Geely, Daim­ler in ride hail­ing JV

China Daily (Canada) - - VIEWS - By OUYANG SHIJIA ouyang­shi­jia@ chi­nadaily.com.cn

Chi­nese au­tomaker Zhe­jiang Geely Hold­ing Group an­nounced on Wednes­day it will set up a joint ven­ture with Ger­man man­u­fac­turer Daim­ler AG to of­fer ride hail­ing ser­vices in the world’s largest auto mar­ket.

Daim­ler Mo­bil­ity Ser­vices and Geely’s new busi­ness en­tity Geely Group Co will es­tab­lish a 50-50 joint ven­ture head­quar­tered in Hangzhou, Zhe­jiang prov­ince, ac­cord­ing to a state­ment posted on Geely’s of­fi­cial web­site. The fi­nan­cial terms and in­vest­ment plans of the ven­ture have not been dis­closed.

The new ven­ture will of­fer ride-hail­ing ser­vices in sev­eral cities in China, and will use the Mercedes-Benz S-Class, E-Class and V-Class among other ve­hi­cles.

An Conghui, pres­i­dent of Zhe­jiang Geely Hold­ing Group, said the new move was a con­crete step in Geely’s ef­forts to trans­form from a car­maker to a global auto tech­nol­ogy group.

“The joint ven­ture will play a sig­nif­i­cant role as we con­tinue to en­large our port­fo­lio and global pres­ence and so­lid­ify our strong po­si­tion in the mo­bil­ity mar­ket,” said Klaus En­ten­mann, CEO of Daim­ler Fi­nan­cial Ser­vices AG.

Strat­egy con­sul­tancy Roland Berger said in a re­cent re­port that the shift from ve­hi­cle own­er­ship to new shared mo­bil­ity con­cepts is un­stop­pable.

Ac­cord­ing to the re­port, cars for new mo­bil­ity ser­vices will ac­count for 13 per­cent of the new sales in 2020, jump­ing to 20 per­cent in 2020. China will oc­cupy al­most 60 per­cent of the global ve­hi­cle sales for taxis and mo­bil­ity on de­mand by 2020, reach­ing 560,000 units.

John Zeng, man­ag­ing di­rec­tor of LMC Au­to­mo­tive Shang­hai, said car­mak­ers should take the ini­tia­tive in the chang­ing com­pet­i­tive en­vi­ron­ment, and value the po­ten­tial busi­ness op­por­tu­ni­ties ahead, such as the new mo­bil­ity con­cept.

“Driver­less car tech­nolo­gies and ride-shar­ing ser­vices are ad­vanc­ing so quickly that in the fu­ture more and more peo­ple will choose con­ve­nient ride-shar­ing ser­vices in­stead of buy­ing cars and pay­ing for the main­te­nance. And it will even­tu­ally af­fect the whole mar­ket,” Zeng added.

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