Daimler to Work with Geely on Ride-Hailing Joint Venture

Shares in Geely jumped as much as 6.6% on Wednesday, putting it among the best performers on the Hang Seng index, following reports that it is in talks with Daimler to launch ride-hailing services in China.

Related: Geely Has Become China’s Third Largest Carmaker

Geely is in talks with Daimler to set up ride-hailing and car-sharing services under a 50-50 joint venture. Nikkei Asian Review reported the companies hope to agree a deal by the end of the month.

The venture would target an expanding market for the new types of transport services that has been dominated so far by tech companies like Didi and Uber Technologies Inc. Automakers are scrambling to establish themselves in new technologies, as car-sharing and autonomous driving threaten to upend the traditional model of vehicle ownership.

Related: Geely Founder Li Shufu Acquires 9.69% of Daimler AG Becoming Largest Single Shareholder

Earlier this year, Li Shufu, the chairman and main owner of China Zhejiang Geely Holding Group, acquired a 9.69% stake in Daimler, becoming the single largest shareholder of Daimler AG. Commenting on this development, Bill Russo, chief executive officer of Shanghai-based advisory firm Automobility Ltd said:

Li acquiring the stake in Daimler does have a very clear strategic rationale and industry logic. The JV, as the first step of the collaboration, is good evidence of that.

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