zetsche dieter

A strategy for scaling up demand for new mobility services has led to a unique alliance between two of the world’s biggest automotive rivals.

The BMW Group and Daimler are merging their mobility services businesses, giving them a combined reach of up to 40 million current customers.

Each company will hold a 50% stake in a joint-venture comprising both companies’ mobility services.

While the two companies will remain competitors in their respective core businesses, consumers will benefit from their greater combined reach and expansion, along with key customer service elements such as a common platform for bookings and payments.

The move recognises two important criteria for driving the growth of mobility services.

Firstly, scale is a key factor in delivering profitable services and, secondly, customer experience will be critical in encouraging greater levels of use, particularly in removing any potential barriers.

Under the agreement between BMW Group and Daimler, they will combine and strategically expand their existing on-demand mobility offering in the areas of car sharing, ride hailing, parking, charging and multi-modal services.

The companies prepared the ground for the merger by buying out external partners for car-sharing services, including Sixt for BMW’s DriveNow and Europcar for Mercedes-Benz Car2go.

Once they receive regulatory approval for the merger, the two companies aim to develop an ecosystem of connected mobility services that can be booked through internet-enabled devices, including smartphones.

The combined business will allow rapid growth in services, including extending availability of electric car sharing.

The joint venture model is designed to combine services in the following five areas:

daimler moovelMultimodal and on-demand mobility with moovel and ReachNow: Seamless connectivity between different mobility offerings – including booking and payment – to benefit users across platforms.

Car sharing with Car2Go and DriveNow: Car2Go and DriveNow operate a total of 20,000 vehicles in 31 major international cities. More than four million customers already use these car-sharing services.

Ride hailing with mytaxi, Chauffeur Privé, Clever Taxi and Beat: In total, 13 million customers and more than 140,000 drivers are using ride-hailing services through mytaxi, Clever Taxi and Beat or private hire vehicle service Chauffeur Privé. Other offers include mytaximatch, in which people share taxis to reduce costs.

Parking with ParkNow and Parkmobile Group/Parkmobile: These services provide ticketless, cashless on-street parking or help finding and reserving off-street parking in a garage. Cars searching for parking spaces currently account for around 30% of road traffic.

Charging with ChargeNow and Digital Charging Solutions: The service provides access to 143,000 charging points worldwide, including support with identifying locations and availability.

Harald Krüger, chairman of the board of management of BMW, said: “The BMW Group is shaping future mobility. Combining our mobility services as planned will create a unique digital ecosystem. This alliance will make it easier for our customers to discover the emission-free mobility of the future.

“We remain competitors when it comes to premium vehicles. The planned merger of our mobility services will pool our resources and sends a strong signal to our new competitors.”

Dieter Zetsche, chairman of the board of management of Daimler and head of Mercedes-Benz Cars, said: “We will not leave the task of shaping future urban mobility to others. There will be more people than ever before without a car who will still want to be extremely mobile. We want to combine our expertise and experience to develop a unique, sustainable ecosystem for urban mobility.”

Bodo Uebber, member of the board of management of Daimler, responsible for finance and controlling and Daimler Financial Services, said: “The sustainable mobility of tomorrow is flexible and connected – a vision we share with our partner, the BMW Group.

“Together, we can offer millions of customers highly-attractive products and services to make their lives easier and their environment a better place to live. The options offered by the planned joint venture-concept will complement mobility services offered by cities.”

In 2017, the BMW Group sold nearly 2.5 million passenger vehicles worldwide and more than 160,000 motorcycles, generating pre-tax profits of nearly €11 billion on revenues amounting of €99 billion.

Daimler has group revenue of €164 billion and earnings of more than €14 billion.