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Daimler and BMW To Launch Joint Automotive Venture

March 12, 2019

Daimler and BMW To Launch Joint Automotive Venture

In Berlin at the end of February 2019, Daimler and BMW announced their plans to combine forces and create a joint ride-hailing, parking, and electric car charging business. The CEOs of the two companies plan to compete against other mobility services such as Uber to create a niche market where they can branch out. 

BMW CEO Harald Krueger and Daimler CEO Dieter Zetsche plan to invest more than one billion euros to launch this joint venture, which translates to more than $1.1 billion in U.S. dollars. Their goal is to move beyond building and selling automobiles toward systems operating on a pay-per-minute or pay-per-mile basis. 

Daimler’s CEO mentioned that collaborating with other companies is a viable option. “[We’re open to] further cooperation with other providers,” he said. This includes both startups and those who are already established. The Daimler Car2Go car-sharing company will combine with BMW’s DriveNow, ParkNow, and ChargeNow businesses. Both automakers will hold a 50 percent stake in the new venture. 

Their joint business platform will now have five distinct strands: ReachNow, ChargeNow, FreeNow, ParkNow, and ShareNow. ReachNow is a route management service based on the smartphone platform. Users of ReachNow can also book hotel/motel and care rentals through the provided app. ChargeNow services cater to electric car operators who need a place to charge their vehicles while on the road. FreeNow is a service for those who are looking for taxi ride-hailing services. ParkNow offers parking services, while ShareNow offers short-term rental services. 

According the BMW CEO Harald Krueger, “these five services will merge ever more closely to form a single mobility service portfolio.” He also mentioned that the portfolio he and Zetsche aim to create will include all-electric, self-driving vehicles that have the ability to drive and park autonomously. Both companies are working on plans to develop autonomous cars that could give the them an opportunity to get a leg up on the market for taxi and ride-hailing services. 

A consulting firm says that any automakers not focusing on upgrading their systems might face marginalization by certain technology firms unless they are able to develop services based on vehicle usage. This appears to include advancement in the autonomous vehicle market. 

Ride-hailing businesses are continuing to expand across the globe. China’s Didi Chuxing ride-hailing firm is planning on establish a presence in Latin America. Uber is gaining traction on the United States as well. American automakers and manufactures will need to step up their pace if they expect to be able to compete with other rising businesses in the autonomous vehicle and ride-hailing market.

Tags: Daimler , BMW