China’s iconic limousine brand Hongqi taps into ride-hailing sector

While giant Didi is still burning cash, new contenders are turning profitable.

Photo:Shutterstock.com

A new high-end ride-hailing app called Qimiao Chuxing backed by Chinese limousine manufacturer Hongqi is now operational in over 50 cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, the company announced on Tuesday via microblogging portal Weibo.

The new ride-hailing platform, also called iFlag Mobility, aims to lure mid and high-end users by offering rides on the company’s self-produced luxury car models such as the Hongqi H5, H7, and E-HS3. The platform also provides various customized services including car reservation, airport transfer, and car charter. In addition, users can also appoint selected drivers for their rides.

The move hints that Hongqi, which means “red flag” in Chinese, a company under China’s conglomerate FAW, is moving forward with the on-going mobility trend.

Hongqi is not the first traditional automaker which saddles up for the Chinese ride-hailing market, largely dominated by the Beijing-based Didi Chuxing. Other competitors include the earlier contender Shouqi Limousine & Chauffeur, the newly-launched platform T3, and taxi-hailing and carpooling service Dida.

Although Didi retains over 90% of the market share with more than 550 million users, it is still money-bleeding, with a staggering loss of USD 1.54 million in 2018, and has been suffering from regulatory hurdles and public backlashes after several safety incidents. Meanwhile, several firms managed to turn the ride-hailing business into profitability.

Shouqi, with more than 53 million registered users in over 70 domestic cities, announced that it expects to break even by the end of this year. Dida, which claims to have 130 million users nationwide, also said it has turned profitable earlier this month.

A major difference is that carmaker-owned challengers like Shouqi and Qimiao Chuxing deploy its own vehicles, which allow these companies to standardize their services more easily in term of car quality, safety, and support services. Didi requires its drivers to utilize their own cars to provide rides, and only last year, the company reportedly shelled out a total of USD 1.59 on driver subsidies.