Volkswagen AG (VOWG_p.DE), the world's biggest automaker, is in talks to form a joint venture with China's Didi Chuxing to manage part of the ride-hailing company's fleet of cars and help develop "purpose-built" vehicles for Didi's services.
As part of the deal between Volkswagen and China's biggest ride-hailing service, expected to be signed early next month, the German automaker will initially manage a fleet of about 100,000 new vehicles for Didi, of which two-thirds will be Volkswagen Group cars, said a senior executive at the carmaker.
Volkswagen will also jointly buy some new cars with Didi to allow the Chinese company to expand its fleet. The two eventually plan to collaborate to design and develop dedicated vehicles, he said, speaking on condition of anonymity as the details are still private.
The executive did not give financial details of the deal but said that Volkswagen will get a slice of the revenue once the venture develops.
The growing popularity of ride-hailing services for commuting and running errands in congested cities such as Beijing and Shanghai is showing early signs of reducing private car ownership. This could have serious consequences for existing carmakers and is forcing companies like Volkswagen to reinvent their businesses and seek out future revenue streams.
"To succeed as a car company in this new ecosystem, we need to know who our customer is, what their journey is and what our strategy should be," the executive said.
He added that this deal will eventually give Volkswagen access to some of Didi's massive trove of data on customer behavior collected through the 3 million rides Didi provides in China each day.
The ultimate goal is the production and use of autonomous cars, the Volkswagen executive said.
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