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Daimler, Geely announce luxury car-sharing service

Daimler's backseat driver? Source: Reuters

Daimler and Geely will launch a luxury car-sharing service in selected Chinese cities next year, the firms have announced.

The maker of Mercedes vehicles and its biggest shareholder will both own 50 percent of the new service, which will be kitted out with Mercedes S-Class and E-Class limousines and V-Class vans. Daimler’s super-premium Maybach and Geely’s electric models may also join the fleet. The two partners will develop the software for the venture together. Handelsblatt had reported on an expected deal earlier this month.

Stefan Bratzel, director of the Center for Automotive Management, said the new venture marks an important first step for Daimler in mobility services in Asia after solid beginnings in Europe and the United States.

The company has 26 million customers across its Car2go, Moovel and Mytaxi services. German carmakers need beachheads in China, the largest auto market in the world, to counter technology groups like Didi Chuxing, Baidu, Tencent and Alibaba, said Mr. Bratzel.

But the partners must work quickly to launch their platform and win customers, he believes. Didi Chuxing books some 30 million trips a day in its car-sharing services. Breaking into a market with that kind of competition will be expensive.

Geely owner Li Shufu is the one pushing the venture. His is the largest auto group in private ownership in China, and includes Swedish carmaker Volvo. In February, he acquired nearly 10 percent of Daimler, and is keen to develop partnerships for the mobility world of the future.

The German company has to tread carefully, however, because of its longstanding partnership with Geely rival BAIC to build and market Mercedes vehicles in China.

Franz Hubik covers the auto industry and its relationship to government policy. Darrell Delamaide adapted this story into English for Handelsblatt Global. To contact the author: hubik@handelsblatt.com

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