China’s biggest online used-car dealer Guazi branches out into new car sales too
Site has now raised US$180m from venture capital firms DST Global, Capital Today and Bank of China Group Investment
Guazi.com, China’s largest online used car sales site by volume, is to start offering new vehicles too, after its latest round of fundraising as competition heats up in the world’s largest car market.
The move comes hot on the heels of the launch of Maodou, a site that deals in just new cars, both sold and leased. Interested customers can get a hands-on feel of their preferred models in outlets before making their decision.
The Beijing-based Maodou has signed cooperative agreements with 24 leading manufacturers – offering 70 different models – including Changan, SAIC Volkswagen Automotive, Infiniti and Chrysler and Chinese carmaker Guangzhou Automobile Group’s joint venture GAC-Fiat.
To boost its business, Maodou also provides car loans, offering buyers just a 10 per cent down payment, while keeping monthly payments close to those for used vehicles.
Founded in 2015, Guazi has raised US$180 million in funding from venture capital firms DST Global, Capital Today, and the private equity arm of state-owned Bank of China, Bank of China Group Investment.
Existing shareholders Sequoia Capital and H Capital have also contributed to the latest round of financing, the start-up said.
Guazi’s chief executive officer Yang Haoyong said its strategy is to build an all-in-one car platform targeting the retail market.
Acknowledging competition in car financing and sales has intensified in recent years, Yang said his priority is building market share, adding the relatively low levels of down payment and monthly payment would appeal to younger customers who may prefer new models, but who do not have much ready cash.
Xu Xin, the founder of Today Capital, compared Guazi to the US’s largest used-car retailer CarMax, which offers online and car lot sales, and said that Chinese peers have taken a fraction of the time, just two years, to develop platforms that already rival the American giant.
China’s vehicle sales overtook those in the US in 2009 and continue to grow, with sales of over 28 million last year.
The central government expects automobile factory output to hit 30 million cars by 2020 and 35 million by 2025.
Considerable investment has been ploughed into used-car sites such as Guazi lately.
China’s answer to Uber, Didi Chuxing, injected US$200 million last month into online second-hand car trading platform Renrenche. While Guazi’s smaller rival Mychebao announced in June it had landed new funding of 500 million yuan.