Alibaba sets up car division

Alibaba announced on Wednesday that it has set up a car business division to tap a wide range of auto-related businesses in the future.

Chinese e-commerce giant Alibaba Group's newly established car division will integrate its overall motor-related businesses and provide car owners with various online-to-offline (O2O) motor services, including new car and second-hand car transactions, localized services, and motor financing, a Sina news report said on Wednesday.

Wang Licheng, former leader of Alibaba's group-shopping platform Juhuasuan, will take charge of the new division, according to the report.

Over 50 mainstream car brands, including BMW, Jaguar Land Rover, Cadillac, Volkswagen, Buick, Chevrolet, and Toyota, have inked a contract with Alibaba's auto division. The group also announced that its O2O network covers over 10,000 authorized car dealerships and 20,000 car service outlets across the country.

The new move came after a clutch of Chinese technology giants, including Alibaba itself, made moves into the auto industry in the country months ago.

Last month, Chinese car manufacturer SAIC Motor Corp said it had teamed up with Alibaba to invest 1 billion yuan ($161 million) in a fund to develop internet-connected cars.

Apart from providing cloud computing support, Alibaba will also add digital entertainment, maps, and financial data to spur innovation with traditional car makers. The first connected car is expected to go on sale in 2016, according to the duo.

Other Chinese technology giants, including Tencent Holdings and Baidu Inc, have also expressed interest in car products. Tencent announced that it would explore a business model to make and sell smart electric cars, while Baidu said it will join with companies like Google to introduce an autonomous car within the year.

Data from the China Association of Automobile Manufacturers shows that a total of 23.49 million vehicles were sold in the country last year, up 6.9 percent from the previous year, making China the largest auto market in the world for six consecutive years.

Despite overall car sales growth slowing in 2014, compared with the 14 percent increase registered in 2013, car-related e-commerce boomed over the past years. On November 11, 2014 -- an online shopping bonanza also known as Singles Day in China -- Alibaba's business-to-consumer platform Tmall sold a total of 50,700 cars, according to the Sina report.