March 1, 2018 / 10:31 AM / 7 months ago

UPDATE 2-En route to alliance, Daimler buys Europcar out of car-sharing venture

* Buys Europcar's 25 pct stake in Car2Go for 70 mln euros

* Move is seen as step toward car-sharing alliance with BMW

* Daimler says mobility services ops poised to expand (Adds analyst comment, context)

FRANKFURT, March 1 (Reuters) - German carmaker Daimler will buy Europcar's 25 percent stake in car-sharing service Car2Go for 70 million euros ($85 million), the two companies said on Thursday, paving the way for Mercedes and BMW to develop driverless taxis.

Mercedes-owner Daimler and BMW, Germany's two biggest luxury carmakers, are already in discussions to combine their car-sharing services Car2Go and DriveNow, a person familiar with the talks told Reuters earlier this year.

They are preparing for a new era in mobility services where self-driving cars could allow them to expand into a business segment which is currently dominated by Uber in the United States and Didi Chuxing in China.

BMW's DriveNow and Daimler's Car2Go have a strong presence in European cities, but the introduction of self-driving cars could spur a big expansion into autonomous taxi services, the person familiar with the talks said.

Consultancy PwC has said that conventional carmakers will become marginalised by cash-rich technology firms if they do not develop pay-per-mile mobility services. Their share of global auto industry profits may fall from 85 percent to less than 50 percent by 2030.

"The only companies that can survive in the long term are either those that prevail as a clear innovation leader on the product side, or those that recognise that mobility is no longer a product, but rather a service," said Christoph Stuermer, Global Lead Analyst at PwC Autofacts.

Daimler and BMW want to build a joint business which includes car-sharing, ride-hailing, electric vehicle charging, and digital parking services, consolidating their strong footprint in Europe.

BMW in January bought out its partner Sixt from DriveNow, which was seen as one step on the road to an alliance.

The two companies have not confirmed the plans, but Daimler said last month it was open to considering a broader alliance and a partial listing of its mobility services operations, which also includes its taxi-hailing and transportation services apps Mytaxi and Moovel.

It said on Thursday its mobility services business was poised to expand its portfolio and its customer base, using the expertise gained from Car2Go to work toward an offering with self-driving cars.

"The goal is to develop the required expertise and resources so that we are a leader in the future business with self-driving cars," it said.

China's Geely took a 9.7 percent stake in Daimler last week, citing a desire to cooperate on technology.

$1 = 0.8205 euros Reporting by Maria Sheahan and Edward Taylor Editing by Edwina Gibbs/Keith Weir

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