Auto firms rev up ride-sharing sector

Three State-owned Chinese automakers are planning to jointly establish a venture to launch a ride-sharing platform, known as T3 mobile travel services.

The move came after FAW Group Corp, Dongfeng Motor Corp and Chongqing Changan Automobile Co signed a strategic deal last December to develop technologies, optimize full-value chain operation, expand global markets and devise sales modes for the sharing economy.

The new venture will bring in partners from other industries to offer Uber-style services and seek to make use of burgeoning intelligent driving technologies to provide safer and more efficient services for users.

"The three major car firms have joined forces to tap into the ride-sharing market, grasping the new opportunity to transform the traditional car companies. And it will expand the three carmakers' presence in the emerging mobility market and help better cope with the changing environment," Dongfeng said in a statement posted on its WeChat account.

John Zeng, managing director of LMC Automotive Shanghai, said the new move was a forward-looking strategic investment, which would help carmakers better cater to customers via the ride-sharing platform.

"Driverless car technologies and ride-sharing services are advancing so quickly that in the future more and more people will choose convenient ride-sharing services instead of buying cars and paying for the maintenance. And it will eventually affect the whole market. "

Zeng said carmakers should value the potential business opportunities brought by the ride-sharing platform.

"For instance, many bike manufacturers now mainly produce bikes for bike-sharing platforms. Once platforms stop making new orders, manufacturers will be hit in the pocket."

Strategy consultancy Roland Berger noted in a recent report that the shift from vehicle ownership to on-demand services is unstoppable. And the fast-developing technology will soon allow fully autonomous vehicles, the report said.

The company expects vehicles for new mobility services will account for 13 percent of new sales in 2020, rising to 20 percent in 2025.

According to the report, China will account for almost 60 percent of the global vehicle sales for taxis and mobility on demand by 2020, hitting 560,000 units.