Daimler and Geely could join forces to take on China’s booming ride-hail market

2018 Denza 500

German auto giant Daimler and its Chinese shareholder Zhejiang Geely Holding Group could join forces to take on the booming ride-hail market in China, which is currently dominated by Didi Chuxing.

Citing people familiar with the matter, reported Tuesday that Daimler and Geely are considering the formation of a 50:50 joint venture that would offer ride-hailing and other mobility services.

One possibility is using cars from Daimler’s Chinese electric car brand Denza for the venture, the people said.

Daimler is also parent to the Mercedes-Benz and Smart brands, and Geely is its single biggest shareholder with a with a 9.7-percent stake purchased in February. At the time, Geely boss Li Shufu said he wanted to join Daimler on reshaping of the automotive landscape toward one filled with electric and self-driving cars, as well as fending off new entrants in the industry like the tech and ride-hailing companies.

A new ride-hailing service could potentially be the first major cooperation between Daimler and Geely. Daimler is also working with Chinese tech giant Baidu on a self-driving system for Chinese roads so we could potentially see any new ride-hailing service eventually feature driverless cars.

Taking on Didi in China’s ride-hailing market won’t be easy. After a long battle, Uber in 2016 finally threw in the towel and sold its Chinese operations to Didi, which counts not only Uber but also Apple and Softbank as major investors.

Geely already has some experience. It currently offers a ride-hailing service called Caocao across 24 Chinese cities. Likewise, Daimler has experience with its MyTaxi service, which is a ride-hailing service offered in parts of Europe but relying on taxis. Daimler is also in the process of establishing a joint venture with the BMW Group to merge the two firms’ respective mobility services.

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