Toyota takes aim at Chinese mobility market with new partnership

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Toyota showcased its first plug-in hybrid SUV RAV4 in Shanghai Auto Show on April, 2019. (Image credit: Toyota)
Toyota showcased its first plug-in hybrid RAV4 SUV at the Shanghai Auto Show in April 2019. (Image credit: Toyota)

Japanese automaker Toyota has started operating a mobility company for car rental and ride services in the southern island province of Hainan in order to capture a piece of the massive Chinese ride-sharing market.

Why it matters: The move comes shortly after Toyota’s $600 million July investment in Chinese ride-hailing unicorn Didi Chuxing to offer car leasing, fleet management, and other vehicle-related services.

  • Meanwhile, Didi expanded beyond ride-hailing on the island, forming a company to lease and sell electric vehicles (EVs) with two state-owned firms. Around 50,000 EV charging piles or more than a quarter of those in China are available to users on the platform.

Details: Toyota said it will first offer a range of mobility services including car leasing and higher-end ride-hailing services on the island along with two of its local dealers, Zhongsheng Group and Hainan Jiahua Group, according to an announcement released Friday.

  • The Japanese automaker and the two companies formed a joint venture with registered capital of RMB 10 million ($1.42 million) on Friday in Hainan with Toyota Financial Services China the majority shareholder, according to corporate intelligence platform
  • A fleet of new Camry, Avalon, and Highlander models will be available for short-term car rental, while Alphard and Lexus cars will be used for high-end ride services.
  • Toyota’s local dealership will provide full-service staff including drivers as well as regular maintenance services.
  • Tourists can rent cars using the company’s WeChat account, online travel platforms, or partner hotels, according to the statement.
  • Toyota is shifting into mobility services to meet growing demand from Chinese mid- and higher-end users, the company added.

Context: Toyota is not the only automaker looking to transform itself into a key player in next-generation mobility.

  • China’s largest automaker SAIC launched Evcard, an electric vehicle rental service with a local partner in 2013. The company said its fleet of 50,000 electric vehicles has serviced more than 6.5 million users in over 30 domestic cities as of November.
  • Dubbed the “Hawaii of China,” Hainan welcomed more than 76 million tourists last year, and Beijing expects that number will exceed 100 million by the end of next year.
  • Hainan has also emerged as an important region for EV companies as it pushes aggressively into the market, aiming to fully phase out all gasoline-powered vehicles by 2030.
  • WM Motor in April 2018 also formed a partnership with a local, state-owned Hainan public transport company with plans to launch a fleet of 1,500 EVs by end-2021. It said in June that it had a fleet of 1,000 cars up and running in the province.

Hainan to massively expand electric vehicle charging infrastructure