We are not sure if it’s a very smart move

BMW said that it will launch its own ride-hailing service in China next month. According to Reuters, BMW is the first foreign car manufacturer that has been granted a license to operate a ride-hailing service in China. The license has been obtained in Chengdu, the capital of the Sichuan province in southwest China.

It’s BMW vs. The Uber of China

BMW To Get Into Ride-Hailing Service Business
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BMW Mobility Service Ltd. will be a fully-owned subsidiary of the German automaker. It will take on the Chinese Uber – Didi Chuxing – in the highly profitable market. For a subsidiary that is backed only by the German company, it will be interesting to see how it will take on Didi Chuxing because this company forced Uber to sell its Chinese operations after it succumbed in the market a couple of years back.

Apart from Didi Chuxing, BMW Mobility Services will also take on the joint venture of Geely and Daimler.

Geely, which is the parent company of Lotus and Volvo, and Daimler, the parent company of Mercedes-Benz announced their collaboration last month but did not state the start date for their services.

Higher Risks, Higher Rewards

BMW To Get Into Ride-Hailing Service Business
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The reason for automakers trying their hand at mobility services in China is because the market is worth $23 billion today, and is dominated by Didi Chuxing which controls 90-percent of the market. And, not to mention, these mobility services are rapidly becoming an alternative to car ownership. With chauffeur-driven vehicles available at the tap of a button, these services pose as a major threat to automakers.

By tapping into such services (ride-hailing and subscription programs), automakers don’t risk much even if the trend moves from ownership to hiring or leasing.

BMW has sought to grow both the ride-hailing services and car-sharing operations into a companion business to car sales through its ReachNow brand. Even though BMW and Daimler are going against each other here in China, they are working together on similar services elsewhere. In fact, the two have planned to open a joint headquarters in Berlin, Germany.

Will BMW be able to sustain and grow against such fierce competition, or will it affect even their present business there? Let us know your thoughts in the comments section below.

Further reading

BMW To Get Into Ride-Hailing Service Business
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Read our full review on the 2019 BMW 3 Series.

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