GAC Group, the state-owned Chinese car company, announced Thursday (Jan. 31) that it is teaming up with Tencent, the internet and gaming company, to create a mobility company.
A report, citing a Chinese regulatory filing, stated that Guangzhou Public Transport Group and other investors will also back the new entity. In 2017, GAC and Tencent inked a partnership to develop internet-connected cars and build artificial intelligence into vehicles to aid in driving. The two are also looking at eCommerce related to automobiles. At the time, GAC said it wanted to access Tencent's knowledge in digital payments, social media, Big Data and AI.
Under the terms of the deal, which was inked Thursday, the venture will get one billion yuan, or $149 million, in capital. GAC owns 35 percent, while Tencent gets a 25 percent stake and Guangzhou Public Transport holds 10 percent of the company.
Tencent, which operates WeChat, the hugely popular messaging app in China, has been diversifying its business with a focus on enterprises. In September, it announced its first restructuring in six years, driven by tougher regulations for its core businesses in China. At the time, Tencent Vice President Zhong Xiangping said the company’s autonomous driving business was focused on being a software and services provider, announcing a unit that provides cloud services to business partners in connected cars.
The deal between GAC and Tencent comes on the heels of an announcement earlier this week that ride-hailing company Didi Chuxing reached a deal with BAIC, the state-owned car company. Chinese technology companies and automakers have been increasingly teaming up as they aim to bring more technology into vehicles. GAC has previously worked with Huawei and iFlytek to improve upon its vehicles, noted the report.