Uber Technologies, the San Francisco-based ride sharing service provider, has decided to tap the financial business sector in China, where it has started inking a deal with a premium auto dealership to allow partners to buy vehicles at preferential rates.
The move is just part of a larger strategy that could help the rapid rising company better compete with Alibaba Group Holding and Tencent Holdings, Chinese firms that hold control over such partnership through other linked companies. China’s Yongda Automobiles Services Holding has offered to set aside massive amounts for discounts and smaller interest rates to be exclusively offered to Uber’s local partners, including car-rental companies, for when they acquire Audi and VW models from the dealer, according to a Uber statement. The duo could also expand their partnership towards further cooperation in car sales, rental and after-sales services.
The partnership is needed because Uber faces stiff competition on the Chinese market from local companies such as Didi Dache and Kuaidi Dache, two car-hailing applications supported separately by Tencent and Alibaba. Uber is refocusing on the high-end market segment after Didi and Kuaidi, which also have competing high-end limousine services such as Uber’s, announced last month they would merge – with Alibaba and Tencent each investing billions of yuan to help the apps achieve the highest rate of customers and drivers. Uber currently offers its services in nine Chinese cities – Beijing, Shanghai, Tianjin, Chongqing, Shenzhen, Guangzhou, Wuhan, Chengdu and Hangzhou – while both Didi Dache and Kuaidi Dache have operations in at least 300 Chinese cities.