BEIJING -- Chinese ride-hailing giant Didi Chuxing said its joint venture with Volkswagen is now up and running, with the two companies seen working together on a car-sharing service featuring environmentally friendly vehicles.
Shanghai Juzhong Smart Mobility is capitalized at 64 million yuan ($9.57 million) with Didi controlling 60% and Volkswagen owning the rest, recently released public records show. Didi and Volkswagen are reportedly negotiating a deal in which the German automaker provides roughly 100,000 new energy vehicles, which includes electric cars, according to local media.
The joint venture symbolizes a marriage between a ride-hailing company seeking to exploit Volkswagen's name recognition, and a car manufacturer looking to boost new energy vehicle production to satisfy China's quota policy.
Volkswagen had previously signed on to the Didi Auto Alliance, the global car-sharing partnership announced in 2018 with 31 member companies. Didi dominates China's ride-hailing market, but a pair of passenger killings last year by its drivers created a backlash that is hindering the Beijing-based company's growth.
Didi is looking to jump-start its growth by teaming with Volkswagen, which boasts the top share in China's passenger vehicle market. The companies are also expected to cooperate on development of self-driving technology.
Starting this year, automakers operating in China are required to have new energy vehicles, a category that also includes fuel cell vehicles, make up a certain percentage of their output and sales.
