LONDON, March 28, 2018 /PRNewswire/ -- Commenting on the fusing of BMW's and Daimler's DriveNow and car2go car-sharing companies into a joint entity, Frost & Sullivan Industry Principal Shwetha Surender reports that the scope of the merger is much more extensive than originally anticipated.
"For over a year, the two behemoths have been contemplating combining their car-sharing operations. From the perspective of the car-sharing market, this makes perfect sense. Operating in an industry that is struggling to achieve profitability, it would allow them to gain economies of scale and tip the balance in their favour," Surender notes.
The merger raises the stakes for the competition. As a combined company, car2go and DriveNow would now become one the largest operators in the space, accounting for a global market share of over 30%, allowing them to go head-to-head with market leaders such as Zipcar.
Surender adds: "What makes this 50:50 joint venture much more interesting is the consolidation of all their mobility operations across the areas of Car-Sharing, Ride-Hailing, Parking, Charging and Multimodality. This is a clear indication of their intent to offer a 'holistic ecosystem of intelligent, seamlessly connected mobility services, available at the tap of a finger.' The merger is likely to set the trend for further consolidation as participants realise they can't go it alone – partnerships will be the magic word."
It certainly drives home the fact that services are the future. Frost & Sullivan expects the value for total mobility services to cross the $2 trillion mark by 2030. It would prove to be the perfect vehicle for their CASE (Connected, Autonomous, Shared and Electric) strategy.
The merger, however, raises very interesting questions as to brand competitiveness. Both BMW and Daimler will continue to compete in the passenger vehicle space. Will they learn to play nicely within the same service ecosystem?
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SOURCE Frost & Sullivan