GM takes stake in China car-shar­ing

One of Detroit’s Big Three mak­ing bid to ac­cess China mar­ket with lo­cal part­ner

China Daily (USA) - - ACROSS AMERICAS - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­lyusa. com

It is GM’s first in­vest­ment in a startup in China re­lated to ur­ban mo­bil­ity.” GM com­pany spokesman

Gen­eral Mo­tors’ mo­ti­va­tion for in­vest­ing in a Chi­nese car­shar­ing app de­vel­oper goes be­yond just ac­quir­ing tech­nol­ogy, ac­cord­ing to one ex­pert.

GM on Wed­nes­day de­clined to re­veal the size of its in­vest­ment in Yi Wei Xing (Beijing) Tech­nol­ogy Co Ltd, which de­vel­oped Feezu, a car-rental and car-shar­ing app that merges hard­ware and soft­ware and en­ables users to rent ve­hi­cles by the minute, hour or day.

“GM would have no rea­son to in­vest in Yi Wei Xing for ac­cess to tech­nol­ogy or tal­ent,” Eric Den­nis of the Cen­ter for Au­to­mo­tive Re­search in Ann Ar­bor, Michi­gan, said in an email. He said the tech­nol­ogy sup­port­ing car-shar­ing and ride-shar­ing ser­vices is rather sim­ple.

“Most likely, this in­vest­ment is for ac­cess to China’s car­shar­ing mar­ket. En­ter­ing the mar­ket with­out an es­tab­lished lo­cal part­ner would be very dif­fi­cult,” he said.

“GM al­ready sells a fair amount of ve­hi­cles in China (and) get­ting a toe­hold in the mo­bil­ity sec­tor is prob­a­bly a smart move,” Den­nis said. “(It’s) likely GM is look­ing to find a rev­enue stream from mo­bil­ity ser­vices in China, as well as a part­ner who will have a large de­mand for fleet ve­hi­cle sales.”

“It is GM’s first in­vest­ment in a startup in China re­lated to ur­ban mo­bil­ity,” a com­pany spokes­woman told Reuters. “This co­op­er­a­tion is very im­por­tant to our com­pany to ex­plore the ride-shar­ing mar­ket in China.”

“Ev­ery mar­ket has its unique re­quire­ments for car­shar­ing ser­vices,” Ju­lia Steyn, GM vice-pres­i­dent of ur­ban mo­bil­ity pro­grams, said in a state­ment. “Yi Wei Xing has solid tech­nolo­gies and in­no­va­tions that will help us ex­plore more ef­fi­cient and per­son­al­ized mo­bil­ity so­lu­tions for con­sumers in China.”

As ride-hail­ing ser­vices like Uber in the US and Didi Chux­ing in China have grown, GM and other ma­jor au­tomak­ers have been quick to part­ner with com­pa­nies and par­tic­i­pate in this fast­grow­ing seg­ment of what is re­ferred to as the “shar­ing econ­omy”.

Ear­lier this year, GM in­vested $500 mil­lion in the ride-hail­ing com­pany Lyft and also launched Maven, which pro­vides short-term car rentals.

“This is an im­por­tant step for GM to ex­plore and en­gage with new mo­bil­ity mar­kets in China, in par­tic­u­lar with a com­pany who al­ready has a pres­ence in that mar­ket,” Jeremy Carl­son, prin­ci­pal au­to­mo­tive an­a­lyst for IHS Markit, said in an email.

“GM has been ag­gres­sively build­ing up the Maven brand, and the in­vest­ment in Yi Wei Xing may be a sig­nal that the au­tomaker is likely look­ing to bring its Maven brand to China, a very im­por­tant mar­ket both for new mo­bil­ity so­lu­tions and for the com­pany over­all,” he said.

“Only time will tell if this move is sig­nif­i­cant, but it shows that GM is pay­ing close at­ten­tion to the Chi­nese mar­ket,” Den­nis said.

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