Photographer: Krisztian Bocsi/Bloomberg

Audi to Buy Luxury-Car Rental App in Silicon Valley Challenge

  • Silvercar offers metallic A4 sedans in Brooklyn, South Beach
  • German automaker’s acquisition follows on 2015 investment

Volkswagen AG’s luxury brand Audi plans to buy a U.S. startup that rents out silver A4s, in a bid to boost digital revenue as the industry shifts away from outright car ownership.

Silvercar Inc., whose app allows users to book the compact sedans at 15 locations across the U.S., including upscale hotels in Brooklyn and South Beach, will help the German manufacturer expand its technology offerings in the country, according to a statement on Thursday. Audi will seek to grow the partnership beyond Silvercar’s core business.

Automakers are lifting their spending on technologies such as ride-hailing, car-sharing and in-vehicle apps to fend off competition from Silicon Valley and woo a new generation of customers. Volkswagen, catching up with German rivals Daimler AG and BMW AG, last year acquired a stake in taxi-ordering app Gett Inc. and launched the Berlin-based Moia mobility division.

Audi and its parent Volkswagen have to balance that spending against huge expenses from the diesel cheating scandal, which so far has cost the manufacturer 22.6 billion euros ($24 billion).

Silvercar, which initially focused on airports in cities such as Dallas and Los Angeles, now also has sites at the McCarren Hotel in Brooklyn and the Mondrian in South Beach near Miami.

The Austin, Texas-based company was founded five years ago and has 150 employees. Audi made a minority investment in 2015 and expects the acquisition of the remaining stake to close in the first half of this year.

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