Although it was rumored to have acquisition plans for China’s first online car rental platform, Yongche, Ctrip claimed it was only making a strategic investment and would remain a minority shareholder of Yongche.
Ctrip said it would fully support Yongche’s development as a shareholder and Yongche would continue to maintain independent operations.
Ctrip will further consolidate links with Yongche’s service after it becomes a shareholder. Ctrip already heavily markets Yongche’s service in many cities and recommends Yongche in all its projects. User accounts for both companies are already linked and chauffeur service on the Ctrip app bear the “Ctrip Yongche” label.
Ctrip has participated in two of Yongche’s investments rounds in December 2013 and August 2014 that generated a total of US$53 million, according to its fiscal report. Ctrip’s total investment in Yongche is valued at US$101 million as of December 31, 2014.
After Ctrip first acquired Yongche equity in 2013, Ctrip’s CEO James Liang said Ctrip’s mobile strategy was the most important one ever. “As Yongche’s strategic partner, Ctrip hopes to grow strong with Yongche,” he said.
When Didi Taxi and Kuaididache entered the chauffeur market in August 2014, Yongche was inevitably drawn into a costly war of attrition. Then in February this year the two newcomers merged to become Didi-Kuaidi and concentrate their firepower on the chauffeur service segment.
Recently Didi-Kuaidi has also leveraged express car service and generous subsidies to give them a price advantage and attract flocks of drivers and users. Yongche has found itself under increasing pressure from not only Didi-Kuaidi but also international player, Uber.
Yongche got a fresh injection of capital for purchasing, financing and operations when it set up a joint venture with Haier Financial Services called Haier Yongche Travel in January 2015. In February, Yongche also formed a joint venture with Chery Automobile and Botai Group to develop smart electric car “eChery” by iVokaOS.(Translation by David)
