Daimler, parent company of Mercedes-Benz and Smart, is reportedly considering starting a 50-50 joint-venture ride-hailing service with Chinese carmaker Geely.
Sources have told Bloomberg the ride-hailing system would be for the Chinese market.
Should the joint venture go ahead, the automakers face an uphill battle to gain significant market share from Didi Chuxing. Although dominant in China, the company is currently under regulatory pressure and is spending big to gain market share in other countries.
Li Shufu, founder and chairman of Geely, acquired a 9.69 per cent stake in Daimler in February this year, making him the largest single shareholder in the German automaker.
Daimler, like some other automakers, has already begun to diversify into mobility services, and currently operates the MyTaxi ride-hailing app, ViaVan ride-pooling service, and Car2Go short-term car hire platform.