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SoftBanks Vision Fund invests $1.5B in Chinese second-hand car startup Chehaoduo

SoftBanks Vision Fund is taking a bet on Chinas auto market after it agreed to pour $1.5 billion into online car trading group Chehaoduo, which literally means many cars in Chinese.
The Beijing-based company operates two main sites peer-to-peer online marketplace Guazi for used vehicles, and Maodou, which retails new sedans through direct sales and financial leasing. (These sub-brands are more subtly named, which translate to sunflower seeds and edamame, respectively.)
Chehaoduo said it will deploy the proceeds on technology investments as well as the development of new products and services. It also plans to ramp up its marketing efforts and continue to open brick-and-mortar stores, an omnichannel move it believes can enhance trust in consumers used to meeting dealers in person and differentiate it from peers with an exclusively online focus. Chehaoduo currently runs 600 offline stores nationwide supporting new and used car dealing along with after sales services.
The sizable funding round arrived at a time when Chinas softening economy is sapping consumer confidence, but the companys two-pronged strategy makes sure it covers a broad range of consumer demands. New passenger car sales in China the worlds largest auto market fell for the first time since the 1990s to 23.7 million units last year, according to a report by Chinas Association of Automobile Manufacturers, the countrys top auto association.

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