The Chinese state-owned automotive manufacturing company FAW Group, headquartered in the city of Changchun, northeast China, has agreed with two other state-owned Chinese automotive giants to establish a ride-sharing platform to compete with today's market leader Didi Chuxing.



Changan's 2018 zero-emission electric Benni, goes 210 km on a 30 minute charge of its Changan battery.
An innovative electric drive system optimizes the distribution of energy consumption.
(Photo courtesy Chongqing Changan Automobile)




A major Chinese ride-sharing, AI and autonomous technology conglomerate, Didi Chuxing provides transportation services to more than 450 million users across some 400 cities in China.



But now the three government-owned automakers are joining forces to give Didi Chuxing some good-old-fashioned competition.



For the ride-sharing platform project, the FAW Group is joined by the Dongfeng Automobile Co., Ltd. (DFAC), based in Xiangyang, central China.



As of December 31, 2017 DFAC was majority owned by Dongfeng Motor Co., Ltd., a Chinese state-owned enterprise. So, DFAC is indirectly owned by the Chinese Government, via Dongfeng Motor Corporation; the French State via Renault; shareholders of Dongfeng Motor Group and other shareholders of Nissan and Renault, via Nissan.



The third member of this ride-sharing platform team is Chongqing Changan Automobile, a state-owned enterprise headquartered in Chongqing, southwest China.



"The three major car companies have joined forces to enter the field of shared travel, which provides an opportunity to transform traditional car enterprises," said an announcement posted by Changan on its Wechat account on Thursday, Reuters reports.



The three firms signed a cooperation agreement in December 2017.



The new venture, called T3 Mobile Travel Services, intends to use driverless vehicles to distinguish itself from the competition.



Currently, China’s rideshare market is dominated by Didi Chuxing, which late last year raised $4 billion, after pushing Uber out of China in 2016. The latest round of funding has lifted Didi’s value to $56 billion, up from $50 billion in April.



Didi offers regular taxis, a private car service called Premier, and an Express option for carpooling.



In April, several Chinese companies, including the Alibaba-owned Chinese mapping firm AutoNavi and local services provider Meituan Dianping, have opened their own ride-sharing platforms.



AutoNavi has launched a ride-hailing service in Chengdu and Wuhan and is hiring drivers in Beijing, Guangzhou, Shenzhen, and Hangzhou, with plans to launch in these cities, according to local media.



With a policy sure to make the company popular with drivers, AutoNavi will not collect commissions, allowing its drivers to earn the full amount a passenger pays for the trip.



“China’s ride-sharing market is huge and has big growth potential, but it is still about offering the cheapest rides,” Jia Mo, an analyst at market research firm Canalys told "Forbes" magazine. “In such a price-oriented market, consumers don’t have very much loyalty to Didi.”



By Sunny Lewis

Environment News Service (ENS)

July 23, 2018