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December 19 (NBD) -- Chinese state-owned automaker SAIC Motor Corporation Limited (SAIC Motor) is setting foot on the online ride-hailing sector by launching its mobility brand "Xiangdao Chuxing" Tuesday.

During a one-month trial period, the ride-hailing platform has gained 600,000 registered users and offered over 300,000 rides. 

The carmaker said it will first provide rides for users in Shanghai and extend services to more cities the next year. It's noted that the operating entity of "Xiangdao Chuxing" has already set up branches in 9 other Chinese cities including Suzhou, Qingdao and Nanjing.

Chen Hong, Chairman of the Board of Directors of SAIC Motor, said by taking advantage of technologies such as big data, artificial intelligence and cloud computing, the car maker now offers a complete package of car-sharing solutions, including online ride-hailing businesses, timeshare rental and short-term and long-term rental.

Wu Bing, CEO of "Xiangdao Chuxing", is bullish on the mobile travel sector, saying unique consumption environment will make China the largest mobility market. It is predicted that the transaction volume of mobility services is going to reach 7.2 billion U.S. dollars by 2020, half of the world's total.

Actually, a string of carmakers have already entered the online ride-hailing market, including Shou Qi Group, Dongfeng Motor, Geely and Daimler, and BMW．　

Weak sales of cars is another contributing factor to their expansion in the sector. PwC once predicted that profits of carmakers and car components suppliers will decrease from 62 percent to 53 percent by 2030.

Sun Naiyue, analyst of data provider Analysys, said most traditional carmakers are determined to transform their business model. As source of cars is important for ride-hailing services, carmakers have a natural advantage in developing this business.

Shu Chang, auto analyst and partner in the EY-Parthenon practice of Ernst & Young (China) Advisory Limited, told news outlet Yicai that developing online ride-hailing service is in line with the demand of automakers and they mainly offer medium- and high-end ride services. For different automakers, they may make some breakthroughs in a specified regions.

Email: tanyuhan@nbd.com.cn