China’s Internet giant Tencent Holdings, led by chairman Ma Huateng, is only the latest billion dollars company to stake its large cash vaults towards the nascent market of smart, connected vehicles.
Tencent Holdings has come to popular attention for its widely popular instant-messaging app WeChat and the company now has inked a deal with Taiwan’s Hon Hai Precision Industry and Chinese premium auto dealer China Harmony Auto Holding to tap the market for smart electric vehicles. The alliance will use Tencent’s Internet prowess, Hon Hai’s production capacities and China Harmony Auto’s dealership network. They are also not the only Chinese company to research the emerging market for connected vehicles. So is Tencent’s close rival Alibaba Group Holding, with the e-commerce giant and state-controlled SAIC Motor Corp already announcing a $160 million investment in the segment, with their first product expecting to be launched in 2016.
Baidu Inc., which owns China’s biggest Internet search engine, is even bolder – with chief executive officer Robin Li commenting during China’s parliament events this month they might have their first autonomous vehicle up for sale before the year’s end.
The Tencent partners have also been hard at work preparing for the deal just announced. China Harmony Auto last year in December started purchase preparations to take over Green Field Motor from Xinnengyuan Automobile Holding. The automaker, an obscure Chinese manufacturer, had just unveiled in September its e-X5 model, an all-electric SUV priced below $10,000. Hon Hai also invested earlier HK $ 609 million in the auto dealer, taking over a 10.5 percent stake and becoming the company’s second largest shareholder.