Volkswagen buys Europcar: car sharing should become profitable

VW relies on new mobility services and Europcar

Europcar at Merignac Airport near Bordeaux: With the takeover of the car rental company, Volkswagen wants to make car sharing profitable.

(Photo: Reuters)

Dusseldorf The Volkswagen Group is starting a new attempt to put the car sharing business, which is not very profitable for the entire automotive industry, on a financially viable basis. The key role here is played by the now completed takeover of the car rental company Europcar. In the future, VW wants to serve rental and car sharing from a single vehicle fleet – and thus ensure profitability.

Volkswagen completed the acquisition of Europcars on Tuesday. More than 90 percent of the previous shareholders have accepted the takeover offer from the VW Group. As a result, the car manufacturer can take the vehicle rental company off the stock exchange and buy the remaining shareholders’ shares via a “squeeze-out” process.

Overall, the French company is valued at around 2.5 billion euros. Volkswagen is not taking over Europcar alone. The conglomerate Pon Holdings – VW importer in the Netherlands – and the financial investor Attestor are the other consortium partners. Two-thirds of the shares are held by VW.

The Wolfsburg-based company was already the owner of Europcar, but had sold the car rental company in 2006 for around 1.3 billion euros. At that time, the pure rental business no longer offered any great prospects, which is why VW decided to withdraw.

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With the new additional mobility services, however, the business basis has changed fundamentally again, and car rental companies have become interesting again. VW had also been interested in Sixt, but had failed there with a takeover. “No one has ever managed to make carsharing profitable in the long term,” said Christian Dahlheim, CEO of Volkswagen Financial Services (VWFS), on the basic idea of ​​the new mobility concept, for which Europcar is to provide the basis. VWFS, the automaker’s finance and leasing subsidiary, is to promote the idea for the group and in cooperation with the subsidiary brands.

Offer where there is already high demand

Europcar is bringing in a fleet of around 230,000 vehicles that can be used for both rental and car sharing in the future. Volkswagen hopes that the capacity utilization of the cars can be increased significantly.

For example, rental is more concentrated on working days, and car sharing is particularly important at weekends, emphasizes VW. Volkswagen wants to use the large and comprehensive Europcar network as handover points for the vehicles. The rental company currently has around 1,150 stations, mainly at train stations and airports – where the need for individual mobility offers is particularly great.

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The VW Group believes that it can avoid the fate of other car manufacturers with the combination of rental and car sharing. Mercedes and BMW in particular had to learn a lot with their subsidiary “Share Now” and had made losses in the billions in recent years.

At the beginning of May, both had drawn the line under their car sharing business and sold their joint subsidiary to the car manufacturer Stellantis. The multi-brand group relies on mass with its car-sharing concept.

Moia taxis are also integrated

As premium providers, Mercedes and BMW had comparatively few vehicles on offer. Mass brands such as Peugeot and Fiat are now being added by the Stellantis Group. “In the volume market with inexpensive vehicles, Share Now has the best chance of surviving,” said Ferdinand Dudenhöffer, Professor at the Center Automotive Research (CAR) in Duisburg.

Volkswagen wants to offer a uniform app via Europcar in which the various mobility services are combined. In the future, this app will not only offer rental cars and car sharing offers. The VW group also wants to sell car subscriptions. Only direct vehicle sales are excluded.

The VW Group initially selected two cities as test areas for the new combined mobility idea. In Vienna it should start in the fourth quarter of this year, in Hamburg in spring 2023. There should be another offer on the mobility app from Europcar in the future.

In Hamburg, the minibuses of the VW subsidiary Moia have been on the streets for several years. This ride pooling offer with Moia shared taxis is also to be integrated into the Europcar app.

In a second step – probably towards the end of the decade – there will also be fully autonomous robotic taxis from Moia. This should also change the character of VW fundamentally: The company will change from a pure vehicle manufacturer to an IT-driven provider of mobility services.

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