Auto services platform announces new round of funding

Auto retail services platform Chehaoduo Group, which sprouted from China’s largest second hand vehicle retail platform Guazi, yesterday announced a new round of financing of US$162 million from Tiantu Capital, as well as existing investors such as DST, Nuoweiqi Venture Capital and CKE Capital. 

It has set up its headquarters for new car business ”Maodou” in Kunshan county of Jiangsu Province with 3 billion yuan (US$433.5 million) in financial support from the county government. 

Chehaoduo, which started out as an online second hand vehicle dealer, is also seeking ambitious offline expansion and aims to double the number of its physical stores to cover 300 outlets in 200 domestic cities under the Maodou brand. 

Guazi say their used car stores will also have presence in 100 offline outlets by the end of this year, adding that they have linked 300 million second hand vehicle owners and potential buyers and accumulated rich experience in evaluating car prices and consumer preferences, placing them well to further expand into the new car market.  

Well-funded Internet platforms are pushing forward efforts to link car buyers, sellers, dealers and service providers through online platforms, while other players like Uxin Group and Renrenche are also competing for market share.

China’s used vehicle sales are expected to reach 34 million units by 2022, according to a recent research report by Ken Research. 

“China’s online automobile service sector still has large growth potential and new market opportunities, and new consumer power is taking shape as buyers are more accustomed to turning to online platforms in search of products and services,” Yang Haoyong, CEO of Chehaoduo Group said.

He added that Maodou’s new car business is located in Kunshan because of its geographical advantages and rich talent pool. 

Yang added the company seeks to combine digital technologies and data analyzing powers to appeal to a younger generation of car buyers and to build up a new vehicle retail model that combines both online and offline scenarios.

Earlier this year it received US$818 million in funding from investors including Tencent, Sequoia Capital, Yunfeng Capital, ICBC International and IDG Capital. 

Maodou has already linked with dozens of leading manufacturers including Changan, SAIC Volkswagen Automotive, Infiniti and Chrysler, and yesterday also inked a new partnership with SAIC General Motors Corp to sell 20,000 vehicles directly to Maodou consumers.