Daimler has confirmed plans to discontinue its car sharing service in China by the end of the month, according to local reports.
The automaker is understood to have already suspended the service which allowed motorists to pay by the hour for the use of its fleet of two seat Smart cars in major cities across China.
Daimler first introduced the rental service in 2016 in Chongqing and later expanded it to other major cities including Shenzhen and Chengdu.
The automaker cited changes in China's market environment and user needs for the decision to withdraw the service.
Local analysts believe the car sharing service had high operating costs and the resulting high rental fees were the main reason for its lack of success.
In Chongqing alone, Daimler was running a fleet of 800 Smart cars but struggled against competing services with more diversified car fleets and cheaper prices.
Local research found there were around 1,600 companies offering similar rental services in China with a combined fleet estimated at around 130,000 vehicles – mostly battery powered.