Car hail­ing gears up for bit­ter fight

Bank pumps 5b yuan into Dingding Yueche as bat­tle for sec­tor hots up with Didi and Uber

China Daily (USA) - - BUSINESS - By FAN­FEIFEI fan­feifei@chi­nadaily.com.cn By ZHU WENQIAN zhuwen­qian@chi­nadaily.com.cn

China Ever­bright Bank’s fi­nan­cial leasing arm will in­vest 5 bil­lion yuan ($743 mil­lion) in Pang Da Au­to­mo­bile Trade Co Ltd’s (PD Group) car-hail­ing app Dingding Yueche, fur­ther in­ten­si­fy­ing com­pe­ti­tion in the in­dus­try after reg­u­la­tors in ma­jorChi­nese cities rolled out strict re­quire­ments for car-hail­ing ser­vices.

The two sides signed a strate­gic co­op­er­a­tion agree­ment in Bei­jing on Thurs­day. The in­vest­ment will sup­port Dingding Yueche’s ex­pan­sion in the car-hail­ing mar­ket, en­hance car-hail­ing ef­fi­ciency, re­duce ve­hi­cle costs for driv­ers and guar­an­tee driv­ers’ in­come.

Dingding Yueche has of­fered mul­ti­ple app-based trans­porta­tion op­tions, in­clud­ing taxi hail­ing, pri­vate car-hail­ing, ride-shar­ing, chauf­feur­ing and buses in many cities across the coun­try.

New play­ers in the sec­tor are ramp­ing up the com­pe­ti­tion in the na­tion’s fast­grow­ing ride-hail­ing sec­tor. Founded last Septem­ber, Shouqi Limou­sine and Chauf­feur af­fil­i­ated to Bei­jing Shou Qi Group, is qui­etly ris­ing and get­ting ready to take on Didi Chux­ing and Uber.

The car-hail­ing com­pany has launched op­er­a­tions in 30 ma­jor cities, owns more than 8,000 ve­hi­cles and takes more than 40,000 or­ders each day.

Sev­eral days ago, trans­port au­thor­i­ties in Bei­jing and Shang­hai is­sued draft lo­cal reg­u­la­tions on driv­ers and pri­vate ve­hi­cles, re­quir­ing that driv­ers have a lo­cal hukou (house­hold reg­is­tra­tion), which means peo­ple from other cities are un­able to pro­vide ser­vices in those cities.

Shouqi Limou­sine and Chauf­feur said all of its driv­ers were pre­vi­ously taxi-driv­ers from Shou Qi Group and had a lo­cal hukou. An­a­lysts said these ve­hi­cles and driv­ers seem to con­form with the newreg­u­la­tions.

Wang Chenxi, a trans­port an­a­lyst for in­ter­net con­sul­tancy Analysys said: “Dingding Yueche and Shouqi Limou­sine and Chauf­feur are fo­cused on chauf­feur­ing ser­vices, and the rapid growth of their busi­ness will in­ten­sify com­pe­ti­tion in this sec­tor,” adding it will in turn make their ri­vals ac­cel­er­ate the pace of their in­no­va­tion. Meng Jing con­trib­uted to this story

Euro­pean air­craft man­u­fac­turer Air­bus Group SE said it ex­pects to de­liver its first A350 to Chi­nese air­lines in the sec­ond half of next year and is bullish about the coun­try’s de­mand for wide­body air­craft, fu­eled by fast-grow­ing long­haul in­ter­na­tional routes mar­kets.

An A350 test air­craft will start its China tour in Novem­ber, with the de­but in Haikou, Hainan prov­ince, then it will take static and fly­ing dis­plays at Zhuhai Air­show, be­fore vis­it­ing Bei­jing, Shang­hai, Guangzhou and Chengdu, the com­pany said on Thurs­day.

Cur­rently, more than 40 A350 air­craft are in op­er­a­tion in­ter­na­tion­ally. China East­ern Air­lines or­dered 20 A350-900 air­craft in April. Air China or­dered 10 A350-900s ear­lier. In Septem­ber, Sichuan Air­lines signed a let­ter of in­tent for leasing four A350-900s.

China’s long-haul mar­ket has been surg­ing as the num­ber of di­rect in­ter­na­tional flights to and from China sky­rock­eted 150 per­cent in the last five years, mainly fu­eled by the growth of the mid­dle class and re­laxed visa poli­cies.

From 2010 to 2015, the num­ber of Chi­nese who trav­eled abroad jumped by an an­nual av­er­age of 16 per­cent, and 200 mil­lion in­di­vid­ual Chi­nese are ex­pected to travel over­seas by 2020, ac­cord­ing to the Na­tional Bureau of Sta­tis­tics.

In the first half of 2016, Chi­nese air­lines trans­ported 25.2 mil­lion peo­ple on in­ter­na­tional routes, jump­ing 27 per­cent year-on-year, ac­cord­ing to the Civil Avi­a­tion Ad­min­is­tra­tion of China

“China’s boom­ing growth of in­ter­na­tional flights, es­pe­cially those long-haul routes, re­quires wide body air­craft to ex­e­cute the fly­ing. A350is suit­able for those air­lines with com­plete in­ter­na­tional flights net­works,” said Eric Chen, Air­bus China Pres­i­dent and CEO.

Air­bus said it ex­pected that be­tween 2014 and 2034, the air traf­fic in China will have an an­nual growth rate of 6.9 per­cent, mainly from air flow of do­mes­tic flights in China, and flights be­tween China and the US, and China and West­ern Europe. Glob­ally, the av­er­age growth rate will reach 4.6 per­cent.

Boe­ing Co said last month that it ex­pects China’s wide­body fleet to triple in size over the next two decades.

“There is a rapid growth of in­ter­na­tional travel vol­ume in China, with the traf­fic of some routes in­creased ex­po­nen­tially. The trend will con­tinue, and the high amount of in­ter­na­tional travel is likely to drive

REUTERS

Vis­i­tors walk past an Air­bus A350 on dis­play at the Sin­ga­pore Air­show.

Eric Chen, Air­bus China Pres­i­dent

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