GAC, Tencent to Spend USD147 Million Setting Up Ride-Hailing Firm
Zhang Yushuo
DATE:  Apr 03 2019
/ SOURCE:  yicai
GAC, Tencent to Spend USD147 Million Setting Up Ride-Hailing Firm GAC, Tencent to Spend USD147 Million Setting Up Ride-Hailing Firm

(Yicai Global) April 2 -- Chinese carmaker GAC Group plans to establish a mobile ride-hailing platform jointly with internet behemoth Tencent Holdings, Guangzhou Public Transport and others with total investment of CNY1 billion (USD147 million).

GAC, Hangzhou-based Tencent Holdings and Guangzhou Public Transport will hold 35 percent, 25 percent and 10 percent, respectively, while four  other investors will take 5 percent each, according to a statement by the Guangzhou-based carmaker yesterday. 

The remaining 10 percent will be used as employee stock incentives.

The mobile ride-hailing project will reportedly adopt a business-to-user mode and select customized car models of smart internet-connected new energy vehicles in its early stages. The investors plan to officially debut the company in Guangzhou in June and then expand it to five cities within one year, with the input of 10, 000 NEVs. 

The project will first target the Guangdong- Hong Kong- Macao Greater Bay Area as its business focus and then gradually expand to other parts of the country.

Tencent will enhance its collaborative research with GAC in policy resources, sector experience, cloud computing, artificial intelligence, high-precision maps, autonomous driving and other fields to accelerate the research, development and application of GAC's smart internet-connected mobile transport technology.

With vehicles becoming electric, smart, shared and internet-connected, traditional carmakers have successively started to invest in the ride-sharing sector, mainly now using NEVs, and set up cab-hailing companies.

Geely owns Cao Cao Chuxing while SAIC Motor has set up Xiangdao Chuxing. Chongqing- Chang'an Automobile has joined hands with Suning.Com, and FAW Group, Dongfeng Motor, Tencent Holdings and Alibaba Group Holding are investing about CNY9.8 billion to form their cab joint venture. 

Competition in the online taxi field is becoming increasingly savage as other more entrenched players like Didi Chuxing -- which trounced Uber in China -- Meituan Dache and Hello Chuxing hunker down for a long siege.

Editor: Ben Armour

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Keywords:   Tencent,ride-hailing