VW prepares for decline in car ownership, invests in mobility services

By Bruce Brown December 6, 2016

Volkswagen is continuing to morph its future business model. Moving beyond the diesel fiasco, especially in the U.S., where it has permanently eschewed diesel-powered cars, VW has already made a commitment to all-electric cars going forward. On Monday Volkswagen announced a new digital business division called MOIA that will focus on people who would prefer to pay for mobility services instead of owning a car, according to Reuters.

Earlier this year, VW invested $300 million in Gett’s ridesharing business. Next year, MOIA will announce on-demand shuttle services. Ridesharing is one example of ownership alternatives the new division will explore. “Mid- and long-term, MOIA will create the kinds of services that will meet the needs of urban citizens,” Ole Harms, MOIA’s new head.

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VW doesn’t have a carsharing business now, but that model has been tested and is being expanded by both Daimler-Benz and BMW. It’s reasonable to expect that Volkswagen will also launch such a service in its bid to service wide-ranging customer mobility needs.

“Even though not everyone will still own a car in the future, MOIA can help make everyone a customer of our company in some way or another,” said Volkswagen Group CEO Matthias Mueller.

Last month, Mueller said the company has had talks with Uber but wants to have a greater role than as a source of vehicles. By 2025, with the diesel scandal behind the company, Volkswagen’s plan is to earn a large part of its revenue from electric vehicles, ridesharing, and autonomous vehicles.

After starting with a staff of 50, Harms said MOIA, funded initially with more than 100 million euros for capital investments, will grow to 200 employees in 2017. The initial MOIA investments will be in early-stage mobility companies, according to Harms, as it seeks profitable business models at the outset.

With the announcement of MOIA Volkswagen, Europe’s largest carmaker joins General Motors and Toyota, who have also invested in mobility services companies as a business strategy for the future.

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