Uber in deal with Chinese carmaker to battle rivals

Uber teams up with Chinese carmaker to fight rivals

Uber's China business has landed a strategic investment from a Chinese carmaker in a bid to bolster its battle against domestic taxi apps.

Guangzhou Automobile Group (GAC) has poured an undisclosed amount into Uber China that will include a partnership around auto sales, maintenances of cars, vehicle rental, insurance, marketing and new energy vehicles, such as electric cars.

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GAC sells different vehicles under three brands – Tumpchi, Gonow and Changfeng Motor. The company says it's on track to sell 2.4 million vehicles in 2015, according to a report in Chinese automotive news site Gasgoo.

But, more importantly for Uber, GAC is focusing heavily on green cars, saying that its alternative energy vehicle sales will hit 240,000 in 2020.

Clean vehicles are a big part of Uber's future. Earlier this year, it tested a fleet of electric cars in Chicago and is also working on developing driverless cars.

China has been a big focus for Uber this year. Uber raised $1.2 billion for its Chinese business from search giant Baidu in September. Chief executive Travis Kalanick also said that 30 percent of trips on Uber's app now take place in the world's second-largest economy.

The investment gives Uber another partner in China as it looks to battle the dominant player Didi Kuaidi, which was formed earlier this year when the top two ride-sharing services in the country merged.

Uber has so far struggled to shake the dominance of its rival in China. Didi Kuaidi is backed by a number of the country's biggest technology firms including Alibaba, Tencent and SoftBank and it has raised more than $4 billion. It also claims to complete more than 3 million rides per day versus Uber's 1 million in China.

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