Geely's founder and chairman, Li Shufu. Picture: REUTERS
Geely's founder and chairman, Li Shufu. Picture: REUTERS

Beijing - Chinese billionaire Li Shufu may have found the glue to start binding together the vehicle assets he has assembled across the globe – by creating an entirely new business.

Li’s Zhejiang Geely Holding Group is in talks with Daimler — in which Li took an almost 10% stake earlier this year — to set up ride-hailing and car-sharing services in China, according to people familiar with the matter.

Under discussion is a 50-50 venture that would take on market leader Didi Chuxing, said one of the people, who asked not to be identified.

Geely would join forces with the German carmaker to create mobility services – an area that has been dominated by tech firms such as Didi and Uber.

"Li acquiring the stake in Daimler does have a very clear strategic rationale and industry logic," said Bill Russo, CEO of Shanghai-based advisory firm Automobility. "The joint venture, as the first step of the collaboration, is good evidence of that."

In the past eight years, Geely has amassed a stable of brands, including Volvo Cars, British sportscarmaker Lotus, London Black Cabs – and the largest stake in Daimler.

Daimler and rivals from Volkswagen to Toyota are seeking a foothold in the transport services that are changing the way consumers use vehicles. China, the world’s biggest car market, may end its near-three-decade growth partly because consumers are moving from owning to sharing, according to Russo and other analysts.

Daimler has had more success in mobility than most, gaining traction with ride-pooling service ViaVan, ride-sharing app MyTaxi and car-sharing platform Car2Go, which is being merged with BMW’s DriveNow.

Daimler declined 1% to €54.03 at 3.13pm in Frankfurt.

Bloomberg

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