German carmaker Daimler announced Wednesday that it will start a 50-50 joint venture with Geely Group, a Chinese automotive manufacturing company, to provide premium ride-hailing services in several Chinese cities.
“Daimler is ideally positioned to continue its transformation by expanding into a comprehensive mobility services company as we pave the way for autonomous driving,” said Klaus Entenmann, CEO of Daimler Financial Services AG. He added, “With Geely Group, we have found an excellent partner to expand our mobility services in China.”
The joint venture will be based in Hangzhou, with an initial fleet that includes Mercedes-Benz cars and possibly electric vehicles from Geely Group. Financial terms and investment plans have not been disclosed yet.
It is a win-win solution for both companies, as the cooperation can meet the demands of both parties to expand into new mobility services.
“The development of such services, in which both companies already have a presence, forms part of our transformation from a vehicle manufacturer into a global automotive technology group,” said An Conghui, President at Geely Holding.
Geely Holding has launched CaoCao, a Chinese domestic ride-hailing service that has more than 17 million registered users across 28 cities.
However, the joint venture still has a long way to go since Didi has an enormous market share of 63 percent, according to the Report on Online Taxi-hailing Services in China (2017-2018) by iiMedia, a data analysis company. Caocao holds only 3.9 percent.