Used cars

Mercedes-maker Daimler joins VW’s HeyCar venture

Mercedes Benz Autohaus
Only one careful owner. Source: DPA

Daimler, the maker of Mercedes-Benz cars and trucks, plans to take a 20 percent stake in VW’s used-car subsidiary HeyCar, sources at the companies told Handelsblatt.

VW set up the unit last October with the ambitious goal of turning it into Germany’s top online platform for premium second-hand cars. The carmaker has been talking to other automakers in recent months to get partners on board for the unit, which already trades in a range of brands, not just VW.

The talks with Daimler are advanced but details have yet to be finalized, the sources said. VW and Daimler declined to comment.

HeyCar is part of a drive by automakers to branch out beyond their established businesses. BMW, Daimler, VW and other companies have launched start-ups to develop new mobility plans to counter incursions by new competitors from Silicon Valley such as Google and Uber.

Fast and furious

HeyCar has a long way to go. It has 300,000 cars on offer, which makes it a dwarf compared with used car sites such as mobile.de, Autoscout24, part of Frankfurt-listed Scout24, or Berlin-based startup Auto1, which is backed by Japan’s Softbank.

“In future, customers won’t visit dealerships as much and will spend a lot more time on digital platforms,” said Stefan Bratzel, director of the Center of Automotive Management (CAM) at FHDW University in Bergisch Gladbach. “The automakers must gain a foothold here. In the end it’s all about who has the contact with clients.”

Until now, VW, Daimler and BMW have known surprisingly little about the people who buy their cars, he added.

The German used car market generated more than €82 billion ($95 billion) in revenue last year. That was just 20 percent below new car sales at €104 billion. The European used car market is worth more than €350 billion. “There’s a lot of potential in the platforms the automakers are developing,” said Mr. Bratzel.

Opening up new, less capital-intensive income streams is becoming increasingly important for automakers because they’re weighed down by surging development costs in the changeover to electric and connected cars.

The pressures have made manufacturers more willing to cooperate with each other. Daimler and BMW this year merged their carsharing units Car2go and DriveNow, for example. And VW-subsidiary Audi, Daimler and BMW together own a majority stake in digital mapping service HERE.

Martin Murphy covers the steel, car and defense industries for Handelsblatt. Franz Hubik is an automotive reporter for Handelsblatt. To contact the authors: murphy@handelsblatt.com, hubik@handelsblatt.com

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!