The car-sharing venture formed by BMW AG and Mercedes-Benz AG will be owned by Stellantis. The move comes along as the automakers struggle to make the business profitable. All the automakers involved in the deal did not disclose any price details. Currently, the business has around 3.4 million customers across 16 European cities.
With this move, Stellantis aims to have new streams of revenue as it shifts to electric vehicles. Also, for BMW and Mercedes, this move is another step in reshaping mobility offerings. Back in 2018, the automakers combined and started the services to compete with providers like Uber to save costs. Now, the challenges to making the services profitable without the requisite scale continue. So they decided to sell the business, according to Bloomberg.
Meanwhile, Stellantis has increased its presence effectively since its formation. It has been working on getting younger buyers to try its brand and keeping up with changing mobility needs. The share Now service, currently available in European countries, was added to long-term rental options. Various models like Minis and Mercedes-Benz A-Class were made available for rentals through apps. However, there have been struggles to make it profitable.
While the companies didn’t disclose the price, Juergen Pieper, an analyst at Bankhaus Metzler, said it would likely be below 500 million euros ($525 million), and perhaps around 250 million euros. Pieper estimates Share Now has lost around 200 million euros annually, the analyst said via email. “Maybe Stellantis with its low financial investment and a leaner cost structure can make more out of it,” Pieper said. Volkswagen AG, Stellantis’ biggest European rival, is closing in on the acquisition of Europcar as part of a broader push to create a sprawling mobility services platform. A consortium led by the German industrial giant expects the deal to be completed before the end of the second quarter.
Free2Move has around 2 million customers for its app-based parking, leasing, and rental services. Share Now provides so-called free-floating car-sharing services in 16 European cities and has around 3.4 million customers. Over the next decade, Stellantis intends to expand Free2move’s presence worldwide, growing it to 15 million active users and achieving net revenues of 2.8 billion euros. The acquisition comes a little over a year after the mega-merger between Fiat Chrysler and PSA Group to form a sprawling manufacturer across 14 brands with nameplates like Jeep, Ram, and Fiat to add scale to the shift toward electric vehicles and autonomous driving.