Chinese state-owned carmaker Beijing Automotive Group (BAIC) and ride-hailing giant Didi Chuxing have teamed up with other industry players on a platform that will offer BAIC’s cars for lease, amid a slump in new car sales during the coronavirus pandemic.

Under the alliance, which also includes electric vehicle battery maker CATL, State Grid, Postal Savings Bank of China and online second car trading platform Uxin, the companies plan to jointly promote a fleet of 100,000 cars for lease on a “right to use” model over the next three years, they announced at an online press conference on Saturday.

A man walks past cars at an assembly line producing electronic cars at a factory of Beijing Electric Vehicle, funded by BAIC Group, in Beijing. (Picture: Reuters)

The move comes after car sales in China, the world’s largest auto market, plunged 79% in February amid the coronavirus outbreak, marking the industry’s biggest-ever monthly reduction in sales and the 20th straight month of decline, according to the China Association of Automobile Manufacturers.

There have also been wider concerns that the ride-hailing boom over the past years, led by Didi, would ultimately eat into car sales and lead to younger consumers becoming less interested in owning cars.

By working with partners in areas such as finance, second-hand cars and charging facilities, the companies hope to make the most of shared resources and build an ecosystem that will enhance private car users’ experience, they said at the press conference on Saturday.

“We hope to match car demand with supplies from various partners on our integrated ecosystem and optimize the use-value of vehicles,” said Li Yixiu, director of BAIC’s sales and marketing committee. “This will lead to the transformation in the auto industry and its consumption trend, promoting the development of dominant automobile transactions from ownership to usage rights.”

Didi plans to explore more car leasing projects in the future and promote the concept of car use rights where customers can hail, rent or buy a car easily at any time, according to Didi vice-president Yang Jun.

The ride-hailing company has worked on similar industry partnerships in the past: in 2018, it set up an alliance with over 30 carmakers and industry partners to pool expertise in areas such as mobility services and smart driving technologies and to develop vehicles for ride-sharing.

In July, Toyota Motor Corp also announced it would invest US$600 million in Didi and establish a new joint venture for mobility services with the Chinese ride-hailing giant.