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 Qichacha.com.
- 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.