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BAIC, Didi plan car leasing service amid new car sales decline in China

Chinese automaker BAIC Motor and transportation company Didi Chuxing plan to collaborate with other industry players to lease BAIC’s cars to customers as new car sales have declined.

The companies, which have a joint venture to create the next-generation connected-car systems, will collaborate with electric vehicle (EV) battery maker CATL, State Grid, Postal Savings Bank of China and Uxin to build an “exchange of car use right”. They intend to have a fleet of 100,000 cars for leasing in the upcoming three years, companies stated on Saturday.

Yang Jun, vice president of SoftBank-backed Didi, informed an online press conference that Didi will find out more leasing projects in the future which would also include car rental and sharing services.

China, the world’s biggest automobile market where more than 25 million vehicles were sold in 2019, is also world’s biggest ride-hailing market.

Auto executives are concerned that new car sales will be disrupted by passengers’ increasing ride-hailing use. As a result, Didi started joint ventures with different automakers such as Volkswagen and BYD while SAIC Motor and Great Wall operate ride-hailing services separately.

General Motors’s Cadillac also started its first leasing project in China previously this year.

Research by consulting firms Bain & Co and Deloitte revealed fewer customers in China’s big cities think owning a vehicle represents their social status or is a symbol of their identity.

Industry-wide auto sales dropped 8.2% last year, pressured by declining economy, new emission standards and the impact of Sino-U.S. trade war.

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