DiDi Chuxing, BAIC Group Collaborate With Partners For Car Leasing
The consortium is another step forward for the two-year long DiDi-BAIC association
By Sharon Lewis
The long-standing DiDi Chuxing-BAIC Group alliance will be partnering with key players in the automotive industry and Chinese state-owned institutions to lease cars to customers, Reuters reported earlier this week.
The consortium includes battery manufacturer Contemporary Amperex Technology Co. Ltd., car ecommerce platform Uxin, State Grid Corporation of China, and Postal Savings Bank of China, joining DiDi and BAIC in building an “exchange of car use right,” the report said.
Xiaoju Automobile Solutions (XAS), a subsidiary of DiDi, and automobile manufacturer BAIC will jointly promote “car use right” solutions, app-based ride hailing service DiDi tells Jumpstart.
“The companies aim to have a fleet of 100,000 cars for lease in the next three years,” says a DiDi spokesperson.
XAS addresses the demand for car rental on DiDi’s platform by renting cars to Didi’s drivers and customers through both long- and short- term rental and car sharing options.
The DiDi Chuxing-BAIC Group partnership goes back to 2018, when DiDi announced the launch of the DiDi Auto Alliance with 31 auto industry partners including BAIC. The Alliance aimed to pool resources and know-how to develop a full-capacity vehicle operator platform.
The two companies took their association a step forward the following year through a joint venture. DiDi announced the BAIC-Xiaoju New Energy Auto Technology Co. Ltd (or JingJu) venture with BAIC-affiliate Beijing Electric Vehicle Co. in early 2019.
JingJu aims to bring together artificial intelligence mobility solutions and new energy fleet operations to build next-generation connected-car systems.
The Reuters report pointed out that this strategic partnership comes amidst concerns that the ride-hailing service is eating into auto sales.
China is the world’s biggest auto market as well as the biggest ride-hailing market, the report pointed out. Car sales in China have dropped due to an economic slowdown and trade conflict with the United States, and made worse by COVID-19.
After the COVID-19 outbreak in China, vehicle sales in the country plummeted. After an 8.2% drop last year, automakers experienced a whopping 80% slide in February this year.
China is not alone in this crisis. India is the most recent to join a list of countries from across the world facing plunging auto sales due to the pandemic. A Moody’s report pointed to manufacturing disruptions compounding problems in the already ailing sector.
It also noted that of the 20 auto manufacturers, suppliers and rentals it rated in the Asia Pacific region, 18 are being reviewed for downgrade or negative outlook.
Amidst this slowdown, car rentals provide a pathway for original equipment manufacturer to operate their cars.
Header Image by Oli Woodman on Unsplash.