· Volkswagen and Didi Chacheng Joint Venture Cope with New Changes in Transportation

According to Reuters, Volkswagen, the world's largest automaker, is negotiating a joint venture with China's Didi. A senior Volkswagen executive revealed that the agreement is expected to be signed in early May. Part of the agreement is that Volkswagen will manage about 100,000 new cars for Didi, two-thirds of which are Volkswagen Group cars. Volkswagen will also purchase some new cars with Didi to expand the fleet of Didi, and the two companies will eventually work together to design and develop "special-purpose" vehicles.
Regarding the financial details of the cooperation, the senior management did not mention it, but said that once the joint venture started to operate, Volkswagen would receive a portion of the revenue.
The two companies negotiated cooperation for more than one year. Car service is not the only pursuit.
In fact, it is not a new thing for the two days to discuss cooperation between the public and Didi. The Wall Street Journal quoted Su Weiming, a member of the Volkswagen Group's China board of directors, as saying that at the end of 2016, the two companies had discussed the need to develop high-end car service. A year ago, the two companies also discussed the purchase of a part of the shares by the public, but Volkswagen rejected the proposal, and eventually the two companies decided to set up a joint venture.
For this cooperation, Su Weiming said, “This joint venture with Didi is not only in the field of car service. We want to explore more travel projects and explore autonomous driving and no one. Driving a taxi."
A Didi spokesperson also conveyed the unanimous idea. "The details of this cooperation are still being explored. The two companies will cooperate in vehicle operation management and will explore potential areas, such as calling for a car. Service design specific vehicles".
The first move by Volkswagen and Didi to form a joint venture is Volkswagen's commitment to provide about 100,000 vehicles, including electric vehicles and self-driving vehicles. Volkswagen will also manage the team. However, Su Weiming said that Volkswagen is not the only vehicle supplier for the joint venture in the future, but within this joint venture, Volkswagen will be the sole shareholder partner of Didi.
Some financial details of the cooperation are not known yet, but according to the Wall Street Journal, the early Volkswagen will hold 40% of the joint venture, and will increase its holdings by 10% in the future. In the end, the two companies will hold the same proportion. Shares. Didi's current car app service will be carried out as usual outside the scope of the joint venture's operations.
Traffic and car are on the border of reform, and the public is seeking a new way out.
"Daily Economic News" reporter noted that on April 24, Didi and 31 auto industry chain companies jointly launched the "Hongliu Alliance" in Beijing, and Di Wei's founder, chairman and CEO Cheng Wei said in the opening speech. By the way, “the boundaries between cars and travel are becoming more and more blurred.” Cheng Wei believes that the current domestic transportation and automobile industry is undergoing important changes, and travel is rapidly becoming online, intelligent, and sharing, and changes in user travel habits. It will also affect the design, production, operation, ownership of the car and the way users use the upstream car.
Didi also said that the establishment of this alliance is ultimately to design and develop "special-purpose" vehicles, and this time with the public is the first project that entered the public after the alliance was established.
In some domestically vulnerable cities, such as Beijing and Shanghai, there are more and more people using car service, and this seems to release an early signal that the number of private cars may be decreasing. For car manufacturers, it can have a serious impact, so companies like Volkswagen are re-planning their business and looking for other sources of income in the future.
According to Reuters, this year Fiat, Honda and Jaguar Land Rover have reached an agreement with Waymo to provide vehicles for it. Waymo is a self-driving car project owned by Google's parent company Alphabet. Last month, Volvo and Daimler AG said they would supply Uber with vehicles.
The public also seems to feel the news of the upcoming industry changes. Volkswagen's new CEO, Herbert Diess, told reporters last week that Volkswagen will raise about 15 billion euros to invest in car service, autopilot, and data in China before 2020. The investment plan is part of Volkswagen's plan to spend nearly €34 billion on new technology in the world.
“In the new ecosystem, if Volkswagen wants to be a car manufacturer, we need to know who our customers are, what kind of journey they want, and how our strategy should be”, interviewed by Reuters. The public executives said.
At present, Volkswagen has invested in an artificial intelligence company in China - Mobvoi, a shared car company - a contract with a car, and a used car trading company. The executives said that Volkswagen also plans to invest in a high-end car service company and electric vehicle charging station services.
This time, the cooperation with Didi will eventually give the public access to some of the large amount of user data owned by Didi, which is derived from the order volume of 3 million DDT per day. The public who “armed” the data can make more informed decisions about future product design and business operations.

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