Shares in Geely jumped as much as 6.6% on Wednesday, putting it among the best performers on the Hang Seng index, following reports that it is in talks with Daimler to launch ride-hailing services in China.
Geely is in talks with Daimler to set up ride-hailing and car-sharing services under a 50-50 joint venture. Nikkei Asian Review reported the companies hope to agree a deal by the end of the month.
The venture would target an expanding market for the new types of transport services that has been dominated so far by tech companies like Didi and Uber Technologies Inc. Automakers are scrambling to establish themselves in new technologies, as car-sharing and autonomous driving threaten to upend the traditional model of vehicle ownership.
Earlier this year, Li Shufu, the chairman and main owner of China Zhejiang Geely Holding Group, acquired a 9.69% stake in Daimler, becoming the single largest shareholder of Daimler AG. Commenting on this development, Bill Russo, chief executive officer of Shanghai-based advisory firm Automobility Ltd said:
Li acquiring the stake in Daimler does have a very clear strategic rationale and industry logic. The JV, as the first step of the collaboration, is good evidence of that.
A 3d animation professional with over 20 years of industry experience having served in leading organizations & production facilities of Pakistan, an avid car enthusiast and petrolhead with an affection to deliver writings to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com