SAIC Motor said to tap into ride-hailing realm

Shanghai (Gasgoo)- Chinese state-owned automaker SAIC Motor plans to step into ride-hailing area, according to local media. Some ride-hailing service practitioner revealed that they have received offers from SAIC Motor.

According to people with knowledge of this matter, SAIC has set up a ride-hailing department and its recent recruitment in the new department is focusing on people who will be in charge of products, technologies as well as operation businesses. Wu Bing, general manager of SAIC Motor Insurance Sales Company Limited (INSAIC), is likely to preside over the ride-hailing businesses. Besides, several former Didi's employees have recently confirmed their participation.

SAIC Motor does have an inherent advantage in operating ride-hailing services. As a massive vehicle maker in China, SAIC is never in shortage of vehicles, which omits the need to rent cars from vehicle leasing companies. Meanwhile, the group is working on developing electric vehicles (EV), so that the licensing issues could be solved as well.

According to local media, SAIC Motor's launch of ride-hailing businesses aims to promote its vehicle sales relying on the rental business development and the connection with manufacturing businesses.

Within the cash-burning industry, ride-hailing platforms always depend on providing large subsidies to strive for sufficient orders. However, SAIC Motor doesn't plan to massively offer subsidies. “The ride-hailing platform is not designed to gain profits but to accumulate data.” The people familiar with the matter said.

SAIC Motor is not the unique automaker who sets foot in mobility field. In 2015, Geely Auto set up its ride-hailing platform Caocao Zhuanche, which has already obtained operational licenses in 19 cities across China. Relevant data show that there are over 100 thousand orders per day received on the platform, which can generate daily operational income of around RMB 2.7 million. Reportedly, it will land in some Chinese megacities, such as Beijing, Shanghai and Shenzhen in 2018. In addition, FAW Group has recently grouped several subsidiaries into a new mobility unit.