Auto rivals join hands to win in the age of tech

TOMORROW’S automakers are marrying engineering and technology to make the transportation experience better.

German carmakers Daimler (owner of the Mercedes brand) and BMW recognize that and are forming a partnership to expand their businesses and stay relevant.

In a joint statement, BMW Group and Daimler AG said they will be joining forces to “offer customers a single source for sustainable urban mobility services.” This includes their car-sharing units Car2Go and DriveNow.

The deal will see the two luxury carmakers working together in areas of car-sharing, ride-hailing, parking, charging and multimodality. Each company will hold a 50 percent stake in the joint venture.

It is hardly surprising that the companies should decide on a joint venture. Given that the ride-hailing market is expected to reach US$276 billion by 2025, according to Research and Markets, if traditional carmakers didn’t reinvent their strategy, they could become irrelevant very quickly.

The partnership will see both companies collaborating together for an ecosystem of intelligent, seamlessly connected mobility services. Both companies will be cooperating with cities, municipalities, and other interest groups to improve quality of life in major cities.

Dieter Zetsche, Chairman of the Board of Management of Daimler AG said:

As pioneers in automotive engineering, 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.

One of the areas the joint venture will work on is electromobility. By offering electric “car-sharing” vehicles and easy access to charging and parking options, the merger aims to improve the experience and promote the use of sustainable mobility services.

“The future of mobility lies in cities: The key to more livable cities lies in intelligent and seamless services that are easy to use and combine sustainable modes of transport and mobility services,” said Peter Schwarzenbauer, member of the Board of Management, BMW AG.

The two companies are also forming significant partnerships with technology companies to become more competitive.

Earlier this year, for example, Mercedes tied-up with NVIDIA for AI and autonomous capabilities. Daimler also bought the remaining 25 percent stake in Car2Go from owner Europcar for EUR 70 million (approx. $86 million).

In January, the BMW Group acquired Parkmobile, the largest provider of mobile parking services in North America.

While the future of the two companies is bright, their efforts might transform their future of automakers altogether.

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