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China’s BAIC, Didi Together Car Leasing Service Amid Sluggish Car Sales

Chinese auto manufacturer BAIC Group and ride-hailing service provider Didi Chuxing aim to partner with other sector players to lease BAIC’s automobiles to customers amid concerns about ride-hailing and carpooling eating into car sales.

China’s BAIC, Didi Together Car Leasing Service Amid Sluggish Car Sales

The companies, which have formed a partnership to develop “next-generation connected-automotive systems”, will companion with electric car (EV) battery manufacturer CATL, State Grid, Postal Savings Bank of China and online utilized automobile exchange platform Uxin to develop an “exchange of car use right”. They aim to have a line of 100,000 vehicles for leasing in the next three years, corporations stated in a statement released Saturday.

Yang Jun, VP of SoftBank-backed Didi, told a web-based press conference that Didi will explore more leasing projects in the future along with automobile rental and sharing services.

China, the world’s greatest auto market where over 25 million automobiles had been bought last year, is also the world’s greatest ride-hailing marketplace.

Auto officers have expressed concerns that new car sales might be disturbed by passengers’ rising ride-hailing use. Consequently, Didi opened joint ventures with different auto manufacturers along with Volkswagen and BYD, while SAIC Motor and Great Wall operate their own ride-hailing services.

General Motors’ Cadillac also launched its first leasing venture in China earlier this year.

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

Industry-wide vehicle sales plunged 8.2% in 2019, pressured by the slowing economy, new emission standards and the impact of Sino-U.S. trade spats.

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