Photo/Shetuwang

June 27 (NBD) -- OnTime, Chinese ride-hailing service provider backed by Tencent, on Wednesday announced pilot operation in Guangzhou.

Besides Tencent, the 1-billion-yuan mobility startup also has Guangzhou Automobile Group Co., Ltd ("GAC Group"), Didi Chuxing and others as investors.

National Business Daily (NBD) noticed that vehicles to be used will be offered by GAC Group, including the Trumpchi GE3, the Aion S and the Levin Hybrid. OnTime plans to expand the service to five Chinese cities and put 10,000 new energy vehicles (NEVs) into services within one year.

Moreover, OnTime will deepen cooperation with Tencent in cloud computing, AI, high precision map, automatic drive, etc., leveraging the latter's advantages in "traffic" and "connectivity" .

China is home to the world's largest ride-hailing market estimated by consulting firm Bain & Co to be worth 23 billion U.S. dollars in 2018.

It's noteworthy that Chinese tech companies and automakers are battling to secure a piece of the ride-hailing domain in order to gain a stake in the mobility market of the future.

In March this year, Alibaba, Tencent, Suning.com, and carmakers including Chongqing Changan Automobile and FAW have set up a 1.5-billion-U.S. dollar ride-hailing venture. And, a swathe of car manufacturers, from BMW, Geely to SAIC, have also launched their own mobility services.

In a prior interview with NBD, a person-in-charge of the mobility project with GAC Group said upgrading in the auto industry goes side by side with development of the ride-hailing sector, in that the former keeps improving mobility experience for customers and the latter sets a higher demand for industrial upgrading.

"Against the backdrop of the current sluggish auto market, carmakers intend to increase sales channels for their NEVs through tapping the ride-sharing domain," an anonymous analyst in the automobile industry said to NBD.

Consulting firm PWC in a report projected traditional auto manufacturers' share of global industry profits to fall from 85 percent to below 50 percent by 2030. "In this scenario, the only companies that can survive in the long-term are either those that prevail as a clear innovation leader on the product side, or those that recognize mobility as a service and offer customers comfortable and low-priced services."

Ye Shengji, vice secretary general of the China Association of Automobile Manufacturers, deemed that both the NEV and the car-hailing markets are under development and their tie-up could bring win-win results.

Email: gaohan@nbd.com.cn