Following the merger of 14 brands, they will be able to build on a base of over 60 million customers. The result is not one large joint venture, but five small ones: "Reach Now", "Charge Now", "Free Now", "Park Now" and "Share Now". Each company has its own managing director, who will present a business plan in the next three to four months and draw up proposals for possible collaborations with other companies. There are currently no plans to go public in order to attract further investors and thus be able to operate on an equal footing with Uber and the like. The headquarters are located in the start-up metropolis of Berlin [1].
Rivals become partners
For decades, the two car manufacturers were arch-rivals and battled worldwide to be number one in the lucrative premium business. This constant competition has made the two archrivals strong and ensured that both have continued to develop and have earned the title of "Premium manufacturer" around the world. In order to be able to survive in the future, the two have now decided to work together[2].
"The BMW Group and Daimler AG are bundling their mobility services and creating a new global player that consistently implements sustainable urban mobility for the benefit of customers," according to Daimler's press release. You can watch the entire press conference here.
Development in e-mobility takes its toll
In the Development and production of vehicles with diesel and gasoline engines German car manufacturers have developed an expertise over decades that is difficult for others to match. However, this supremacy is put into perspective by the German government's strategic plan, among other things. The German government had originally set the goal of One million electric cars on German roads by 2020 but she has long since said goodbye to that. Chancellor Angela Merkel said last September that the target would not be reached until 2022. The Investment in electric vehicles costs billions. Costs that can be recovered through efficiency elsewhere (such as merging mobility services). refinanced are to be introduced. Such measures show the enormous pressure that companies are under: Trade disputes, WLTP emissions tests, CO2 directives and the diesel scandal, which is still in the spotlight, are hitting the major manufacturers hard [3][4].
Car manufacturers are more than just hardware manufacturers
Anyone who only builds cars has no chance of survival in the long term. It is no longer just about driving vehicles. Rather, the goal is, Getting people from one destination to another as conveniently and cheaply as possible. The management level of the automobile manufacturers must therefore Mobility service provider make. Instead of generating one-off sales, the aim in future is to "Service-based" long-term operating models to be established. This is where software development will gain importance in the future [5].
Focus on software development: agility and digitalization
"...to create something new and original, not to be under pressure from corporate headquarters," says BMW CEO Krüger about the reasons for locating the joint ventures in Berlin. The startup mentality should come into play and the Agility required for this type of projectshould be promoted. Similar to other global players such as Uber or Didi, the Focus on software development be placed.
BMW writes about this in a press release:
"With their joint mobility services, the BMW Group and Daimler AG are providing the answers to current and future mobility requirements, especially in metropolitan areas. Digitalization is the key to this. It opens up new possibilities for more individual mobility" [6].
Market power: the big players are the winners
"The winner takes it all": this is how the Battle for market share in the mobility service provider sector. Size is absolutely crucial for anyone who wants to play the game. After all, only the really big players have the prospect of winning with their Platforms future standards to set. The more journeys and customers there are, the faster the stock of data is growing. Competitors worth billions, such as Uber and Lyft in the USA or DiDi in China, now want to stand up to the German companies. The battle for customer growth is primarily about Strategic investments and customer campaigns. This has been observed in recent years in China, for example. The big players Uber and Didi Chuxing have been engaged in a veritable battle to squeeze out the competition. In the battle against the Americans, Didi is relying on a international alliance - including with Uber competitors such as Ola (India), Grab Taxi (Singapore) and Lyft (San Francisco). Both of them have massive discounts fought against each other and Losses in the billions. But that came to an end in 2018: the ride-hailing service provider Uber and its Chinese competitor Didi merged on the Chinese market. In return, the US-based Uber parent company received shares in Didi. This example shows how capital-intensive the business is and how tough the battle is [7].
One opportunity for Daimler and BMW could be the premium segment for driving services such as UberBLACK. Here, the new mobility services could represent serious competition and a Luxury alternative to "normal" driving represent. Car manufacturers already have the corresponding premium image.
The strategy pays off for "autonomous driving"
The five services ("Reach Now", "Charge Now", "Free Now", "Park Now" and "Share Now") are increasingly merging into one. Mobility offering with fully electric and self-driving fleetsthat can be charged and parked independently and connected to other means of transportation," says Harald Krüger, Chairman of the BMW Board of Management [8].
