VW shifts priorities to ride hailing and autonomous driving

VOLKSWAGEN (VW), which is shifting priorities in the wake of the diesel scandal and stepping up competition against the likes of Uber Technologies, plans to launch a business focused on ride hailing, autonomous driving and electric cars in two EU cities next year.

The carmaker’s new mobility brand, Moia, would offer a glimpse of its first vehicle next summer and would eventually produce battery-powered, autonomous cars along with new forms of transportation including public shuttles, said Ole Harms, the VW unit’s head.

The German carmaker was open to selling a minority stake in the business, which was expected to generate revenue of “a couple of billion” euros in a few years, he said.

“We’re a startup with VW group’s resources and we have a global aspiration,” said Harms ahead of the new unit’s official unveiling yesterday at the Tech Crunch Disrupt conference.

Moia, which will have 200 employees by the end of next year, will based in Berlin and could expand to the US, China or Latin America later.

VW, recovering from the emissions-cheating scandal, has been cutting costs to free up funds to develop the electric cars, self-driving technologies and mobility apps that are dominating the industry.

Innovation

The German carmaker has been late to innovate, taking its first step to expand beyond its traditional business of manufacturing and selling cars in May by investing $300million (R4.2 billion) in ride-hailing provider Gett.

By contrast, Daimler founded carsharing service Car2Go in 2008 and has since added public transit and cab-hailing apps.

Making Moia the company’s 13th brand in a lineup that includes Audi and Porsche underscores VW’s strategic revamp to move beyond the scandal and prepare for a tectonic industry shift towards electric cars with new digital features that allow piloted driving or finding free parking spaces via apps.

Carmakers across the globe have been stepping up efforts to expand digital offerings as Silicon Valley giants such as Apple and Google are plotting inroads in the vehicle industry and manufacturers fight back to avoid being degraded to mere hardware suppliers.

While sales of electric cars remain weak as consumers fret about their high pricing, limited battery range and lack of charging stations, carmakers including VW are investing in the segment to meet evertighter regulations and keep up with new rivals including Tesla Motors.