Geely and Daimler Partner on Chinese Ride-Hailing Service Using Mercedes, Maybach Cars

The two automakers will take on Chinese ride-hailing giant Didi Chuxing.

Produktionsstart im Mercedes-Benz Werk Sindelfingen
Daimler AG

Chinese automaker Geely and Mercedes-Benz parent Daimler have formed a 50-50 joint venture to offer various mobility services in China, starting with a ride-hailing service. The two companies have worked on mobility services independently, but this is the first time they've teamed up on such a project.

The ride-hailing service will initially use Mercedes-Benz S-Class, E-Class, and V-Class models, according to Reuters. It's possible that models from the Mercedes ultra-luxury Maybach sub-brand and from Geely's own lineup could be added at a later date, reports Motor Authority. In addition to selling cars under its own brand name in China, Geely owns Volvo and Lotus.

The main competitor for the ride-hailing service will be Didi Chuxing—China's equivalent of Uber. Didi currently accounts for 90 percent of the Chinese ride-hailing market, according to Reuters, and was able to muscle Uber out of its home country in 2016. But the potential prize for Geely and Daimler is huge. The Chinese ride-hailing market expanded from 30 million users in 2014 to 217 million in 2017, and is now worth $23 billion, reports Reuters, citing data from consulting firm Bain & Co.

Geely acquired a 9.7-percent stake in Daimler earlier this year, making it the German automaker's largest shareholder. The move stoked German fears that the domestic auto industry will become too reliant on Chinese firms for vital technology, and also complicated Daimler's existing relationship with Chinese automaker BAIC. That partnership was started to satisfy regulations requiring most foreign automakers to partner with local firms in order to build cars in China.

Both Daimler and Geely already have experience with ride-hailing and other mobility services. Geely currently operates a ride-hailing service called Caocao in 28 Chinese cities. Daimler operates or invests in a variety of mobility services, including the Car2Go car-sharing service, and is currently engaged in a global mobility-service joint venture with BMW.

Taking a Walk Around the New Mercedes-Benz A-Class
The Drive