German luxury automaker BMW puts up its plan to launch a ride-hailing service in China which it sets to commence this December. Should it come to fruition, this would be the first time that a foreign carmaker was able to get a license to operate the said transport service in the country.
According to Reuters, BMW would be the first global automaker to obtain such a license. Given that China is among the few countries where the growth of the ride-hailing industry is at a rapid rate, this business deal will prove to be a win for the European car brand.
In particular, BMW Mobility Service Ltd., which is a subsidiary of the BMW Group, has obtained the license in Chengdu, Sichuan province, in China's southwest.
Aside from this project, BMW is also looking to increase its stake from 50 percent to 75 percent in its joint venture with Brilliance China Automotive Holdings Ltd.
Brilliance Auto Group, as the latter company is being referred to, is a Chinese auto manufacturer based in Shenyang.
BMW's partnership with Brilliance is a clear indicator that the Xi Jinping administration is making true of its promise to further open up its economy for foreign ownership, a report from Bloomberg said. This deal is slated to reach its completion in 2022.
Growing Market
As said earlier, China's ride-sharing market is now valued at $23 billion, the largest in the world. Currently, China's Didi Chuxing has the lion's share of the market with the company dominating 90 percent of the country's bookings and related services.
However, the scenario will likely be changed soon, as reported over at Fortune. With the government's determination to make its domestic markets more accessible to foreign and international companies, it created a considerable room for competition.
It's more possible that the new players in this transport sector will offer up a partnership with social commerce platforms such as WeChat, Dianping, and Alipay.
Didi Chuxing, on its part, has lately been facing stern criticism from the public and the government following the report on the death of a female passenger which was allegedly committed by a driver of the company.
The ride-hailing giant has since imposed additional security measures to ensure the safety of its passengers as well as of its drivers, a previous report from Business Times said.
Moreover, the company is also looking to improve its hiring system so as to prevent similar passenger killing cases.
Aside from BMW, Volvo is also working with China's Baidu Tech, this time in an effort to bring the country's first ever driverless carpool service.
