Unity is strength. The Chinese manufacturer Geely seeks to associate with Daimler, of which he is already the largest shareholder, to tackle the car-sharing and VTC market.
The two companies are currently in talks to create a car pooling and on-demand vehicle joint venture in China, reports Bloomberg. The objective would be compete with Didi, current leader of the Chinese market transportation services.
A traditional model upset
According to the German business daily “Handelsblatt”, negotiations are still ongoing between the two manufacturers. However, the news made the markets react. The title Geely, listed on the Hong Kong Stock Exchange, gained 2.69% to 13.76 Hong Kong dollars (1.50 euros) at 16 hours (local time). For its part, Daimler lost 0.90% to 53.94 euros, at 11:30.
This future partnership is part of a “sectoral logic” quite clear, says Bill Russo, CEO of the consulting company “Automobility”, cited by Bloomberg. For several months now, car manufacturers have been trying to establish themselves in mobility services, both car pooling and autonomous cars threaten the traditional model of the private car.
More and more partnerships
In recent years, Zhejiang Geely holding company Group, parent company of the Chinese brand, has chained acquisitions. Main Chinese manufacturer, with a production of 950,000 vehicles per year, in 2010 she acquired the Swedish Volvo. Then Geely offered himself London taxis in 2013, and the British manufacturer Lotus, four years later. In February 2018, Geely acquired a 10% stake in Daimler, becoming its largest shareholder. A carpool and VTC company would allow the Chinese manufacturer to link all its car assets.
Daimler, meanwhile, already knows some success in mobility services, thanks in particular to its carpool company ViaVan. But also with its application MyTaxi and its Car2Go platform, developed in partnership with DriveNow and BMW. A joint venture with Geely, beyond strengthening their relationship, will allow the German manufacturer to gain a foothold in the Chinese market at a time when Didi must face regulatory investigations unprecedented in China.