Zipcar Buys Austrian Car Share Network

Zipcar has revealed an agreement to buy Austrian car sharing network Denzel Mobility CarSharing GmbH, a leading service by revenue and members in its nation’s market. This means that Zipcar now has a presence in three European countries, and the company continues to increase its reach to new cities outside North America. Terms for the sale haven’t been disclosed. However, Zipcar says the transaction isn’t expected to have a material impact on its full-year results.

Zipcar, which owns the biggest car club in London and just completed a major interest purchase in Barcelona-based car share firm Catalunya Carsharing S.A., says that this is just the tip of the iceberg in relation to the potential of a car sharing market that may reach US$10 billion North America, Asia and Europe. The company will infuse its technology in both Austrian and Spanish markets before it relaunches the businesses under the Zipcar name. In Barcelona, the company plans to co-brand with Avancar this autumn, while its brand name will be rolled out early next year in Austria. Both businesses have charged users annual membership fees already, which is something Zipcar also requires in the US.

Due to Europe’s very high population density, it’s an appealing market for Zipcar. On top of this, the region has high car ownership costs and extensive public transport options. Although some concerns have arisen about expanding in a region with labour in a debt crisis, Zipcar says car sharing memberships can actually grow during recessions. This is because the service saves households money.

The company allows members to reserve vehicles by the hour or day, and for up to several days. It focuses on major metropolitan areas, like Boston, New York and San Francisco; while it also has a presence at over 250 college campuses. Its expansion in Europe is in line with its North American strategy, where it has targeted densely populated cities where there are more middle class citizens.

Zipcar chairman and chief executive Scott Griffith says that the acquisition of CarSharing.at gives them access to an established car sharing businesses in a market with the potential for high growth. They believe they can scale the business with their technology, extensive network and car sharing expertise. They can continue executing their plan to growth the car sharing market and build a leading network across Europe.

Griffith continued that there’s a strategy in Europe that’s, overall, very deliberate and similar to what they’ve accomplished in North America. Zipcar has the biggest market share in the major cities it serves in the US, and the network has become a leader in the market. At times, it directly competes with start-up entities and bigger rivals. The company has created this leadership by heavily investing in technology like its reservation service on Facebook and mobile apps, as well as by developing loyalty.

Griffith added that the company wants to move into the top eight to ten cities in Europe that have the most potential for a car sharing market. The business evaluates several factors before moving into a new market – such as parking costs, the size of the its population, public-transit usage, and the number of residents who live in the city. He described this purchase strategy as “starting on second base” – taking over a start-up that has some momentum with memberships.

Zipcar Europe president Malte Feller says Vienna is a sophisticated city with good public transport, eco-conscious consumers and businesses, and a government committed to sustainability. As a worldwide leader, they strive to strengthen the CarSharing.at experience and technological offerings to make car sharing a mainstream mobility option in the country.