Uber China Lands Strategic Investment From Chinese Automaker GAC

Uber China, Uber’s independent business in China, has announced this morning that it has taken a strategic investment from Chinese automaker GAC Group.

The investment from GAC (Guangzhou Automobile Group) is undisclosed, but Uber China said that the tie-in will also include partnerships around “auto sales, services, financing, and marketing, with a particular emphasis on promoting new energy vehicles.”

GAC produces both consumer vehicles — under its Trumpchi, Gonow and Changfeng Motor brands — in addition to buses and commercial trucks. The group claims to be on track to sell 2.4 million vehicles in 2015. While it has partnerships with Fiat, Honda, Isuzu, Mitsubishi and Toyota, that sales volume means GAC isn’t one of China’s biggest carmakers. But — with a target of 200,000 electric vehicle sales by 2020 — there’s plenty of potential around affordable, green vehicles: an area where Uber is increasingly keen to play.

Uber is present in 21 cities in China. The country is close to overtaking the U.S. as its biggest market, but already Uber is planning a massive expansion that could take it to more than 100 Chinese locations. To make that happen, Uber China raised $1.2 billion in funding, which included investment from Uber Global and its existing partner Baidu, at an apparent $7 billion valuation.

While Uber is used to being the bigger fish in most markets, things are a little different in China. Didi Kuaidi, a company formed earlier this year when China’s two top ride-sharing companies merged, dominates the local scene with more than three million rides completed per day. (Uber has around one million daily rides in China.) Didi Kuaidi is backed by a glut of top companies, including Alibaba, Tencent and SoftBank, and it has raised more than $4 billion in investment. That included a recent $3 billion injection of capital at a $16.5 billion value, which makes Uber China’s efforts look like small change in comparison.