VW wants to step into Europcar again
Volkswagen Group is thinking of buying the Eurazeo shares (29,9%) in Europcar, the biggest shareholder of the French rental company.
Fourteen years ago, VW sold its interests in Europcar; now it wants to get in again. Just now, when Europcar is suffering heavily from the corona crisis. Bad timing or seizing an opportunity?
Europcar, Europe’s leading rental car company, is in bad shape due to the corona crisis. The company is very present at the airports, and they have been ‘dead’ for three months.
In the first quarter of the year, it saw a net loss of €105 million; in May, it had to refinance for a total of €307 million, 220 million of them guaranteed at 90% by the French state.
And the crisis is not over yet. The renting business is starting up very slowly. On the other side of the Atlantic, 100-year-old Hertz, for example, is struggling with bankruptcy.
That’s why the move of VW at this moment is a little odd, says financial analyst Delphine Chauvin (Oddo BHF). “Volkswagen could have other priorities at the moment,” she utters.
Thinking about the future
VW, however, is thinking ahead. In Wolfsburg, they are convinced that the world of car-sharing is going to develop rapidly.
Europcar already has such a service, called Ubeeqo, active in eight larger cities like Berlin, Paris, Madrid… It proposes electric, hybrid, and ICE cars.
Last year, Ubeeqo lost €30 million (on a turnover of 50 million). “After the corona crisis, this activity will grow, but we have to operate it differently, more integrated,” explains Europcar.
Volkswagen is already present in this growing market with WeShare (only in Berlin), proposing solely electric vehicles.
But VW thinks further. After dieselgate, it has launched itself heavily into electrification. It’s not that easy to sell EVs yet.
When VW becomes the major shareholder in Europcar again, it can raise its share of brands in the company (now at one-third) and sell many EVs directly.
At the moment, Europcar, Eurazeo, and Volkswagen refuse to give further details. A reliable source has said to the French press agency AFP “that discussions are taking place, but there’s no firm offer yet”.
In a press release, Europcar has confirmed it is thinking of changing its capital structure.”It is possible that we keep contacts with all interested partners.”
Earlier on, the investment fund Eurazeo had already communicated that it was thinking of selling the whole or part of its shares into Europcar. There’s a possibility that it stays a (smaller) shareholder.