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Business / Auto China

Dotcom expertise helps drive car selling joint venture

By Li Fusheng (China Daily) Updated: 2016-06-13 10:56

Dotcom expertise helps drive car selling joint venture

Visitors arrive for the founding ceremony of Dasheng Technology Co, a 45-40-15 partnership among carmaker GAC Group, internet company LeEco and insurance company Urtrust, in Guangzhou on June 8. [Li Fusheng/China Daily]

A joint venture named after the literary figure Monkey King is planning to bring innovation to the automotive industry in 2016, which is the Year of the Monkey according to the Chinese zodiac.

The venture is the 1.4 billion yuan ($213.5 million) Dasheng (which in English literally means "Monkey King") Technology Co, a 45-40-15 partnership among carmaker GAC Group, internet company LeEco and insurance company Urtrust. The partnership aims to make it easier to purchase, sell and insure cars online.

There are already several carselling websites in China, such as Tmall.com and bitauto.com, but Dasheng, which is expected to come online in November, is the first to have an automaker among its shareholders.

"We will make the most of our advantages - GAC's industry chain, LeEco's online fanbase and Urtrust's expertise - to build a reliable online platform for customers to purchase, repair and sell cars," said Zeng Qinghong, general manager of GAC Group, at the joint venture's founding ceremony in Guangzhou on June 8.

Instead of making the online platform the automaker's exclusive domain, the three shareholders decided to make it as open as the internet itself: anyone wishing to sell a car or spare parts is welcome, as are investors.

Ding Lei, co-founder of LeEco's Super Car project, said: "The partnership heralds a completely new business model, and based on such an innovative model, it will bring something transformative to existing car selling and service platforms."

Feng Xingya, GAC's deputy general manager and Dasheng's chairman, said the joint venture is the first major move by GAC to implement its 2016-2020 strategy that was proposed last year. Under the strategy, the company plans to become more adaptable to customer habits and integrate into the internet age.

GAC is not alone in exploring possible growth mechanisms by partnering with a dotcom company.

In early April, Shanghai-listed JAC Motors clinched a 10 billion yuan deal with NextEV on new-energy and smart cars as well as connectivity technologies. NextEV is a Chinese startup aspiring to make electric and smart supercars and is backed by Tencent Holdings and investment firm Hillhouse Capital.

In February, British automaker Aston Martin signed a Memorandum of Understanding with LeEco towards the creation of a new concept electric vehicle called the Aston Martin RapidE. It is reported that the car will hit the market in 2018, with LeEco providing powertrain and connectivity technologies.

The first model from the partnership between SAIC and Alibaba will be unveiled in September, said SAIC President Chen Zhixin at the recent Chongqing Automotive Forum.

In March 2015, the two companies established a 1 billion yuan 50-50 joint venture called Zebra to develop internet-based cars.

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