and the subsidy are not too low, the manufacturer who originally chose GVs launches EVs. When the low-carbon awareness is high, the excessive subsidy discourages the manufacturer from entering the sharing market. If the government provides the subsidy, the manufacturer launches high-end EVs. Otherwise, the manufacturer launches low-end EVs. Moreover, the subsidy increases consumer surplus and social welfare since the high subsidy makes EVs’ sharing market demand be negative.Originality/valueThis study enriches the literature on vehicle-type strategies for the manufacturer's car sharing, owns a practical significance to guide the manufacturer's operation management in the car sharing market and provides advice on whether the government should provide EVs’ subsidy.