Didi is the most commonly used ride-hailing app in China
SUMMARY
In a partnership expected to be announced early May, Chinese ride-hailing company Didi Chuxing and Volkswagen (VW), the world’s largest car manufacturer, will be become equity partners in a joint venture focused on ride-sharing. The two companies plan on perfecting a fleet of green vehicles, special models specifically for ride-sharing, and are placing a large emphasis on developing autonomous vehicles. This decision comes in the wake of China’s recently announced liberalization of laws restricting foreign manufacturers’ venture ownership and an earlier announcement of Didi forming an alliance with 31 car manufacturers, including Toyota and Nissan. Now the country’s largest ride-hailing app, Didi rose from humble beginnings, starting out with just 800,000 yuan ($125,000) to a whopping $50 billion USD in the span of just 5 years. Worldwide, Didi was named the second most valuable startup, following Uber, even though Didi bought out Uber’s Chinese brand back in 2016. Didi made their foreign debut late April in Toluca, Mexico and late last year, the Chinese firm dipped their toe into the broader Latin American market with their purchase of a Brazilian ride-hailing company.
FAO GLOBAL ASSESSMENT
This joint-venture is likely to have a significant impact on car manufacturers and organizations in the China automotive supply chain. The partnership’s emphasis on developing new models for Didi’s fleet could allow for a boom in the development of economical self-driving and green cars. One of the most significant aspects for the upcoming VW-Didi fleet will be maintenance. Automotive parts companies, self-driving tech start-ups, and service providers will likely be clamoring for a chance to support this initiative. If this partnership proves fruitful, we will likely see more joint-ventures between car manufacturers and tech start-ups.
Related Links
- The Wall Street Journal – China’s Didi, Volkswagen Plan Ride Hailing Venture
- Reuters – Exclusive: Volkswagen in talks to man fleet, co-develop self-driving cars
- Fortune – Volkswagen and Didi Chuxing Have Team Up on a New Self-Driving Venture
- Tech Crunch – Confirmed: Didi buys Uber China in a bid for profit, will keep Uber brand
- China Daily –Didi Chuxing speeding ahead
- Reuters – China’s Didi Chuxing launches ride service in Mexico
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