Zipcar Acquires Leading Austrain Car Sharing Service, CarSharing.at
Zipcar (NYSE:ZIP) has further expanded its European footprint with the acquisition of Austria-based Denzel Mobility car sharing service, operating as CarSharing.at. The acquisition marks Zipcar’s entry into its third major European market, following its purchase of a majority interest in Barcelona-based Avancar in February 2012 and the completion of its integration of Streetcar operations in the U.K. last year. Denzel Mobility is the largest car sharing service in Austria and serves 10K members across Vienna, Innsbruck and Graz with a fleet of nearly 200 vehicles. Zipcar currently serves 700K members with a fleet of over 9K vehicles in North America and Europe.
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European Car Sharing Market
According to research by Frost & Sullivan, the European car sharing market could surpass 5.5 million members and 3 billion euros over this decade. Most of the major European cities have high population density, good public transportation and high cost of ownership/parking along with a highly fragmented car-sharing industry. Each of these factors make Europe an attractive market for Zipcar. The fragmented nature of the European car-sharing industry also provides Zipcar opportunities to pursue the dominant players in different markets for future expansion and scale them up, rather than start from scratch. Apart from its technological expertise, Zipcar also scores over its fragmented European competitors through the promise of building a pan-European network as several users prefer single membership for short-term car rental when they travel to other cities.
We estimate that the average membership of Zipcar Europe increased from 4K in 2008 to 100K in 2011 with the Streetcar acquisition. Both Avancar and Denzel Mobility are likely to have added 10K members each to Zipcar’s membership base, in markets that have much higher growth potential. Zipcar plans to further scale these markets with its technology and network. We expect Zipcar could expand its European membership up to 300K over the next decade through a combination of organic growth, acquisitions, joint ventures, franchise opportunities and other relationships.
Despite some skepticism over the wisdom of increasing European exposure amid uncertain macroeconomic times, we believe cautious consumer spending might, in fact, draw people toward car-sharing as they look for ways to save money. People delaying car purchases during tough times might also get inclined toward availing car sharing.
We have a $18 Trefis price estimate for Zipcar.
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