BMW will become the first global car maker to be allowed to provide ride-hailing services to customers in China this year, as a new business venture in the Asian country is shaping up. A report from Reuters claims the Germans have been able to source a license for such services from the local authorities, and will start off in Chengdu, the capital of the Sichuan province in China this December.
The operations will be taking place under a new subsidiary set up by the Bavarians in China, BMW Mobility Service Ltd. This move, combined with the recent increase in stake announced in the joint venture between BMW and Brilliance China Automotive Holdings Ltd prove the commitment the Germans have for the Chinese market, on the long run. Furthermore, this new endeavor will allow the company to take a sizeable chunk of a market estimated at $23 billion right now.
To put things into perspective, that’s more than all the other ride-hailing markets in the world right now combined, a market currently dominated by the Chinese Didi Chuxing company, which accounts for 90 percent of the business right now. BMW will most likely test things out initially, to see how much room for expansion there is but could also use the data gathered in the process for its future efforts in autonomous driving tech.
While BMW is making moves, Daimler is also looking to replicate this business pattern. The Stuttgart-based giant announced in October that it is joining forces with local car maker and technology company Geely to also set up a ride-hailing joint venture. However, no concrete launch date has been announced by the two, as analysts think the Chinese company is holding off until the Mercedes-Benz parent company agrees on a deal for making cars in China, before moving on to other topics.