Volkswagen and Didi Chuxing planning car-hailing service in China

Volkswagen stated on Thursday it is in talks with China’s Didi Chuxing to establish a high-end ride-hailing service, while likewise revealing enthusiastic sales objectives for electrical and hybrid automobiles in the world’s significant automarket.

The moves highlights how Volkswagen, which competes with General Motors for the title of the biggest-selling automaker in China, is eager to double down its biggest market, banking on long-lasting development in a nation where many individuals still do not own an automobile.

Volkswagen did not elaborate even more on its strategies with Didi, which would be latest in a rush of tie-ups between car manufacturers and technology firms looking for to profit from brand-new ride services.

Didi Chuxing is China’s biggest ride-hailing business, with over 300 million users throughout 400 cities. It sealed its dominance in the domestic market this year when it purchased Uber’s operations in the country.

Internationally, automakers like Volkswagen are establishing electrical cars and billing themselves as “mobility” companies that don’t simply offer cars however also use alternatives to automobile ownership such as ride-hailing.

In comparable moves, General Motors has purchased ride-hailing service Lyft and Toyota Motor Corp has a collaboration with Uber Technologies.

Volkswagen also plans to be among greatest players in so-called ‘new energy vehicles’ (NEV) of China, stating it was targeting yearly sales of 400,000 by 2020 and 1.5 million by 2025 as Beijing presses car manufacturers to offer low-emissions cars via incentives and friendly policies.

“We need to do more in the NEV area. The federal government is pushing, the basic environment in China is pushing that,” Jochem Heizmann, chief of Volkswagen’s China’s operations informed press reporters ahead of the Guangzhou auto show, which starts on Friday.

Volkswagen will provide its very first locally manufactured NEVs under its Audi brand this year. Audi AG makes the automobiles in a joint venture with China FAW Group.

Furthermore, it has a joint endeavor with SAIC Motor, and the companies have strategies to offer plug-in hybrid cars in China, while it is likewise checking out making electric cars in a venture with Anhui Jianghuai Automobile (JAC Motor).