Toyota invests US$600m in Didi Chuxing, sets up new mobility joint venture in China
- The collaboration will allow Toyota and Didi to fully implement a range of services they have been developing in the country
Toyota Motor Corp will invest US$600 million in Didi Chuxing and establish a new joint venture for mobility services with the Chinese ride-hailing giant as competition in its home market intensifies.
That collaboration will be set up with GAC Toyota Motor Co, the Japanese car maker’s automotive manufacturing venture based in the southern coastal city of Guangzhou, and focus on providing “quality car maintenance support and safe driving guidance to ride-hailing drivers” on the mainland, according to a joint statement released on Thursday.
Toyota and Didi said their closer ties will allow them to expand adoption in China of the Japanese car maker’s proprietary Mobility Services Platform, which includes vehicle management, maintenance, insurance and financing for both ride-hailing drivers and consumers.
“We look forward to combining Didi’s expertise in AI-based large-scale mobility operations and Toyota’s leading connected vehicle technology to build a next-generation intelligent transportation framework for sustainable cities,” said Stephen Zhu, a senior vice-president at Didi, in the statement.
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The capital infusion and increased collaboration with Toyota have come as Didi – in which Apple, Alibaba Group Holding and Tencent Holdings are major investors – is battling new competition from broader online platforms.
Earlier this month, new ride-hailing start-up T3 launched its trial operation in Nanjing, capital of the eastern coastal province of Jiangsu. It is backed by Alibaba, Tencent, online retailer Suning.com and state-owned car makers Dongfeng Motor Corp and FAW Group.
Earlier last month, Meituan Dianping launched its aggregated ride-hailing service in 10 Chinese cities, including Beijing. The on-demand services giant enables users of the new service to compare offers from several platforms, such as Geely’s Caocao Car and Shouqi, and then hail a ride via the Meituan app.
AutoNavi, Alibaba’s maps app with 100 million daily users, has its own aggregated platform that allows users to book rides. New York-listed e-commerce giant Alibaba is the parent company of the South China Morning Post.
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Didi last month invested an undisclosed amount in OnTime, a new ride-hailing service provider backed by Tencent, in a move that widens its strategic alliances.
On its tie-up with Didi, operator of China’s largest ride-hailing platform, Toyota said the goal was also to introduce and promote the widespread use of battery electrified vehicles suitable for future mobility services in China.
“Looking ahead, we will work with Didi to develop services that are more attractive, safe and secure for our customers in China,” said Shigeki Tomoyama, an executive vice-president at Toyota, in the statement.
To be sure, Didi has worked to develop strategic cooperation with various car makers. In April last year, Didi joined a collaboration with Dongfeng, FAW, Geely, BYD Auto, Volkswagen and the Renault-Nissan-Mitsubishi alliance that aims to create an open platform for new energy vehicles, artificial intelligence and shared mobility for the automotive industry.
Although Didi has an estimated market penetration of 88 per cent in China’s ride-hailing sector, the company revealed in April that it was still losing money on many trips. Didi pocketed about 19 per cent of each fare in China on average in the three months ended December 31, while its overall cost per journey was about 21 per cent.
