For those of you who have driven some of the meanest and the coolest cars from BMW and Mercedes, you must have wondered how a monster of a car it would be if BMW and Mercedes joined hands together to make an ultimate car with the luxury and tech from the Mercedes and the amazing performance and suspension of the BMW. BMW and Mercedes are merging, but sadly there won’t be any collaboration of the sort.
Two of Germany’s biggest carmakers Daimler and BMW have agreed to combine their digital mobility services into a new co-owned business. You may wonder why would these already two Giants combine forces; the answer is cutting costs and making mobility services more profitable. Obviously, both companies will continue their strong competitiveness in their core business. These services will give you the options of hailing taxi’s (human or autonomous) tackling Uber, Lyft and Waymo head on. You would also be able to pay to park, find fuel stations and working electric charging stations, and booking cars from their shared fleet of cars. BMW and Mercedes already have services like Car2Go and ReachNow/DriveNow which would now operate in tandem, I assume. As of 2017, Car2Go is the largest car-sharing service with a staggering 2.5 million members and a fleet of approximately 14,000 vehicles working in 26 different countries across Europe, North America and Asia. DriveNow operates over 6,000 vehicles in nine European countries, and operates as ReachNow in three US cities, whereas its counterpart DriveNow operates in multiple European countries with a fleet of approximately 6000 vehicles. To look at the seriousness of Mercedes towards mobility services, it now owns MyTaxi, Hailo, Taxibeat and Careem.
The agreement was signed on Wednesday to form a 50:50 joint venture that will include five pillars: parking, car sharing, ride-hailing, electric vehicle charging and a payment component of the business. We don’t know as of yet what the company will be called, but it will be based on a single android/iOS application, through which all features will be directly accessible. Presumably, cars from sub-brands of BMW and Mercedes like the Mini and Smart will also be available.
The deal wasn’t entirely new and unexpected but still managed to send a powerful signal to the world that Mercedes and BMW are desperate to make their mobility services profitable. Car companies have been having a bit of downfall trying to squeeze out revenue from this side of the business, so a deal like this will allow both BMW and Mercedes to gain economies of scale and tip the balance in their favour.
At the New York International Auto Show BMW Group board member Peter Schwarzenbauer said;
People will look back on today as a historic moment for the mobility of the future, two of the major players in the automotive industry are basically joining forces in building a new company, which will in my eyes, offer a level of service that is unheard of yet. The target isn’t to do a little bit here and a little bit there, we want to become the leading provider when it comes to mobility services.
A recent report has claimed that the two giants are getting even friendlier than that. The touchy subject of the platform and parts sharing has also been alleged since both sides are open to the idea of cost-saving. Some of the parts shared would be self-driving technology, batteries and even entire chassis, but we understand no agreement has been reached as of yet.
Harald Krüger, BMW board chair said in a statement.
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 the best premium vehicles. The planned merger of our mobility services will pool our resources and sends a strong signal to our new competitors.
We want to combine our expertise and experience to develop a unique, sustainable ecosystem for urban mobility.
This seems to be a very good move for both the companies and us, but we can’t get our hope up very high since the business deal is still subject to approval by the antitrust regulators.
