Tencent Holdings Ltd. has signed a strategic partnership agreement with Guangzhou Automobile Group Co., Ltd. to discuss possible cooperation in automobile e-commerce, automobile insurance and new energy vehicles, according to a statement issued by Guangzhou Automobile Group.
This is Tencent’s second attempt to tap into the automotive sector as its much publicized plans to make electric cars with Taiwanese electronics company Foxconn appear to have stalled.
The agreement with Guangzhou Automobile Group, which is listed on the Hong Kong and Shanghai stock exchanges, would help Tencent break into a broad automotive ecosystem. Guangzhou Automobile has developed a supply chain covering research and development, whole vehicle and vehicle parts manufacturing, as well as business and financial services. The company also owns an automobile e-commerce platform called DS.cn and an automobile insurance provider Urtrust Insurance Co, Ltd.
In 2015, Tencent partnered with Taiwan’s Hon Hai Precision Industry Co Ltd (trading as Foxconn Technology Group) and luxury car dealer China Harmony Auto Holding Ltd to work on
developing electric vehicles. But Tencent and Foxconn are both rumored to have withdrawn from the investment.
China’s two other Internet giants, Baidu and Alibaba, are also trying to enter the automobile market. Baidu has said it plans to roll out a partially self-driving car by the second half of 2019 with its new partner, Chinese state-owned car maker Anhui Jianghuai Automobile (JAC). In 2015, Alibaba and Chinese automaker SAIC Motor Corp Ltd invested RBM1 billion (US$152 million) to develop Internet-connected cars. The Roewe RX5, a compact SUV was introduced as the first “Internet-connected car” in China in 2016.