In my opinion, Sixt is currently a perfect investment that will bear fruit in the long term, but as a German mid-cap it is currently still flying under the radar of major American investors.
Around a third of the European population lives in large cities. Urban mobility is changing in such a way that many city dwellers no longer own a car, but do not want to do without the advantages of a car in some situations, despite cycling and public transport.
You can see it every day on the streets - at least here in Munich: there is a MILES, ShareNow or Sixt Share vehicle on every corner. In recent months, Sixt has significantly increased its fleet and you now see almost more SIXTs than MILES. At the latest since Sixt cars can no longer be booked via the Miles app (and vice versa), there is now real competition and SIXT has the much better cards.
As a start-up, MILES is dependent on investor funds and, unlike a car rental company with decades of tradition and large cash reserves, has significantly worse conditions when purchasing vehicles, no well-established maintenance processes, no experience on the used car market and significantly less willingness to take risks.
In addition, Sixt can deploy its fleet much more flexibly. Depending on the situation, cars from Car-Sharing can also be quickly transferred to the classic rental business or to business customers, as Sixt is only developing Car-Sharing as a new line of business, while the existing business has long been tried and tested and runs like Swiss clockwork.
The fact that a large proportion of the shares are family-owned and that this family has often made forward-looking, intelligent decisions in recent decades also speaks in the company's favor. Innovations have not been overlooked. The spirit of the times was recognized early on: for example, Sixt tapped into the Internet back in the 90s.
One last, subjective point, which comes from the customer's point of view and should therefore not be underestimated: SIXT in Munich is currently cheaper than MILES (billing per minute vs. per kilometer), provided you are not stuck in a traffic jam. However, Sixt cars are usually in much better condition. A reversing camera is actually included in all of them. MILES is too stingy for such (comparatively inexpensive) special equipment; I have never experienced reversing cameras in the S and M segments. It seems to be just a small detail, but for me personally it makes parking a lot easier, and if I have to pay more for not having it, why should I? Competitor FreeNow, on the other hand, only offers Stellantis cars, so also operates far from what you could call premium. So Sixt has the better prices in spite of premium cars - and probably also has the better margins.
In a nutshell: In the long term, I see only one winner in car sharing in Germany, and that winner is Sixt. The car sharing market as a whole is likely to grow strongly in the coming years, even outside Germany. Sixt has long been active in all European countries with its classic car rental business, so it will be much easier for Sixt to expand car sharing than Miles; after all, the entire infrastructure for fleet maintenance, the development of local laws, etc. does not have to be built from scratch.
And even if the car-sharing bet should not work out for some reason: Sixt has an extremely solid foundation both in the B2B fleet business and as a traditional car rental company.
According to Warren Buffet, you should only invest in a business that you understand. And if I use a product myself regularly and am happy with it, and if it is a fairly new product that can appeal to significantly more people than before over the years, then I see it as a real gem, especially when it is still valued so low.
This is not an investment for short-term speculation, but I am firmly convinced that Sixt will provide a lot of pleasure in the coming years.
Do you think I'm looking at this all too much through rose-colored glasses, or do you agree with my assessment?
Stellantis, because it's mentioned in the text: $STLAM (+0.27%)
