German auto giant Daimler is launching a ride-hailing service in China in partnership with Zhejiang-based automaker Geely, aiming to join an already crowded market dominated by Didi Chuxing.
Why it matters: Car manufacturers in China hurt by a slowing auto market are looking to shift into the country’s mobility sector to shore up growth.
- Chinese OEMs are piling into the market. T3, a ride-hailing platform co-developed by FAW, Dongfeng Motor, and Chang’an last month announced it had surpassed 50,000 daily average rides in the eastern city of Nanjing.
- SAIC’s ride-hailing platform Xiangdao in late August revealed daily order volume of 30,000 in its home city of Shanghai nine months after launching its service.
- Didi Chuxing remains dominant, offering more than 27 million rides on average each day.
Details: Geely and Daimler will roll out a premium ride-hailing service called Staride starting in Hangzhou, capital of eastern Zhejiang province, by year-end, said Geely chairman Li Shufu, according to the company’s official WeChat account.
- The two automakers in May set up a 50:50 joint venture (JV) with registered capital of RMB 1.7 billion ($242 million) after reaching an agreement to enhance their “strong position in the mobility market” in late 2018.
- Initially, the platform will feature a proprietary fleet with all new Mercedes-Benz E, V, and S Class vehicles, and will later expand to include electric Geely cars, according to a Financial Times report.
- A Staride app is available on Chinese Android app stores, but is currently being tested internally, according to a notification on the app.
- The size of the fleet and its expansion plan is unknown, but a person close to the JV told TechNode that Geely will be responsible for vehicle scheduling and fleet management, and a former Didi executive was recently hired as CEO of the company.
- A Geely spokesman declined to comment when contacted by TechNode on Monday.
Context: Chinese automakers are looking for ways to tap the ride-hailing market, which is seen as an increasingly important business for traditional automakers.
- Geely was an early mover into ride-hailing with the launch of its Caocao Chuxing service in the eastern city of Ningbo in late 2015. The service is available to users from more than 50 Chinese cities, and averages 1.65 million rides each day, Li said.
- Revenue for China’s largest private automaker declined 11% year on year to RMB 47.5 billion in the first half of the year, while its net profits plunged 40% year on year to RMB 4.01 billion.