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Oct. 25 (NBD) -- Geely Group Co, a new business entity of Chinese car maker Zhejiang Geely Holding Group (Geely), will set up a 50-50 ride-hailing joint venture (JV) with the mobility business unit of German auto manufacturer Daimler AG. 

Headquartered in East China's Hangzhou, the JV will offer ride-hailing services in some cities in China using Daimler's premium models including Mercedes-Benz S-Class, E-Class and V-Class cars and also all-electric vehicles made by Geely.

This is the first collaboration between the two automakers since Geely becomes the largest single shareholder of Daimler.

In February this year, Geely stated that it has accumulated a 9.69 percent stake in Daimler for about 7.3 billion euros (8.5 billion U.S. dollars).

The investment shows Geely's desire to form an alliance with the German carmaker so as to better tackle challenges that all auto manufacturers are faced with.

With the new JV, both two giants expect to further expand their presence in the mobility field.

Developing ride-hailing services forms part of Geely's transformation from a vehicle manufacturer into a global automotive technology group, said An Conghui, president of Geely.

So far, Geely has launched ride-hailing platform CaoCao in the domestic market. The app currently provides over 29,000 pure electric vehicles in 28 cities across China and completes over 360,000 trips on a daily basis. The number of its registered users has exceeded 17 million, with more than 1 million daily active users. 

Daimler also said the proposed JV is another step in the implementation of the Daimler CASE strategy with four pillars Connected, Autonomous, Shared & Service and Electric Drive.

The German automaker currently operates car-sharing platform car2go and Car2Share to provide free-floating and station-based ride-hailing services in China. A total of 470,000 platform users have completed over 20 million kilometers in journeys. 

Besides Geely and Daimer, some other domestic automakers have also made foray into the mobility domain. 

In July 2018, FAW Group Corporation, DongFeng Automobile Co Ltd and Chongqing Changan Automobile Co Ltd jointly announced establishment of new company named T3 Mobile Travel Services.

Automobile companies have seen great potentials in China's fast-growing mobility market.

According to statistics from research firm Bain, the combined transaction volume of China's ride-hailing market hit 23 billion U.S. dollars in 2016, and the metric is forecasted to reach 72 billion U.S. dollars in 2020. 

Besides, the giants also seek for a boost in car sales through deployment in the niche sector.

Cars for new mobility services will occupy 13 percent of the new car sales globally by 2020 and up to 20 percent by 2025, a report reveals.

China will contribute almost 60 percent of the global vehicle sales for taxis and mobility on demand by 2020. 

Email: zhanglingxiao@nbd.com.cn