The latest move by Chinese ride sharing platform Didi Chuxing indicates that the company has no plans of dumping its auto solutions segment ahead of its expected initial public offering (IPO) as rumored. On Monday, the company announced that it would pump in $1 billion into this unit, which is renamed Xiaoju Automobile Solutions Co, and that the unit will now have a more autonomous status with the appointment of its own top executive.
Kevin Chen, the General Manager of the auto solution platform, will now be the General Manager of the new entity and will report to Jean Liu, President of Didi Chuxing. The unit — which includes auto leasing, car maintenance and gas station services — was developed in 2015 and was put to into operations in April 2018.
Cheng Wei, CEO of Didi Chuxing, said, “The creation of Xiaoju Automobile Solutions is not only a key step towards achieving Didi’s automobile alliance strategy but also a milestone in organizational innovation as we continue to expand our business horizon.”
On Monday, the company announced that it would pump in $1 billion into this unit, which is renamed Xiaoju Automobile Solutions Co.
Though Didi never confirmed its plans for an IPO, rumors claimed that the company will go public in 2019. The IPO, if it happens, will be huge, as the company was valued at $56 billion during its round of financing in 2017.
RELATED: Booking Holdings invests $500 million in Didi Chuxing
Last month, Reuters had reported that Didi was planning to unload its auto leasing unit in a deal valued at $1.5 billion before its IPO. Xiaoju Automobile Solutions has an annualized gross merchandise value of 60 billion yuan ( approx $8.79 billion)
RELATED: Didi Chuxing plans for an IPO
Didi, which has expanded into a number of markets worldwide, aims to branch out into the other segments in the transportation industry including bike-sharing and food delivery.