In the fast-paced world of high-end cars, where style and innovation come together, Mercedes-Benz Group AG recently faced some tough financial conditions. The legendary automaker, whose name is linked to prestige and performance, reported a drop in its fourth-quarter earnings, indicating a need to reevaluate in a global market that is changing. The road ahead for Mercedes-Benz is full of both risks and chances. The company’s recent financial performance and strategic responses show how big companies are dealing with these changes. The company is having trouble with its finances right now, but its efforts to involve shareholders and put money into growth areas point to a bigger plan to get through the rough patches.
Luxury Automakers Exit Car-Sharing Business
Mercedes-Benz and BMW have agreed to sell Stellantis their car-sharing business ShareNow. This ends a 13-year loss-making venture that was once called a “key cornerstone” of the companies’ strategies. The three groups declined to disclose how much the deal was worth. According to two people with knowledge of the situation, the amount was more than €100 million, but a lot less than the €250 million that one analyst thought it would be. ShareNow lost €123 million in 2020, when the pandemic caused a big drop in bookings, and about €70 million last year. It had 3.4 million customers in 16 European cities as of last month. Free2Move, the Stellantis business that is buying the unit, had about 2 million customers in five US cities and two European cities At the same time. The latest sign that German luxury automakers are giving up on expensive attempts to gain market share is the sale of the joint venture. Instead, they are focusing on making high-end models for wealthy customers.
Mercedes-Benz Shifts Focus from ShareNow to Luxury Market
In a statement announcing the sale, Gero Gotzenberger, director of strategy and investments at Mercedes-Benz Mobility, said that the company would put more effort into its core business in the luxury market. ShareNow had already shrunk before the pandemic. In late 2019, the company left the American and British markets, saying that the service had “low adoption rates” in some cities. The move came just a few months after Daimler, the owner of Mercedes, and BMW promised to spend €1bn on a set of apps for parking, charging, sharing cars, and calling for rides. They had to write down the value of their joint ventures over the past few years as well. But Stellantis said on Tuesday that it was sure a new plan would help it stop losses at ShareNow.
“We make money at Free2Move because we handle different types of business,” Brigitte Courtehoux, CEO of the division, said.
