Volkswagen on Tuesday became the latest German auto giant to get rid of its car-sharing business, after it too struggled to make a profit in the emerging sector.

Volkswagen said it was selling its WeShare unit, which offers around 2,000 all-electric cars for hire in Hamburg and Berlin, to German company Miles Mobility.

No financial details were disclosed.

"We made it very clear in 2020 that we didn't think the (service) would be profitable for us," Christian Dahlheim, head of VW group sales, said in a call with reporters.

Rivals Mercedes-Benz and BMW agreed last May to sell their Share Now joint venture to US-European carmaker Stellantis, after they experienced lower-than-expected interest in car-sharing services.

As part of the deal with VW, Miles Mobility will order more than 10,000 all-electric vehicles from VW's stable of brands, including Audi and Seat cars.

Miles Mobility already runs a fleet of 9,000 vehicles across eight German cities, including Bonn, Cologne and Munich, and two cities in Belgium.

"With a strong partner to operate the fleet and with vehicles from various Volkswagen group brands, car sharing will become available to an even broader spectrum of customers," Dahlheim said in a statement.

German automotive expert Ferdinand Dudenhoeffer said VW's decision to sell its WeShare service showed that car-sharing remained a "niche market" that carried "considerable risks of losses".

Miles Mobility for its part said it aimed "to become the leading car-sharing platform in Europe" and welcomed the addition of VW's zero-emission cars to its fleet.

"The electrification of our fleet is a cornerstone of the Miles strategy towards sustainable urban transport," it added.