TOKYO -- Japan's Itochu will invest in an up-and-coming Chinese maker of electric autos, hoping to accumulate knowledge of related services in the fast-growing field.
The trading house will buy into Shanghai-based Singulato Motors, which is valued at an estimated $900 million. It has also taken a stake in Shenzhen-based DST, which lends out electric trucks and vans.
In April, Itochu created a war chest of 10 billion yen ($90 million) for strategic investments, setting up a base in Shenzhen to seek out promising targets. Its investment in Singulato and DST is estimated at several hundred million yen each. Itochu hopes the two deals will create synergies with its existing businesses.
Singulato plans to start mass production this year. The automaker is developing functions that take advantage of connected-car technology, such as using driver performance data to update insurance premiums and adjusting the vehicle's lighting based on observations of the driver's facial expressions by internal cameras.
Itochu intends to build know-how in such services, looking to expand further into a field expected to continue growing globally. It handles auto sales in Japan through subsidiary Yanase and serves as sales agents abroad for Japanese automakers. Itochu aims to tap China as a market that has gone to the head of the class in electric vehicles.
DST lends trucks and vans from a fleet of roughly 15,000 electric vehicles to Chinese home delivery couriers and other businesses. Itochu holds a stake in Japanese truck maker Isuzu Motors and sells commercial vehicles at home and abroad. Knowledge gleaned from DST should help the trading house in future businesses related to commercial vehicles.