This statement also fits in with the current activities of Daimler and BMW: a Extensive cooperation on autonomous driving. According to information from manager-magazin.de, a Consolidation of development activities The companies could even disclose patents to each other. With this collaboration, the two car manufacturers want to billion-euro development costs in the future topic of autonomous driving and to create a Establishing the industry standard. A corresponding Software solutionwhich is already geared towards both companies, would be the logical consequence [9].
Especially if you take a look into the future, topics such as "Robo Taxis (SAE Level 4 or 5)" platforms must be available. A lot of experience can already be gained here and appropriate structures and platforms created at an early stage about which the Arrangement and invoicing of journeys takes place.
Antitrust concerns? Under what conditions did the EU agree?
The ICE manufacturer Siemens and the TGV manufacturer Alstom had wanted to merge their rail divisions in order to become Europe's largest producer and, above all, to survive international competition. The companies argue with growing competition from the world market leader CRRC from China. This plan was rejected by the EU Commission this month [10].
A similar argument to that of BMW and Daimler. Although the EU competition authority allows Daimler and BMW to Consolidation of car sharing and other mobility servicesbut has some Conditions linked to this. The two companies must Provide interfacesso that other mobility service providers can integrate the Drivenow and Car2go car sharing services into their respective apps. Daimler must also grant other car sharing services access to its mobility app Moovel [11].
What about Audi and Porsche?
Audi, the third in the league of German premium manufacturers, is not part of the new mobility alliance. "Because they simply had nothing that they could contribute to this liaison," a Mercedes manager told Die Welt [12].
To be fair, it has to be said that both Audi and Porsche are adhering to the VW Group strategy and are therefore more difficult to compare. With the VW Group behind them, the management team in the field of electrified mobility services from Wolfsburg will certainly not be cutting back and will utilize the economies of scale and services across the VW Group. According to current plans, the VW Group will produce around one million electric vehicles a year in Germany alone by 2025. That is around 20 percent of the current German passenger car production of all manufacturers.
The highly competitive international automotive market remains exciting. As a consulting and software company that has been active in the field of mobility solutions for many years, we too Software systems in conception and implementation are curious to see how the services will develop further and which opportunities from the customer perspective this results in.
Sources:
[1] https://www.auto-motor-und-sport.de/tech-zukunft/mobilitaetsservices/bmw-und-daimler-gruenden-5-neue-joint-ventures/
[2] https://www.welt.de/wirtschaft/article189279961/BMW-und-Daimler-Dieser-Deal-stellt-das-Autoland-auf-den-Kopf.html
[3] https://www.faz.net/aktuell/wirtschaft/diginomics/bundesregierung-will-e-auto-praemie-offenbar-laenger-zahlen-16038567.html
[4] https://www.electrive.net/2018/12/05/boersenwert-tesla-ueberholt-nach-bmw-nun-auch-daimler/
[5] https://www.welt.de/wirtschaft/article189279961/BMW-und-Daimler-Dieser-Deal-stellt-das-Autoland-auf-den-Kopf.html
[6] https://www.press.bmwgroup.com/deutschland/article/detail/T0292204DE/bmw-group-und-daimler-ag-investieren-mehr-als-eine-milliarde-euro-in-gemeinsamen-mobilitaetsdienstleister
[7] https://www.tagesschau.de/wirtschaft/uber-didi-101.html
[8] https://www.auto-motor-und-sport.de/tech-zukunft/mobilitaetsservices/bmw-und-daimler-gruenden-5-neue-joint-ventures/
[9] http://www.manager-magazin.de/unternehmen/autoindustrie/bmw-und-daimler-pruefen-kooperation-fuer-autonomes-fahren-a-1249046.html
[10] https://www.tagesschau.de/wirtschaft/siemens-alstom-115.html
[11] https://www.golem.de/news/mobilitaetsdienste-drivenow-und-car2go-duerfen-fusionieren-1811-137595.html
[12] https://www.welt.de/wirtschaft/article189279961/BMW-und-Daimler-Dieser-Deal-stellt-das-Autoland-auf-den-Kopf.html
https://www.press.bmwgroup.com/deutschland/article/detail/T0292204DE/bmw-group-und-daimler-ag-investieren-mehr-als-eine-milliarde-euro-in-gemeinsamen-mobilitaetsdienstleister
