ITOCHU Announces Entry into Next-Generation Mobility Business in China
Capital Contribution to Singulato, an EV Manufacturer, and DST, a Company Providing Rental and Maintenance Service for Commercial EVs
August 29, 2018
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced that it invested in the following companies in China, where the use of EVs (electric vehicles) has been rapidly increasing, aiming to strengthen and reform its existing businesses and fully launch its next-generation mobility business.
Capital contribution to Singulato Motors
ITOCHU has subscribed to the private placement of new shares of ZHICHEAUTO Technology (Shanghai) Co., Ltd. (headquartered in Shanghai, China; Shen Haiyin, CEO; hereinafter “Singulato”), an emerging EV manufacturer in China, and made a capital contribution. Dramatic changes are occurring in the business value chains of the auto industry due to the shift to EVs, which is expected to create new business opportunities. The Chinese EV market is the largest in the world thanks to the government’s support and is likely to continue its rapid growth.
Singulato is a promising company among the many emerging EV manufacturers in China. It is developing EVs in the SUV segment, which occupies the largest demand in China, and aims to enter the market at the end of 2018. Singulato is an EV startup established in 2014 by Shen Haiyin, who has extensive experience in founding IT ventures. It develops vehicles highly connected by AI and IoT technologies, which positions the cars as customer contact devices, aiming to create a business that will provide a variety of data application services by obtaining and analyzing user data from cars and delivering information to drivers, expanding beyond the business of selling EVs. ITOCHU will support Singulato through its expertise in the auto sale business developed over the years and utilize Singulato’s know-how on data application services and EV after-sale services to build a next-generation mobility business using the existing distributor and dealer business as a platform.
Overview of Singulato Motors
|Corporate Name||ZHICHEAUTO Technology (Shanghai) Co., Ltd.|
|Head Office||15F Edunbergh Bldg., 189 Hengxi Road, Minhang District, Shanghai|
|Capital Structure||Largest shareholder: Shen Haiyin 29.4%, others|
|Number of Employees||Approx. 670|
Capital contribution to DST, a commercial EV rental and maintenance service company
ITOCHU has subscribed to the private placement of new shares of Dishangtie Car Rental (Shenzhen) Co., Ltd. (headquartered in Shenzhen, China; Zhang Haiying,
CEO; hereinafter, “DST”), a company providing rental and maintenance service for commercial EVs in China, and made a capital contribution. The EV market for commercial vehicles is rapidly expanding in China and the shift of delivery vehicles to EVs in cities has been accelerated with efforts to reduce air pollution and the regional governments’ policies to promote EVs, particularly in urban areas.
DST currently operates 15,000 commercial EVs, one of the largest in the world, and it is a leader in the commercial EV rental industry in China. It plans to significantly increase the number of vehicles it operates. DST also engages in vehicle operation management and develops the EV charging infrastructure while accumulating experience in logistics operations that use commercial EVs.
Taking advantage of its expertise in the commercial vehicle business, synergy with its distribution business in China and networks with Japanese customers, ITOCHU will cooperate with DST to expand the commercial EV rental business, propose and provide customers with EV logistics-related solutions, such as the reduction of distribution cost and increase in management efficiency, and consider synergy with next-generation electric power value chains, such as the secondary use and recycling of EV batteries as well as the use of EVs in distributed energy.
In addition, ITOCHU will consider overseas expansion of the commercial EV rental and maintenance service in the future.
Overview of DST
|Corporate Name||Dishangtie Car Rental (Shenzhen) Co., Ltd.|
|Head Office||10F China Nuclear Bldg., 2002 Shennan Middle Road, Futian District, Shenzhen, Guangdong, China|
|Capital Structure||深圳市新创绿能投资有限公司 23%, others 77%|
|Number of Employees||Approx. 500|
There were approx. 29 million automobiles sold in China in 2017, the most in the world. Of this total, 770,000 were new energy vehicles*, which comprises approximately 40% of new energy vehicles in the world. The number of new energy vehicles sold is expected to dramatically increase thanks to the Chinese government’s promotion of their distribution.
- *General term for EVs, plug-in hybrid EVs (PHEVs) and fuel-cell vehicles (FCVs). Hybrid vehicles (HVs) are not included in the new energy vehicles in China.
ITOCHU announced its new Medium-Term Management Plan in May, which includes “reinvented business” as one of the basic policies and places “next-generation mobility” as a core area to improve. ITOCHU will make company-wide efforts to advance its business models and increase the value of its group value chains. In the new Medium-Term Management Plan, ITOCHU has established a next-generation venture investment program, which will support strategic and flexible investment in ventures that use technologies to create new business models, with an aim to promote the reinvention of the business models of the entire company. The company will actively work to develop next-generation businesses through the proposal of “major business model reform” by accelerating its entry into value chains created through the sophistication of existing businesses, technological innovation and changes in the external environment.