BMW and Mercedes sell carsharing to Stellantis

Munich Mercedes-Benz and BMW are exiting the car sharing business. The two southern German carmakers recently signed an agreement to sell their joint venture Share Now to Opel parent company Stellantis. The three vehicle manufacturers announced this on Tuesday morning. The companies have agreed not to disclose the details of the transaction. The antitrust authorities still have to approve the deal.

Ferdinand Dudenhöffer, head of the Center Automotive Research (CAR), is certain that Stellantis only has to pay a bargain price to acquire Share Now. “For Stellantis, with its large brand portfolio, it should be an extremely inexpensive entry point,” explains the long-standing industry expert. Analyst Jürgen Pieper from Bankhaus Metzler estimates the purchase price at around 250 million euros.

It is confirmed in industry circles that it is a rather small sum that Mercedes and BMW receive for Share Now. Corona had recently added significantly to the business. The number of interactions in the app dropped from 16.3 to 14.4 million last year alone.

With the exit from car sharing, Mercedes and BMW are further trimming their mobility services, which merged at the beginning of 2019. From the five apps for parking, charging, sharing cars, ordering taxis and planning trips, only two remain. In the future, the groups want to focus on services related to charging electric vehicles (Charge Now) and a mobility service (Free Now), in which customers can book all possible means of transport, from cars to e-scooters.

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The step is consistent and at the same time an admission of failure. German car manufacturers have high hopes for car sharing in particular. The business is of “central importance” was said again and again in Stuttgart and Munich. On the one hand, to better understand how expectations of individual mobility are changing. On the other hand, in big cities like Paris, where private cars are increasingly being banned from the districts, to have an offer at all.

But the high expectations of the business were never fulfilled. With the merger of Car2Go (Mercedes) and Drive Now (BMW) three years ago to form Share Now, the companies wanted to grow strongly and at the same time minimize their losses. Instead, in 2019 alone there was a deficit of 720 million euros on the company’s balance sheet due to high depreciation. A loss of 235 million euros followed in 2020. The corona pandemic has also hit the business hard. Share Now was recently a long way from the sustainable profitability the owners were aiming for.

Mercedes boss Ola Källenius and BMW frontman Oliver Zipse were also never considered big supporters of the mobility services business. It was their predecessors, Dieter Zetsche and Harald Krüger, who wanted to create a “world’s leading game changer” to stand up to Uber, Lyft and Co. They invest one billion euros and issued the motto: “The sky is the limit”. Källenius and Zipse, on the other hand, are pursuing a completely different strategy. They are refocusing the companies on their core: car manufacturing.

Stellantis aims to become the world’s leading carsharing company

In this respect, it is understandable that Mercedes and BMW are now separating from Share Now. Car sharing also remains an “essential element” in the mobility offerings of the corporations – only just integrated into the Free Now app, emphasizes Gero Götzenberger, Director of Strategy and Investments at Mercedes-Benz Mobility. Rainer Feurer, Head of Corporate Investments at BMW, adds: “Free Now and Charge Now are very successful with their approach of building a software platform for as many players as possible in their respective segments.”

Stellantis wants to position itself as a “leading carsharing company” with the acquisition of Share Now. In addition to the seven cities in Europe and the United States in which the group is already active with its Free2Move service, 14 more metropolitan areas are now being added. In total, Free2Move will gain more than 3.4 million customers thanks to the deal and will have a good 5.4 million users in the future, the group said. The vehicle fleet grows from 2,500 to 12,500 cars.

“This acquisition will also accelerate our growth in Europe,” said Brigitte Courtehoux, CEO of Free2move. “At the same time, we are one step closer to our goal of expanding Free2move’s global presence to 15 million active users by 2030.”

Stellantis emphasizes that Free2Move is already a profitable business. The services of Mercedes and BMW would create new economies of scale and synergies. Stellantis wants to increase net sales with mobility services to 2.8 billion euros by the end of the decade. As a milestone, the group calls a turnover of 700 million euros by 2025.

Car expert Dudenhöffer speaks of a “line” that Mercedes and BMW are now drawing on car sharing. From his point of view, Share Now is better off with a mass manufacturer like Stellantis, which includes brands like Peugeot, Opel, Fiat, Jeep and Chrysler, than with two suppliers of luxury cars.

“In the volume market with inexpensive vehicles, ShareNow has the best chance of surviving,” explains Dudenhöffer. “With the deal, Stellantis is also taking on the fight against the VW Group, Toyota, GM and Ford in the mobility business.”

More: Free Now will also broker rental cars from Sixt in the future

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