Mercedes-Benz shuttle service in China
German auto giant Daimler and its Chinese shareholder Zhejiang Geely Holding Group have joined forces to take on the booming ride-hailing market in China, which is currently dominated by Didi Chuxing.
The two automakers on Wednesday announced they will form a 50:50 joint venture to offer various mobility services, starting with a premium ride-hailing service in major cities.
The service will rely on a fleet of Mercedes-Benz cars initially, including Maybach models. Daimler is the parent company of the Mercedes and Maybach brands.
Geely could also add some models to the fleet eventually. Geely's models would be electric cars from its premium brand portfolio which currently consists of Volvo, Polestar and Lotus.
As part of the joint venture, Daimler and Geely will be equally represented on the board. The two will also jointly develop the software infrastructure required to support the mobility services.
Daimler and Geely establish mobility joint venture in China
The joint venture represents the first major partnership between Daimler and Geely following Geely's acquisition of a 9.7-percent stake in Daimler in February, a move that made Geely the single biggest shareholder in the German automaker.
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.
Daimler is also working with Chinese tech giant Baidu on a self-driving system for Chinese roads, so we could potentially see the 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 in the mobility space. It currently offers a ride-hailing service called Caocao across 28 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.