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BMW and Daimler partner in a €1 billion mobility joint-venture

 Photo: Daimler AG
Photo: Daimler AG

German automakers BMW Group and Daimler AG have embarked on a joint partnership in the mobility segment, investing €1 billion in five different verticals within the market. In a meeting held in Berlin, Dieter Zetsche, the chairman of Daimler AG, and Harald Krüger, the CEO of BMW Group, outlined their plans on scaling up within the burgeoning mobility market. They  explained that Daimler’s car2go and BMW’s DriveNow would be brought together to offer varied mobility solutions under a single umbrella.

Called the ‘Now Group,’ the joint venture would work autonomously, with both the original equipment manufacturers (OEMs) holding a 50 percent stake in all the five ventures in the segment.  

The Now Group focuses on five ventures:

Reach Now – a smartphone-based route navigation service

Park Now – a service helping vehicles find available parking real-time and also providing an option of pre-booking parking space

Charge Now – a map showing electric vehicle charging spots across town

Free Now – a ride-sharing service similar to Uber’s carpooling

Share Now – a car-sharing solution that expands on car2go’s existing network

The joint venture has been in the works for over a year, with rumors going around about it being named ‘Jurbey.’ However, this was never brought up at the auto makers’ press conference on February 22, thus quelling the hearsay around Jurbey.

It is interesting to see the growing importance of the service sector within auto manufacturing circles. Century-old rivals Daimler and BMW are now compelled to work together in the mobility sector, a scenario that is rather uncommon within the industry.

“We’re pooling the strength and expertise of 14 successful brands and investing more than €1 billion to establish a new player in the fast-growing market for urban mobility,” said Daimler AG’s Zetsche. “We’ll be able to shape the future of urban mobility and benefit from the opportunities offered by digitalization, shared services and our customers’ increasing mobility needs. Further cooperation with other providers, including stakes in start-ups and established players, are also an option.”

“We are creating a leading global game-changer. The 60 million customers we already have today will benefit from a seamlessly integrated, ride-hailing, parking, charging and multimodal transport services,” said BMW’s Krüger. “These five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously, and interconnect with the other modes of transport.”

As is evident from the formation of the Now Group, the future of the transportation industry will  be a mix of both manufacturers and service providers, with OEMs seeing the need to venture into services, as new business models like shared and alternative mobility draw huge crowds, especially in urban settings.

Taxi-hailing giant Uber is positioning itself to be the Amazon of road transportation, expanding into every mobility segment that shows promise – be it cab-pooling, car-sharing, electric-scooter sharing, vertical take-off and landing (VTOL) aircraft – all of which come under the broader banner of mobility-as-a-service (MaaS) solution. OEMs have woken up to the threat that such services would have on conventional private car business models they heavily depend on, pushing them to adapt to changes in the mobility landscape.

Both Daimler and BMW have mentioned their interest in investing and acquiring technology startups in the space, and their willingness to cooperate with established players in the market to expand their reach in the segment. The companies have taken autonomous driving technology seriously, and are also actively looking to increase their electric-vehicle market share.

It is an exciting time in the industry, as we witness established OEMs being forced from the complacency of feeling secure with their standing in the market, and made to invest in a future that inches towards a mobility ecosystem of shared community-owned electric vehicles driven by autonomous technology.