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Automobile

China's car-sharing market draws in big auto players

FAW partners with Mobike, seeks to boost sales of electric cars

A car-sharing depot in Guiyang to be used under an FAW-Mobike partnership.

BEIJING -- Major Chinese automakers are jumping into the fast-growing car-sharing market as they gear up to increase sales of environmentally friendly vehicles in line with a government push.

FAW Group aims to play catch-up with car-sharing front-runner SAIC Motor with its recent partnership with Chinese bicycle-sharing startup Mobike. Under the deal, FAW's passenger car unit is taking a 10% stake in a newly established Mobike car-sharing unit and will supply electric vehicles. The two sides will share customer data, and cooperate on both the big-data-analysis and financial fronts.

With the deal, FAW seeks to maintain its edge in a transforming industry, the company said. The number of vehicles used for car-sharing services in China totaled only about 100,000 in 2017 but is expected to reach 2 million in 2020. In monetary terms, this market is seen jumping from 1.1 billion yuan ($173 million) to 8.5 billion yuan during the same timespan, according to Chinese research firm Analysys International.

Furthermore, the Chinese government is championing the spread of new-energy vehicles as a solution to air pollution and congestion. And consumers may shift their preference from owning vehicles to just using them.

FAW rival SAIC offers a car-sharing service through group company Evcard. The app-based service was available in 60 cities as of mid-January, with a fleet of around 27,000 electric vehicles. Evcard's app currently has the second-largest active user base behind Gofun Chuxing, the app created by chauffeur service company Beijing Shouqi Group, data from Analysys shows.

Using car-sharing services is usually cheaper than car rentals, if the drive time is brief. Evcard vehicles can be driven for 0.6 yuan per minute, for instance. Users can unlock a shared vehicle and hop in by simply scanning a bar code after registering the driver's license and personal identification numbers, along with bank card information on a smartphone app.

Many Chinese automakers have come to bring car-sharing companies under their umbrellas. Among them are Lifan Group, a Chongqing-based maker of compact vehicles, and Beijing Electric Vehicle, an affiliate of BAIC Group. Lifan last month expanded to its seventh city, Guangzhou. Beijing Electric has also been offering its car-sharing service in a greater number of cities. 

Twelve automakers have joined hands with Didi Chuxing, China's largest ride-hailing company. The roster includes foreign players like the Renault-Nissan-Mitsubishi alliance and South Korea's Kia Motors, as well as domestic manufacturers such as BYD, Changan Automobile Group and Chery Automobile Group.

Rules set to take effect in 2019 require automakers to have new-energy vehicles account for certain percentages of their production and sales. As the car-sharing market expands, the companies plan to supply more green vehicles. At this stage, it reportedly does not take a lot of money to make an electric vehicle share-ready: the installation of ID verification and other equipment is all that is required.

The biggest objective of FAW's tie-up with Mobike is to boost sales volume of electric vehicles, said a source at FAW.

Last year, Zhejiang Geely Holding Group released a new brand with car-sharing capabilities. The owner can press a "share button" on the dashboard, letting smartphone users know when the vehicle is available for rent.

In the future, the battle will be fought between automakers and providers of sharing-economy services, said an auto industry analyst.

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