Tencent to partner with the GAC group in new venture
Tencent is described by Wikipedia: “Tencent Holdings Limited is a Chinese multinational investment holding conglomerate founded in 1998, whose subsidiaries specialise in various Internet-related services and products, entertainment, artificial intelligence and technology both in China and globally. Its twin-skyscrapers headquarters Tencent Seafront Towers (also known as Tencent Binhai Mansion) are based in Nanshan District, Shenzhen.
“The company surpassed the market value of US$500 billion in 2018, becoming the first Asian technology company to cross the valuation mark. It has since then emerged as one of Asia’s most valuable companies, and among the world’s top technology companies by market value. Tencent has been credited as one of the world’s most innovative companies by numerous media and firms, including Boston Consulting Group. As of 2018, Tencent has the 5th highest global brand value.”
The GAC group is a Chinese auto manufacturer: “GAC Group (officially Guangzhou Automobile Group Co., Ltd.) is a Chinese automobile maker headquartered in Guangzhou, Guangdong, and a subsidiary of Guangzhou Automobile Industry Group. GAC sells passenger cars under the Trumpchi brand, passenger cars and commercial vehicles under the Gonow brand, SUVs under the Changfeng Motor brand, and buses under the GAC Bus brand. GAC produced 728,000 vehicles in 2012, and is the tenth largest in volume. It is the sixth-largest producer of passenger cars among Chinese automakers. While the company is primary focused on consumer vehicles, it does make large passenger buses and commercial trucks although it is outside the top ten commercial vehicle makers in China.”
GAC has a joint venture with Honda, but it has five foreign partners altogether allowing it produce other brands including Fiat, Honda, Isuzu, Mitsubishi, and Toyota in China.
GAC which is owned by the Guangzhou municipal government in south China announced in a filing that it will jointly establish a mobility company with Tencent, Guangzhou Public Transport Group, as well as other investors.
New partnership follows an earlier one
In 2017 Tencent and GAC also teamed together on internet-connected cars and smart driving. This allowed GAC to tap into Tencent’s expertise on mobile payments, social networking, big data, and cloud services. Tencent is known for its instant messenger service “We Chat”. The company restructured last October to concentrate on enterprise-facing services and the GAC partnership fits in with the new emphasis. The partnership is discussed in this earlier Digital Journal article.
New mobility venture will have a large capital infusion
The new partnership venture will have a capital infusion of 1 billion yuan or $149 million. GAC will own 35 per cent of the company, Tencent and Guangzhour Public Transport will hold 25 percent and 10 percent respectively with other investors the remainder.
Other Chinese Internet services entering partnerships with the automotive industry
The ride-hailing startup Didi Chuxing, which owns Uber China, announced earlier this week a new joint venture with state-owned BAIC. Huawei the telecommunications manufacturer and voice assistant startup iFytec has partnered with GAC to upgrade its vehicles. The search giant Baidu is operating an open platform has partnered with state-owned Honggi to test out its autonomous driving software. Finally the e-commerce giant Alibaba is producing a smart sedan together with the state-owned SAIC.
