Second-hand car platform receives US$1.5 billion investment
Chehaoduo Group, the parent company for one of China's leading second-hand auto retail platform Guazi.com, said it received a US$1.5 billion investment from the SoftBank Vision Fund.
It aims to use the proceeds to beef up investments in technology in order to drive innovation in the sector, and develop new products and services across a wide range of customer needs.
It also seeks to expand its marketing capabilities and open offline stores to enhance new business activities.
China’s used car market is growing rapidly, but online penetration remains low and auto financing is not yet fully utilized compared to developed markets.
Chehaoduo, which started out as an online second-hand vehicle dealer, has been seeking ambitious offline expansion. It now operates more than 600 stores in the country and covers the sales of new and used cars, as well as maintenance services.
Online platforms are pushing forward efforts to link car buyers, sellers, dealers and service providers through online platforms, while other players like Uxin Group and Hong Kong-listed Yixin Group are also competing for market share.
The China Association of Automobile Manufacturers estimated that sales of new cars would remain flat this year as some of the demand would be replaced by the purchase of second-hand autos.
China Automobile Dealers Association said total sales of second-hand cars in 2018 was 13.82 million units, climbing 11.46 percent from a year ago. Sales value rose 6.3 percent to 860.4 billion yuan (US$128.6 billion).
Second-hand sports utility vehicles boosted the market growth, with annual sales volume growth of 30 percent.
“Chehaoduo Group is committed to promoting industrial improvement through technological reform and becoming the new engine to drive the future of automotive retail in China," commented Chehaoduo Group CEO Yang Haoyong.
"The support of the Software Vision Fund not only strengthens the Group’s capital base, but also has the potential to boost our big data and AI innovation capabilities, which can be applied to the whole automotive retail value chain," he said.
Its previous investors include Tencent, Sequoia Capital, Yunfeng Capital, ICBC International and IDG Capital.
"The company has a bold vision, with technology at its center, to underpin an industry network that will support transformative growth of the market," added Eric Chen, partner for SoftBank Investment Advisers, the investment advisory body of SoftBank Vision Fund.